On June 13, 2022 on the website of the Dutch courts the conclusion of Advocate General Niessen in 22/01627, ECLI:NL:PHR:2022:553, was published. In the underlying case, following the judgment of the Gelderland District Court of February 15, 2022 regarding a dispute on the mandatory use of eRecognition authentication method for filing the required wage tax return, the AG filed an appeal in cassation in the interest of the law.

Introduction

Under the Electronic Messaging Tax and Customs Administration Regulations (EBV Regulations) as of January 1, 2020, taxpayers and withholding agents – who for example wish to file a VAT return, a corporate income tax return or a wage tax return without the intervention of an intermediary or without the use of commercial tax return software – are obliged to file their returns digitally via the portal 'MijnBelastingdienst lacelike' (MBD-Z). An eRecognition authentication method with confidence level 3 is required for logging into the MBD-Z portal. This login method is only available from commercial parties.

The Dutch Government has acknowledged the eRecognition authentication methods with confidence level 3 of 6 commercial parties. A taxpayer therefore has to obtain such an eRecognition method from one of these 6 parties against a remuneration in order for being able to login into the MBD-Z portal. The yearly costs for such acknowledged the eRecognition authentication methods with confidence level 3 vary from EUR 40.95 to EUR 45 (Excl. VAT).

Summary of the facts

In a case tried before the Gelderland District Court an ex-officio wage tax assessment was issued on behalf of an employer. The employer took the position that it did have the will to file a wage tax return, but that it could not file such a return because it did not have an acknowledged eRecognition method at its disposal. According to the interested party, there is no legal basis for filing a tax return by means of eRecognition as long as the Digital Government Act has not yet entered into force.

The Gelderland District Court judged that no legal basis exists for the obligation to use an acknowledged eRecognition method (with confidence level 3) and that therefore the ex-officio assessment had to be annulled.

On 16 March 2022, the Secretary of State indicated that the Tax Inspector had not appealed against this decision of the Court, since the withholding agent was not liable for payroll taxes for the period in question. As a result, according to the Secretary of State and the Tax Inspector, there is no tax interest to lodge an appeal. However, both the Inspector and the Secretary of State have stated that they do not agree with the Court's opinion that there is no legal basis for obliging certain taxpayers to purchase an eRecognition method from a commercial party in order to comply with their filing obligation.

Now that the term for lodging an appeal against the judgment of the Gelderland District Court has expired without an appeal being lodged, the possibility exists to file an appeal in cassation in the interest of the law.

In view of the uncertainty that has arisen after the judgment of the Gelderland District Court regarding the legal basis for the mandatory use of an acknowledged eRecognition method for being able to file tax returns, the far-reaching consequences of the judgment and the fact that for the time being the Digital Government Act has not yet come into effect for the time being, the AG is of the opinion that it is in the public interest that the Supreme Court gives its opinion on the correctness of the Court's decision. Especially now that – to the AG’s knowledge – there are no other pending cases about eRecognition and it is unclear when this will change.

The AG is of the opinion that the obligation to file a tax return by means of am eRecognition method can be found in Article 2:15, Paragraph 1 of the Algemene Wet Bestuursrecht (Awb) (General Administrative Law Act) and Article 3a, Paragraph 2 of the Algemene Wet inzake Rijksbelastingen (AWR) (General Tax Act).

Article 2:15, Paragraph 1 of the Awb reads as follows: “A message can be sent electronically to an administrative body insofar as the administrative body has indicated that this route is available. The administrative authority may set further requirements for the use of the electronic means”.

Article 3a, Paragraph 2 of the AWR reads as follows: “The manner in which electronic messaging takes place is determined by ministerial decree”.

According to the AG, the 2 aforementioned articles offer the minister the opportunity to set further requirements not only with regard to the content, but also the way in which a message is sent electronically to an administrative body. The Minister made use of its competence by laying down in the Regeling Elektronisch Berichtenverkeer Belastingdienst (Regeling EBV) (Regulation Electronic Messaging Tax and Customs Authorities) that it is mandatory that authentication means are being used that comply with European regulations with regard to the access security of (governmental) information systems that process personal data. Therewith according to the AG the Minister stayed within its competence.

The AG therefore demands that the judgment of the Gelderland District Court is set aside without the judgment to be delivered harming the rights acquired by the parties.

The full text of the conclusion of the AG, as published on the website of the Dutch courts can be found here. (Only available in the Dutch language)

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