Source: Curia
On 24 October 2019, the European Court of Justice gave its judgment in cases C‑469/18 and C‑470/18 (Belgische Staat). Both cases deal with similar questions, and therefore these cases were joined. The question is if the tax authorities can use evidence in a VAT case, if this evidence is obtained without legal approval.
Decision
The requests for a preliminary ruling made by the Hof van Cassatie (Court of Cassation, Belgium) by decisions of 28 June 2018 are inadmissible.
Unofficial translation
Facts (simplified):
IN and JM are managing directors of companies that trade and distribute computers and computer components. A criminal investigation was started against these companies following a complaint from the Belgian tax authorities, which had started an investigation into VAT carousel fraud.
In the context of the criminal investigation, a rogatory commission was carried out in Luxembourg. During that hearing, the director of a Luxembourg bank, when questioned by a Luxembourg investigating magistrate, handed over banking documents relating to the applicants.
However, these documents were transferred without the court’s request for approval.
The Belgian tax authorities used these documents to impose tax assessments on the applicants.
The applicants claimed that the banking documents had been obtained unlawfully and therefore could not be the basis for a tax decision.
The Belgian Court of Cassation has asked the Court for a preliminary ruling on the following question:
“Article 47 of [the Charter] must be interpreted as precluding, in [VAT matters], the use of evidence obtained by disregarding the right to respect for private life as guaranteed by Article 7 of the Charter, or whether it leaves room for a national regulation whereby the judge must decide whether such evidence can be used as the basis for a VAT levy, a consideration as [described in the reasons for the request for a preliminary ruling] must be made? ”
Considerations:
As the referring court points out, the situation at issue in the main proceedings, which concerns a change in tax returns on the income of natural persons, does not fall within the scope of EU law.
In the present case, the Court may not determine if the national legislation or case-law applicable to the use of evidence which, according to the referring court, is obtained unlawfully.
Judgment:
The ECJ rules as follows:
Since EU law does not contain rules on the method of proof in the field of VAT and it is for the Member States to lay down such rules, while respecting both the principle of the effectiveness of Union law and the rights guaranteed by that law, it appears to it is difficult in this area for national law to refer to provisions of EU law.
In any event, it is not apparent from the order for reference that Belgian law refers to such a reference.
In the light of the foregoing, the present requests for a preliminary ruling must be declared inadmissible.
Source: Curia
