Illegally obtained evidence in tax cases: European court contradicts Belgian Court of Cassation

Spotlight
15 March 2016

In a recent judgment, the Court of Justice had to decide whether illegally obtained evidence should be excluded from the file in tax matters.

In mid-2015, the Court of Cassation ruled that tax courts did not automatically need to remove illegally obtained evidence, but had to conduct a balancing of interests. According to the Court, the use by the tax authorities of illegally obtained evidence should be assessed according to the principles of good administration and the right to a fair trial. Unless the law provides for a special sanction, illegally obtained evidence in tax cases is only required to be excluded if:

  • the evidence was obtained in a manner so contrary to what may be expected from a decently acting authority that it must be considered unacceptable under any circumstances; or
  • the use of the illegally obtained evidence violates the right to a fair trial. 

Previously the Court of Cassation had already adopted this position in relation to criminal matters (known as the "Antigoon doctrine").

The underlying rationale is that the public interest (the levying of taxes, albeit based on unlawfully obtained evidence) must prevail in certain circumstances over the individual interest (the fundamental rights of the individual).

However, in a recent high-profile judgment, the European Court of Justice adopted another position (the WebMindLicences case of 17 December 2015). The case concerns a VAT dispute between a Hungarian company and the tax administration. The European Court had to rule inter alia on whether the evidence obtained by the tax authorities in breach of a fundamental right (in this case the right to privacy) could be used by the authorities. Without conducting a balancing of interests, the Court ruled that such illegally obtained evidence should be disregarded.

The European Court therefore seems to have overruled the Court of Cassation with respect to VAT cases, at least when the irregularity concerns a violation of a fundamental right guaranteed by the Union. In direct tax matters, this judgment substantially has moral authority, but it is clear that the Antigoon issue is still not entirely settled.