THE BOTTOM LINE
- No Free Pass on Procedure: Tax authorities are not required to issue a formal information order (informatiebeschikking) before launching a criminal investigation into faulty bookkeeping, especially after prolonged communication with the company.
- Informal Deals Are Risky: Relying on alleged informal agreements with authorities to avoid prosecution is a high-risk defense. Courts will demand clear proof of any such commitment, which was found lacking in this case.
- Facts Still Matter: While its procedural arguments failed, the company did successfully challenge its conviction for two specific years. It proved the returns were filed before a final, agreed-upon deadline, leading the Advocate General to recommend a partial acquittal.
THE DETAILS
This case involved a company convicted for intentionally failing to file corporate tax returns for multiple years and for failing to maintain proper administration as required by Dutch tax law (Article 69, AWR). The company appealed to the Supreme Court, presenting several procedural defenses. It argued that the prosecution was invalid because the tax inspector had not first issued a formal information order—a legal notice compelling the company to provide information or rectify its administration. The company also claimed it had an agreement with prosecutors that if it filed the overdue returns by a specific date, the case would be dropped.
The Advocate General (AG), in a legal opinion advising the Supreme Court, rejected most of these arguments. On the issue of the missing information order, the AG clarified that while this is a tool available to tax inspectors, it is not a mandatory prerequisite for criminal prosecution. The law states an inspector can issue such an order, not that they must. Given the extensive history of communication, reminders, and warnings between the tax authorities and the company, the AG found it was reasonable for the inspector to proceed directly to prosecution without this formal step. The defense based on an alleged promise of non-prosecution also failed due to a lack of evidence.
However, the company’s appeal was not entirely unsuccessful. The Advocate General’s opinion highlights that the factual basis for each charge remains critical. The court of appeal had established that the company did, in fact, file its tax returns for the years 2015 and 2016 before a final deadline of December 7, 2018. Consequently, the Advocate General advised the Supreme Court to quash the conviction specifically for failing to file in those two years. The convictions for other years and for failing to keep proper records were deemed valid. This opinion underscores a key principle for business leaders: while Dutch authorities have significant discretion in enforcement, a criminal conviction must still be supported by the specific facts of the alleged offense.
SOURCE
Parket bij de Hoge Raad (Advocate General at the Supreme Court of the Netherlands)
