News item | 24-06-2022 | 16:15
The cabinet wants to accommodate groups of citizens and entrepreneurs who have experienced adverse consequences of the Fraud Signaling Facility (FSV). That is why responsible State Secretary Van Rij of Fiscality and the Tax and Customs Administration presents his way of thinking about how he wants to meet people who have suffered damage as a result of registration in the FSV. In the coming months, further work will be done in these proposals on the legal basis, the implementation consequences and the financial consequences. A final decision will then be made, in consultation with the House of Representatives. This is stated in the ‘Design letter for compensation FSV’ that will be sent to the House after the Council of Ministers and which will be debated after the summer recess.
State Secretary Van Rij wants to look to the future with the measures taken: “I understand that the use of the FSV has damaged confidence in the Tax Authorities – and thus confidence in the government as a whole. I’m very sorry. Citizens and entrepreneurs must be able to count on a fair selection and handling of the declaration. That is why the cabinet wants to accommodate citizens and entrepreneurs who have experienced adverse consequences from the FSV. We want to regain trust, although I realize that this cannot be done overnight. I will work on that together with the tax authorities.”
It was established for a large group of registered persons that registration in the FSV had no material adverse effect. The tax treatment by the Tax Authorities has been regular for approximately 220,000 of the 270,000 citizens and entrepreneurs. This group is informed that there is no material adverse effect on them. The cabinet wants to apologize again to them, but proposes not to make any concessions.
Missed debt restructuring
Between 2012 and 2021, the tax authorities wrongly rejected requests to participate in the amicable debt restructuring (MSNP). According to the most recent analysis, requests from between 5,000 and 14,000 citizens may have been incorrectly rejected. It will be determined at the latest this autumn whether this has indeed been the case. Because there are no more files with the Tax Authorities for the years 2012 and 2013, unfortunately, people from this period cannot qualify for the compensation scheme.
40% to 70% of the people who have been wrongly rejected are still admitted to some form of debt restructuring within six months. In the letter, the State Secretary presents his mindset on how he wants to meet this group. People who have been wrongly denied access to amicable debt rescheduling, and who are not admitted later, may also have ended up in forced recovery or in a personal bankruptcy. This could have had a lot of impact. The cabinet will present a proposal by this autumn at the latest. Subsequently, the implementation consequences and the legal basis will be further elaborated.
Violation of privacy
Both the Dutch Data Protection Authority (AP) and PwC have determined that the use of the FSV has violated the privacy principles. The AP has imposed a fine on the Tax Authorities for this. It is serious that the Tax and Customs Administration has not complied with the GDPR. That should never have happened. The cabinet once again apologizes to citizens and businesses in an individual letter for the registration in the FSV and for violation of the privacy principles. This will start after the summer.
The State Attorney has been asked for advice in order to assess whether and how intangible damage should be done in the event of violations of the GDPR. The government concludes from this that the adverse consequences of a registration in FSV must in principle be determined in order to assess whether someone is entitled to compensation for non-material damage. The government proposes to only proceed to compensation for non-material damage if an investigation shows that the damage has been suffered as a result of the registration in the FSV.
Selection
Following the PwC reports, the State Attorney has also looked into compensation for the selection of declarations for intensive supervision (the selection at the gate). The State Attorney, like the Supreme Court, argues that selection in the supervision of the Tax Authorities is in principle not affected by the way in which information about a taxpayer is processed. Unless a fundamental right has been violated in the processing or selection, such as the prohibition of discrimination based on origin or religion.
That is why the government proposes to reassess the returns for which PwC explicitly states that there is a risk that the selection was more focused on the personal characteristics of the taxpayer than on tax risks. This concerns the declaration of almost 11,000 persons between 2012 and 2019. If the assessment shows that it is plausible that an individual selection of the declaration has involved a violation of a fundamental right, the cabinet proposes that the correction to the to cancel the declaration. This concerns, for example, a prohibited distinction on the basis of origin or religion.