Supreme Administrative Court to rule on fiscal confidentiality
The HFHR applied to the Minister of Finance for the disclosure of the document entitled “Responsibilities of Tax Audit Offices for 2013”. According to media reports, the document was to introduce the “minimum threshold of effectiveness” of tax audits, set at the level of 71 per cent. This figure stands for the percentage of audits which are expected to detect irregularities. Both the Minister and, subsequently, a Provincial Administrative Court, denied access to the document. The HFHR filed a cassation complaint in the dispute.
In its complaint to the SAC, the Foundation alleges a violation of the right to public information. The Provincial Administrative Court classified the document as containing public information but said that its disclosure would disrupt operations of tax audit bodies.
Moreover, the PAC assumed that in law there were two types of tax information covered by the fiscal confidentiality privilege. According to the ruling, the privilege extends to all information collected and processed in the course of tax audits. In other words, the protection should be awarded to all information at the disposal of a tax audit body, no matter by whom and in what circumstances it has been developed.
“In the opinion of the HFHR such a definition is too broad and violates the constitutionally guaranteed right of access to public information”, says Adam Ploszka, coordinator of the “Human Rights and Taxes” Law Clinic. “In interpreting the concept of tax confidentiality, tax authorities should apply the Code of Tax Procedure, article 293, which stipulates that the confidentiality obligation pertains only to such information which may constitute the personal data of taxpayers enabling their identification by unauthorised persons”, adds Mr Ploszka.
Robert Kransodębski, a lawyer of Weil, Gotshal & Manges working with the HFHR on a pro-bono basis, commented on the ruling: “A practical consequence of the court’s acknowledgement of the dual approach to laws which define the tax confidentiality principle and govern the application of this principle by tax and audit bodies is the latter’s exclusion from the system of civic oversight. In the Foundation’s opinion, the creation of “enclaves” regulated by sets of special legal rules which results in the very broad construction of the areas removed from the category of publicly available information, is undesirable and may not be accepted.”