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The FIOD contacts you and demands digital and/or written data. In this blog Debbie Liem highlights an important point of attention.
Demand or Order
In some situations, you may be verbally required to provide data. You might also receive a written demand or a written order. The term "demand" will be used throughout this text.
Cooperation
If the FIOD wishes to interrogate you, there is the option not to cooperate. However, the situation is different if the FIOD demands data. You are obliged to comply. However, you can take the following into account: do not provide more information than is demanded.
Assessing the demand
To avoid providing too much information, it is crucial to determine exactly what the FIOD is demanding. This assessment may seem simple, but in practice, it can be complicated. This can be illustrated by the following example in which information is demanded under Article 126nd of the Dutch Code of Criminal Procedure (“Wetboek van Strafvordering”).
Article 126nd
The FIOD demands all available information from Adviser A regarding the X-group under Article 126nd of the “Wetboek van Strafvordering”). Mr. Y holds all shares in the X-group and the Z-group. Both the X-group and the Z-group are clients of Adviser A. The email correspondence between Adviser A and Mr. Y generally concerns both the X-group and the Z-group. Some emails contain attachments related to both the X-group and the Z-group.
Breach of Confidentiality
Providing too much information carries a risk. If Adviser A, in the mentioned example, were to provide the attachments related to the Z-group, this information would be provided voluntarily or without obligation. The Z-group might consider that the (contractually agreed) confidentiality has been breached. If the adviser is an accountant or affiliated with a professional association as a tax adviser, there are also disciplinary risks to consider. Therefore, it is important to carefully assess the demand.
Broadly defined demand
For the FIOD, it is often difficult to determine what information is desired because there is no clear insight into the available data at this stage of the investigation. As a result, the demand may be broadly formulated. In the example, Adviser A's (or his office's) entire information on the X-group is demanded. How should one deal with the situation where the X-group consists of fourteen companies, and the office works for all these companies? The administration, financial statements, and tax returns of the fourteen companies are stored in various software systems. Additionally, there is extensive email correspondence in the mailboxes of Adviser A and his colleagues. Not only is it nearly impossible for Adviser A to deliver all the demanded data, but this also gives the impression of a fishing expedition. In such a case, it is preferable to consult with the FIOD official or the public prosecutor. In practice, it is often possible to reach workable agreements. The FIOD might, for example, issue an amended (more narrowly defined) demand in this case.
For questions, you can contact our attorney-at-law who specializes in tax fraud cases (Debbie Liem: debbie.liem@vdb-law.nl or +316-31969502).