The concept of tax secrecy is relatively young in domestic jurisprudence. For the first time in the Russian legal lexicon, this term appeared on January 1, 1999, when the new Tax Code was adopted.
The concept
According to Art. 102 of the Tax Code of the Russian Federation, any information about a person who is a taxpayer, which is received by various agencies charged with taxation, as well as law enforcement agencies, is a secret. All information about the taxpayer is protected by special secrecy. By law, access to them cannot be determined by the legal status of a person.
The information that the taxpayer himself divulged or gave his consent to do not belong to tax secrecy. An identification number (TIN) and information on violations of articles establishing the procedure and amount of tax payments are also freely available. If there are agreements on cooperation between tax authorities of different countries, the information specified in international agreements is removed from the category of secrecy. Tax secret is also not information about the income and their sources of persons running for any public office. The same rule applies to relatives of such persons.
Content
The tax services of any country have virtually unlimited access to information on the material condition of any citizen. Since the disclosure of such information is quite capable of causing serious harm to both an individual and a legal entity, the introduction of special articles in tax legislation was required.
Specifically, the information constituting a tax secret includes:
- any information contained in the documents of the taxpayer;
- data on income and expenses;
- information on property and material condition;
- information on taxes and fees paid;
- personal data of the taxpayer.
This list of classified information is not limited. Everyone has the right to keep personal or family secrets, which are also protected from disclosure.
In legal literature, one can often find a classification of various secrets into “friends” and “others”. The former relate to a specific person, and the latter arise if someone has given their personal data to an authorized person (doctor or lawyer) due to professional necessity. Art. 102 of the Tax Code of the Russian Federation declares that only "their" secrets are protected by law. To keep secret the information received from another person, an appeal to other legislative codes is required where such cases are dealt with.
Bank secrecy
The tax code of the Russian Federation provides the relevant authorities with the right to request information from banks on the fulfillment by the taxpayer of payment obligations, that is, payment of due taxes and penalties, if any. However, by law, banks are required to keep secret all information about financial transactions made by their customers if they do not contradict the law.
The situation is ambiguous, therefore, almost any situation related to requesting information from the bank, leads ultimately to litigation. The main tool of the tax authority becomes art. 86 of the Tax Code of the Russian Federation, which spells out the obligations of banks to record taxpayers. In particular, a credit institution is obliged to inform the tax service about the closing or opening of accounts both by individuals and various organizations within five days.Banks are also obligated, upon request, to inform the relevant tax authorities about operations carried out by entrepreneurs.
As follows from the concept of tax secrecy, the content of information received by the tax authority at the bank where the taxpayer account is open is also kept in secrecy.
Getting Taxpayer Information
The tax code defines the rules and methods for obtaining taxpayer information by a tax authority. The main requirement here is the need to receive this information directly in the performance of a representative of a body of authority. If some information becomes available to a tax representative accidentally, then it does not belong to the category of tax secrecy. The Tax Code states that in this case there is not even reason to talk about some kind of secrecy: by definition it is impossible to consider what becomes known to third parties in random order.
The receipt of information about the taxpayer is regulated by three articles. P. 31 of the Tax Code of the Russian Federation gives the acting representative of the tax authority to request the data he needs, and Art. 23 makes the taxpayer obligated to provide such data. In case of failure to comply with this article, the taxpayer is threatened with penalties specified in Art. 129.
The tax authorities receive the necessary information using various methods. The most common are tax audits of income sources. The essence of such a check depends on the nature of the property. This may be a study of testimony of instrumentation, inspection of utility rooms or obtaining clarifications from the taxpayer. All data obtained during these events is information protected in the tax secret regime.
Getting access
Secret information about the taxpayer is stored primarily by the tax authorities, the Investigative Committee and other law enforcement agencies, customs and outside experts involved if necessary.
However, legislation in some cases forces tax authorities to disclose tax secrets. This happens either at the request of representatives of state and investigative bodies with the appropriate authority, or at the request of the court. In addition, counterparties checking the reliability of a potential business partner can access some information that constitutes a tax secret.
The last point is especially interesting. In 2007, the Federal Tax Service Inspectorate refused to provide counterparties with the data they requested, motivating their decision to keep this information confidential. The position of the Federal Tax Service Inspectorate was disputed in court and found to be unlawful. The court decision was due to the fact that information was requested about violations of tax laws. For the reliability of a business partner, such information is simply necessary. In this regard, any person has the right to receive a certificate of trustworthiness of the taxpayer.
