Harsher tariff owing to subsequent legislative amendment deemed unlawful

Any tax payer who belatedly filed a correct and complete return before he became aware, or should have got an inkling, that the Inspector of Taxes had caught on to the fact that his previously filed return had been incorrect or incomplete would have dodged the negligence penalty bullet thanks to the old voluntary disclosure scheme. A revised scheme came into effect on the second of July 2009 involving a limitation of the period for voluntary disclosure without incurring a negligence penalty to a maximum of two years of the date of the earlier incorrect or incomplete tax return or of the tax return having had to be filed. In the event of a tax payer proceeding with voluntary disclosure after the two-year term has expired, this may inspire the Inspector of Taxes to mitigate the negligence penalty. The voluntary disclosure scheme has been abolished as part of the 2018 Tax Plan.

Both ECHR, the European Convention on Human Rights, and ICCPR, the International Covenant on Civil and Political Rights, stipulate that no-one may be found guilty of an act or action which at the time it was committed or omitted did not qualify as an offence, nor may a harsher tariff be imposed than that which applied at the time the offence was committed. Arguing that the voluntary disclosure scheme as a generic ground for immunity from prosecution belonged to the realm of substantive penalty law, the Court stated that the scheme had to be regarded as a penal provision rather than as a provision pertaining to the implementation or enforcement of the penalty. Where the amended legislation had introduced harsher tariffs, the Court ruled that the amendments in question were incompatible with ECHR as well as ICCPR, and duly quashed all negligence penalties having been imposed during the period from 2004 to year-end 2007.

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Dutch version: Strafverzwaring door latere wetswijziging niet toegestaan