Material tax law governs rules on how tax is to be calculated. Formal tax law determines how tax assessments should be imposed and levied and what rights and obligations the taxpayer has. Formal tax law also provides rules for imposing fines or even imprisonment
Our expert formal tax services cover several formal tax topics. Topics for which you may use a tax lawyer (in Dutch “fiscaal jurist”) and in certain cases even a tax attorney (in Dutch “fiscaal advocaat”). Baker Tilly Dutch Caribbean has both disciplines and extensive experience in formal tax matters and proceedings. We greatly value our clients’ public integrity and ethics in their tax environment but when the Tax Authorities cross a legal border, our tax lawyer or tax attorney will come into action.
Sometimes a taxpayer has certain non-declared income or assets, such as revenue from an enterprise or a foreign bank account. Over time a taxpayer often wants to come clean and eventually report the concealed income or assets. A taxpayer might accept a public function or perhaps he simply does not want to burden his children with the inheritance of ‘black money’.
A taxpayer may want to discuss the conditions of a voluntary disclosure freely with a professional advisor. Ideally he should do this with a tax attorney, rather than a regular tax consultant. Besides knowing all the formal aspects of voluntary disclosure, a tax attorney takes into account all criminal aspects involved. A voluntary disclosure can avoid paying tax penalties or fines, but it doesn’t automatically protect you from criminal prosecution! This is an area of the law that most tax consultants are unable to advise you about, whereas Baker Tilly Dutch Caribbean is an expert in this field.
International Information Exchange
Aruba, Curacao and St. Maarten enter into a growing number of tax information exchange agreements and treaties for the avoidance of double taxation. The latter avoids paying taxes on the same income or capital in two jurisdictions, but they also contain provisions for solicited and unsolicited exchange of information between countries. The exchange of information is subject to rules. A country is not allowed to retrieve data from another country without a justified motive. There should be a material tax interest or a pending levy or outstanding tax collection and the requested data must be unavailable to the soliciting country through its usual sources.
Prior to the exchange of information, the taxpayer should be informed. The taxpayer may appeal against the information exchange, however the Tax Authority may still provide the information to the other country. If this is undesirable, the taxpayer should object to the exchange through legal proceedings.
If your administration is being requested for an exchange of information, you may need the assistance of a tax lawyer. In an exchange procedure, a taxpayer can have several positions; there are cases in which you are the subject of the investigation yourself, but the authorities may also ask you to cooperate with an investigation regarding someone else. Baker Tilly Dutch Caribbean can advise and represent you in both situations.
A TIO or FIOD Investigation
The TIO (Team of Information and Investigation) or FIOD (Fiscal Information and Investigation Service) can appear at your doorstep unannounced, demanding to see your books and computers or seize the administration. When they enter, are you properly prepared? Do you know what to say, what to ask and what to avoid saying or doing? Contrary to an audit by the Tax Authority, these formal tax investigators do not always make an appointment and a visit from them usually means that there are criminal aspects involved.
Partner and tax attorney Arthur van Aalst is specialized in your rights and obligations and has extensive knowledge and experience in the field of formal tax legislation, the criminal justice system and its provisions. Moreover, he is legally authorized to represent taxpayers in criminal courts and has certain statutory rights and a formal client-attorney privilege that a regular tax consultant doesn’t have. We have created several scenarios for dealing with an unannounced investigation by the TIO or FIOD, which are readily available to you if and when this situation should occur.
Criminal Tax Proceedings
Criminal tax proceedings generally take place in situations whereby a serious violation of tax legislation is involved. Violations include a series of tardy tax returns, inaccurate or incomplete provision of information, failing to keep accurate records or failing to properly file data carriers. The penalties in case of willful committing criminal offences can be severe. To avoid prosecution, your trusted tax attorney can enter into a transaction agreement with the public prosecutor.
Court of Appeal for Tax Matters
If you disagree with a decision of the Tax Inspector regarding an objection you filed, or if the Inspector does not decide within the legal term of nine months, you may file an appeal with the Court of Appeal for Tax Matters (Raad voor Beroep voor Belastingzaken).
The proceedings in front of the Court are often your last resort to defend your case. Therefore, the proceedings must be conducted with the utmost precision and care, and counsel from a professional tax lawyer or tax attorney is imperative.
Tax Collection Proceedings
If a taxpayer does not pay a tax assessment within the allowed timeframe, the Tax Collector can start formal proceedings to collect the amount owed. For this, the Collector has ample authority and plenty of means at his disposal.
The Collector generally starts with sending a payment reminder. If the owed taxes remain unpaid, the Collector will summon a tax bailiff to serve an injunction. Should you still fail to make payment, the Collector may seize your possessions, real estate or wages. It is possible to object to an injunction, by means of a notice of opposition to the Collector. At the same time, a case against the Collector needs to be filed with the Court of First Instance. You must do this within one month of the date of the injunction. As this is a civil court proceeding, you are legally required to be represented by an attorney.