Decision not to pursue criminal prosecution may result in presumption of innocence | Deloitte


Decision not to pursue criminal prosecution may result in presumption of innocence

If an interested party can provide reasonable arguments for a sufficiently strong link between tax proceedings and criminal proceedings, a presumption of innocence may also extend to those tax proceedings.

14 June 2017

Dutch version

Presumption of innocence

Article 6 of the European Convention on Human Rights (ECHR) states that anyone who is being prosecuted (whether under criminal law or otherwise) will be presumed innocent until proved guilty according to law. The Supreme Court gave an interesting judgment recently, showing that this “presumption of innocence” may also affect proceedings in which the key issue regards the amount of tax due.

Decision not to pursue criminal prosecution

An entrepreneur carried on a floor laying business in an industrial building he rented. The police raided the building in April 2010 and discovered a cannabis farm on the top floor. Because the public prosecutor dismissed the case, however, the entrepreneur was not prosecuted. Although no proceedings were instituted as regards the confiscation of illegally obtained benefits either, the Tax Administration was informed about the findings of the police investigation. On the back of this, the inspector imposed an additional tax assessment and a negligence penalty for the year 2010.

The Court of Appeal of The Hague ruled that the inspector had provided reasonable arguments for the entrepreneur to have earned considerable income from growing cannabis in 2010, which he had failed to report in his tax return. Because the tax court will need to form an independent opinion on the facts and circumstances relevant to the taxation, according to the Court the decision not to pursue criminal prosecution does not affect this conclusion.

Consequences for tax proceedings?

On appeal, the entrepreneur states that the entire process is contrary to the presumption of innocence as laid down in art. 6 ECHR. As a result, the Supreme Court considers that it follows from ECHR case law that the “presumption of innocence” may extend to how the Tax Administration treats taxpayers and to legal proceedings regarding the amount of a tax liability. Still, this is solely the case if an interested party can provide reasonable arguments for a sufficiently strong link between the criminal proceedings and the subsequent treatment by the administrative authorities, or the subsequent legal proceedings.

One of the situations in which this may occur is if those subsequent proceedings force the Court to examine a criminal judgment; to reconsider or assess the evidence in the criminal file; to form an opinion on the interested party’s involvement in the events that had led to the earlier “criminal charge”; or to form an opinion on the existing indications of possible guilt of the interested party. The connection with article 6 ECHR as referred to above is not limited to situations in which criminal proceedings have resulted in an acquittal. It may, for example, also arise if a case is not prosecuted due to lack of evidence (dismissal by reason of unlikelihood of conviction).

It should be noted that an acquittal does not prevent facts from being proven in later tax proceedings for which the party involved has been acquitted by the criminal court. This is because tax law sets less stringent requirements for the evidence to be provided. Additional evidence becoming available at a later stage is also a distinct possibility.

Nevertheless, the tax court’s actions and the substantiation of its judgment, should avoid any doubt whatsoever about the correctness of the judgment in the criminal proceedings or the correctness of the grounds for the decision not to prosecute.


The above considerations ultimately failed to benefit the entrepreneur in this case. The Supreme Court has determined that the entrepreneur failed to provide facts and circumstances that would justify the conclusion that the treatment by the inspector and the judgment of the Court of Appeal raise doubts about the correctness of the grounds based on which the public prosecutor had decided to dismiss the case. Hence, it is unlikely that this involves actions contrary to the presumption of innocence under art. 6 ECHR. The appeal to the Supreme Court is dismissed.

Source: HR June 2, 2017, 15/05179, ECLI:NL:HR:2017:958

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