Is the current approach to tax fraud in the Netherlands legally tenable?

Claire Hofman, Assistant Professor at Erasmus School of Law, recently defended her PhD dissertation entitled: ‘The System Of Sanctioning Tax Fraud: an investigation into the foreseeability and mutual coordination of sanctioning options’. In her dissertation, Hofman discusses to what extent the Dutch sanctioning system for tax fraud is legally tenable.

Legal uncertainty and transgressive behaviour

The current system of sanctioning tax fraud is dual: a fraud can be fined by the tax authorities or punished criminally by the criminal court. A dual system involves a moment of choice: at a specific moment, the authorities must choose whether the fraud will be dealt with under administrative law or criminal law. Hofman discusses whether this choice is now foreseeable. She also questioned whether this system prevents double prosecution for the same offence. As the ne bis in idem-principle prohibits double prosecution of the same offence.

The research arose from Hofman's curiosity about the origins of the current system of sanctioning tax fraud and the desire to be able to indicate the relationship between recent developments in the judiciary and society and the current system. One can think themes such as the hardening of the view on tax fraud.

Substantiation in triptych

Hofman's research is structured in a triptych, in line with the themes: the dual system, tax fraud, and fiscal sanction options.

Firstly, Hofman examined to what extent a taxpayer can foresee the legal consequences in the dual tax system in the event that he is found guilty of tax fraud. Secondly, the meaning of the concept of tax fraud is discussed. Which behaviour leads to the application of which tax offence and is that evident in advance? For example, can specific non-standard behaviour also lead to applying multiple offences, and what are the consequences? Thirdly, the nature of the various tax sanctioning options and the extent to which they are attuned to each other were examined.

A new tax sanctioning system

Based on the previous questions and answers, Hofman has attempted to design a new tax sanctioning system that, compared to the old system, can better guarantee the prevention of double punishment and that provides a clear choice for the authorities with regard to the approach.

Assistant professor
More information

The dissertation: 'The system of sanctioning tax fraud: an investigation into the foreseeability and coordination of sanctioning options' will also appear as a commercial edition in the Fiscal Monographs series. In addition, Hofman was a guest of Jort Kelder on Radio 1 on 2 October 2021 to discuss her thesis further. Listen to the Radio 1 fragment here (in Dutch).

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