16 December 2022

Tax authorities must at all times respect the lawyer’s professional confidentiality

In a case that was recently settled by the Antwerp Court of Appeal, was ruled that the tax authorities may not use confidential correspondence between the taxpayer and its lawyer, which is obtained as a result of tax visitation, in proceedings against the taxpayer.

The facts

A married couple were jointly directors of 3 companies, for which the tax authorities proceeded to a tax visitation. This visitation resulted in extensive corporate income tax assessments, forcing the companies to file for bankruptcy. After a while, the couple received successive requests for information regarding tax returns of their personal income tax. By inspecting their administrative file, the couple noticed that, at the time and in their absence, a second tax visit had taken place at the companies. The tax authorities had copied all data on the computers, including the mailboxes containing the e-mail traffic between the couple and their lawyer. The tax authorities subsequently attempted to use the e-mail traffic in proceedings against the taxpayer.

The jurisprudence whistles back the tax authorities

The Antwerp Court of First Instance reprimanded the tax authorities for this approach. The court ruled that there was an infringement of the right to respect the confidentiality of the correspondence, and possibly also an infringement of the right of defence by means of copying. Therefore, a sequester was appointed for all files that the tax authorities had copied during the visitation. These files then had to be examined by the Chairman of the Bar Association of Antwerp for their confidential nature, whereafter the Chairman could guarantee compliance and enforcement of professional secrecy between the taxpayers and the lawyer by filtering the confidential information from the file.

After the judgement of the Court of First Instance, the case was brought before the Antwerp Court of Appeal. The Court confirms the decision of the Court of First Instance, but does not go as far in its reasoning as it does not rule on possible violations of various fundamental rights. The Court merely states that the claim aims to take the confidential correspondence between the taxpayer and his lawyer out of the hands of the tax authorities so that it cannot be used in further proceedings. This could, after all, cause serious damage to taxpayers, consequently the appointment of a sequester was justified and the Chairman of the Bar Council was the “chosen person” for purging the confidential data.

In addition, the Court ruled that it is irrelevant whether all correspondence between the lawyer and the taxpayer is confidential, but that it is sufficient that it may be confidential as a result of which there may be a violation of professional secrecy and the right to respect for privacy. Whether these fundamental rights have actually been infringed must, however, be assessed on the merits by the court.

Ground-breaking judgement for the future

The Flemish Bar Association has already pointed out in the past, after several requests from various lawyers, the importance of purging the file from possible confidential documents obtained during a tax visitation by the tax authorities.

The previous rulings of the Courts of Appeal, up to the recent verdict and judgment, repeatedly stated that the taxpayer should invoke the protection of professional secrecy at the start of the tax visitation. If not, the potentially confidential information that the tax authorities could obtain as a result of the tax visitation, could no longer be purged from the file. The aforementioned judgement not only makes it possible to invoke a possible violation of professional secrecy a priori, but also to assess a violation a posteriori, so that confidential information can still be excluded from the file afterwards, after the visitation. This statement therefore brings an important nuance to this problem.

Eline Depaepe and Evert Moonen
De Langhe Attorneys

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