Can the tax authorities sanction the same offenses twice?

Violations can be punished with administrative or criminal sanctions, and sometimes even both at the same time. But punishing the same tax violation twice, that's not allowed... Or is it?

Non bis in idem

No one can be punished twice for the same offence. This is a general principle of law, which is not only contained in our Belgian national legislation, but also, for example, in the European Convention on Human Rights (ECHR).

The term 'punishment' has in fact been given a broad interpretation there: the seriousness of the sanction is considered, not who imposes the sanction. In principle, the tax authorities impose administrative sanctions. Only a criminal court can impose criminal sanctions. But that distinction disappears before the ECHR. If the penalty is severe enough, it is criminal. Even if it is imposed by a tax administration.

You could therefore conclude that if a taxpayer is fined by the tax authorities for fraud, a criminal court can actually no longer impose a criminal sanction.

Criminal after tax

But in 2016, the European Court of Human Rights (ECHR) nuanced that principle in tax cases. According to the Court, an administrative sanction (with a criminal nature) and a punishment (pronounced by the criminal court) can indeed be applied together if the two together form a coherent whole of punishment.

To this end, the two sanction systems must be 'substantially' and 'temporally' closely linked, and they must 'pursue complementary goals'.

In Belgium, these principles were incorporated into our legislation in 2019: the Belgian criminal court may therefore still impose penalties, even if the tax authorities have already imposed sanctions, but when determining the penalty, the court must take into account previously imposed fines and tax increases.

Tax after tax

The Belgian tax authorities have an extensive arsenal of administrative sanctions that they can use to punish violations. In addition to fines, tax increases are also possible. Often both are combined. However, as mentioned above, the distinction between an administrative sanction and a criminal sanction is not relevant for the ECHR. Only the seriousness of the sanction should be considered. Based on that principle, the Court of Cassation recently concluded that two administrative sanctions can also fall under the non bis in idem principle.

In the case at hand, a tax return was filed late. Late returns are sanctioned with an administrative fine. But since 2017, taxpayers can also receive a tax increase on top of the fine for a late return. In its judgment, the Court of Cassation simply follows the ECHR rules: this concerns two sanctions for the same offence. This is only possible if the two sanctions are closely linked and they pursue a complementary goal. According to the Court of Cassation, this was not the case, as a result of which one of the two sanctions was incorrectly applied.

What now?

In this case, it was reasonably clear that there was no complementarity, but that two sanctions were simply applied for one and the same offence, namely late filing of the tax return. If the tax authorities want to apply a standard fine and a tax increase at the same time, it will therefore have to demonstrate that the fine and the tax increase pursue different goals.

However, the judgment of the Court of Cassation does not have a larger scope than that. It is therefore not the case that violations of tax legislation can now by definition only be sanctioned with either a fine or a tax increase.
But it is a warning to the tax authorities that fines and tax increases that are applied together should not lead to disproportionate sanctions.