Limitation of Administrative Tax Penalties by the European Convention of Human Rights and the eu Charter of Fundamental Rights

Abstract

This article provides a comprehensive overview of the tax issues related to administrative and criminal penalties, particularly focusing on the need of finding a fair balance with taxpayers’ rights. This theme, which was the subject of the annual conference of the European Association of Tax Law Professors (EATLP) held in Milan on 28-30 May 2015, has recently become a pan-European issue, due to the ground-breaking role played by the legal principles enshrined both in the European Convention of Human Rights and the Charter of Fundamental Rights of the European Union. Despite considering human rights’ principles to be completely at odds with taxation, the recent achievements resulting from the case-law of the European Courts show instead a movement demanding a more effective protection of taxpayers’ guarantees and safeguards against administrative and criminal sanctions imposed by national legislations. The paper analyzes two major subject areas where the intervention of the European Courts has been more incisive: (I) the autonomous classification of administrative and criminal penalties made by the EU Courts, which completely disregards how the penalty is considered under domestic tax laws; (II) the extension of the prohibition of double jeopardy, that is the right not be tried or punished twice, as to impede the simultaneous imposition of both administrative and criminal penalties on the same taxpayer for the same conduct. In the final section, the article also discusses possible solutions which should be implemented by domestic tax systems to be in compliance with the recent developments at EU level.