Tax Confidentiality: A Legislative Proposal at National Level
- A-M. Hambre
- World Tax Journal, 2017 (Volume 9), No 2
- 7 February 2017
This article deals with national legislation concerning tax confidentiality in terms of public access to information on individual taxpayers held by national tax authorities. It ends in a proposal for legislation – a requirement of damage, which is to be applied when individuals request tax information about other taxpayers held by the tax administration. In short, the requirement of damage is constructed so that, for confidentiality to apply, there must in the particular case be a likelihood of damage occurring upon disclosure. A tax confidentiality rule holding a requirement of damage thus provides neither total confidentiality nor full transparency. Instead, it provides a case-by-case balancing of interests – a damage assessment – to determine whether the requested information should be confidential or could be disclosed. This means that all of the requested information may be subject to possible disclosure, limiting the information decided beforehand to be confidential, thus widening the scope of transparency and the right to information. Tax confidentiality – or tax transparency – and the proposed requirement of damage are considered from different viewpoints, such as the principle of maximum disclosure, the scope of accessibility and the scope of accessible information. Furthermore, the article evaluates the proposal with the use of a theoretical framework holding three different benchmarks: tax compliance, administrative costs for the tax administration and taxpayer privacy. It is argued that a requirement of damage facilitates public access to information and thus should provide benefits in terms of the level of taxpayer compliance, but at the same time recognizes that full disclosure in every situation may not be appropriate due to, for instance, the interest of protecting taxpayer privacy.