Introducing the principle of « una via » when taking on tax fraude cases: the choice for "only one way" ... but is it the correct path to go down ?

On 1 November 2012 the law introducing the « una via » principle in the prosecution of the violation of tax rules and the increase of criminal tax fines entered into force (Law of 20 September 2012, Belgian Official Gazette of 22 October 2012).

1. A solid choice made by this law.

The legislator chose  for the « una via » principle or for just one way proceedings: a case of tax fraud will be handled either as an  administrative case or as a criminal case.

At the same time, this law also significantly increased the amount of the already existing criminal tax fines.

2. The reason why this law was introduced.

Criminal law is much faster involved when a tax rule has been violated as might appear at first sight.

All violations of tax rules, when they are committed deliberately or with the purpose to damage, can be considered as a criminal violation. Tracing and prosecuting of these violations remains the competence of the police and the Public Prosecutor.

However, also tracing, including laying down tax fraud and tax debt, and the recovery is a task of tax administration.

This basically signifies that two institutions are able to treat the same file regarding tax fraud.

Therefore a violation of a tax rule could, until recently, lead to both a criminal sanction (for example a prison sentence or a fine) as well as to an administrative sanction (for example a tax raise). A double punishment in tax fraud cases therefore was possible.

This however conflicts, according to the legislator, with the « non bis in idem » principle, which is embedded in the European Convention on Human Rights (the so-called « ECHR »). According to that principle, a person may not be prosecuted and penalized twice for the same offence.

This law wants to end double punishment in tax cases. This law, which fits within the framework of the fight against tax fraud, aims to organize this fight in an efficient way and to avoid double use of government resources.

3. The achievement aimed by this law.

From now on a tax fraud file will either lead to an administrative procedure either a criminal procedure.

In practice, in a tax fraud case  a consultation on the approach of this specific file will take place between the tax administration and the Public Prosecutor' s office. Afterwards and in line with the « una via » principle, an administrative procedure or a criminal procedure will be initiated. Rather simple tax fraud files will be taken on by the tax administration and larger tax fraud files, wherefore an appeal to the large judicial resources is necessary, will be left to the Public prosecutor.

Besides introducing the « una via » principle, this law also significantly increases the amount of the already existing criminal tax fines. The amount of the current criminal tax fines has, according to the legislator, been missing out as to her discouraging effect. The legislator therefore didn't hold back to significantly increase the amount of the criminal tax fines.  Where formerly the maximum fine amounts EUR 125.000, we can now count on a maximum fine of EUR 500.000. Furthermore, this law also introduces the system of adjustment of the fines to the depreciation of the currency, the so-called "additional opdecimes" on all criminal penalties. The amount of all criminal penalties therefore needs to be multiplied by six. In practice, this means that the maximum fine can now run up to 3 million euro.

4. Is the « una via » principle the correct path to go down?

However, the question that is at stake is whether the choice for one way, as is foreseen under this new law, is the correct path to go down?

On one hand the fact that consultation takes place between the tax administration and the Public Prosecutor can only be encouraged. The general thought behind this law, which is to organize the fight against tax fraud in a more efficient way and to use government resources also in a more efficient way is a good starting point. Also the fact that the amount of the already existing criminal tax fines has been significantly increased, will not stand in the way of the effect that was aimed upon by that increase.

On the other hand, one must take note of the fact that the « una via » principle was not consistently applied throughout. The choice between the administrative proceedings  or the criminal proceedings applies only to tax violations that can be punished in a administrative way and in a criminal way. A cumulation of tax administrative sanctions is still possible. The « non bis in idem » principle is not being maintained as a double punishment is not excluded.

Furthermore the question at stake is if there is not an illegal violation of the separation of powers, now that, taken into consideration the consultation, the executive  and the judiciary are stepping into each other' s field.

Hence, a new law that is not going to be spared from any criticism...

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