Access Procedure
Disclosure of tax secrets at the request of a body authorized for this or a representative authorized by it is made subject to several conditions. First, the necessary request must be submitted on the letterhead of the organization that makes it. Such a statement must be registered as an official document. The text of the request is certified by the seal and signature of the head of the organization that has applied for classified information. The request will not be considered valid if in its text there is no reference to a normative act that makes it possible to request secret information.
To gain access to tax secrets, it is very important to substantiate in detail the goals pursued by the organization requesting information about the taxpayer.The possibility of obtaining the necessary information will increase significantly if you bring the details of official documents (court orders, criminal sentences), on the basis of which the requirement for access is implemented.
Sanctions for the disclosure of tax secrets
Before talking about penalties for violating the secrecy regime, it should be decided in what cases we can talk about the disclosure of classified information. The law defines cases in which there is a disregard for the legal requirements for compliance with tax secrets: this is either the disclosure of secret information by a tax authority or the loss of documents that contain relevant information.
However, legal liability does not extend to such violators by default. The simultaneous implementation of three additional factors is required:
- The disclosure of tax secrecy caused significant damage to the taxpayer.
- The guilt of an official who leaked information is established and proven.
- It was also proved that it was the disclosure of classified information that caused the taxpayer to suffer damage.
If all three factors have worked, then several options are available for damages to the victim. First of all, material damage is compensated at the expense of the state budget, since it was the state body that leaked the information. The direct culprit of the disclosure of information can be punished for both administrative and criminal offenses. In the first case, a fine of 4-5 thousand rubles is provided for legal entities and 500-1000 rubles for individuals. In the second case, the violator faces a three-year restriction of freedom. If the damage suffered by the victim was especially significant, then the term of imprisonment may be extended to 7 years. It is also possible sending for forced labor for up to 5 years.
Tax publicity
In Western European legal practice, it is possible to openly declare information on the size and sources of income and other tax information. The possibility of tax publicity is based on the right of every citizen guaranteed by the Constitution to get acquainted with documents issued by state authorities if they relate to the observance of his rights and freedoms. Payment of taxes, by definition, is a public law obligation, and if someone, especially a statesman or public figure, shies away from it, then it harms all citizens. Western European legislative codes provide a list of information from the tax return — tax secrecy continues to exist as one of the basic human rights — which can be published. The exercise of the right of each taxpayer to take measures aimed at monitoring the implementation of each tax duty is carried out by the annual publication of relevant information.
Changes to the Tax Code
In 2016, the grounds on which this or that information is to be kept in secret were reviewed. Three items were added to the list of data not included in the tax secret category:
- information on the average number of registered employees of the company submitted for one calendar year that precedes the year the information was posted on the organization’s web page;
- information about the organization paid in the calendar year preceding the year the information was posted on the organization’s web page or any other website, taxes and fees excluding fees paid in connection with the importation of goods into the customs territory of the EEC, taxes paid by the tax agent;
- data on income and expenses on documents reflecting the annual financial statements of the organization for the calendar year preceding the year of publication of such materials on the Internet.
In addition, amendments to the law now require the publication of information on arrears and arrears of the taxpayer for each item, as well as on the possibility of applying appropriate measures to it, on the official website of the federal executive body. However, the placement of such information is strictly controlled by federal law. The state guarantees that the information extracted from the financial statements will not be disclosed, and also stipulates the number and nature of requests, according to which the information will be disclosed. The introduction of this amendment is due to the workload of the tax service: the number of counterparty requests for disclosure of information confirming the good faith of their partner has long exceeded all possible limits. The reaction of the tax authorities was the statement that they would no longer provide such information, since by law they are only given the right to disclose it, but this is not their responsibility.
The value of the institution of tax secrecy
From a legal point of view, this institution protects the legal rights and interests of a taxpayer in protecting information on the amount of income and other personal information, regardless of whether it is an individual or a legal entity. In addition to guaranteeing that certain information is kept secret, the taxpayer is also protected by the institution of banking secrecy: as mentioned above, credit organizations are extremely reluctant to disclose any information about their customers, even despite the requirements specified in the Tax Code.
Tax secrecy is one of the fundamental rights of any person. It is for these reasons that the legislation provides for various measures for its preservation, regardless of which medium the information is stored on. However, one should not rely too much on secrecy and forget about those cases where a secret can be revealed, especially when requested by counterparties checking the reliability. This consideration becomes especially important in the light of recent amendments to the tax legislation of the Russian Federation in relation to certain types of information that no longer constitute tax secret.
