A taxpayer may appeal to the principle of good faith if he assumes that its fiscal position is assessed on its merits during an audit, regardless if the latter actually happened. During the audit, the inspector is assumed to become aware of any relevant facts or circumstances that could be relevant in imposing an additional tax assessment or correction. If he does not impose an additional tax assessment or correction, the inspector is not entitled to change his opinion at a later stage.
A taxpayer in the employment agency industry was subjected to an audit by the inspector regarding his G-account. The bank statements of his G-account were audited while all other information relating to its tax position was located in the same room where the audit took place. The latter data, however, were not reviewed by the inspector. After the audit ended, no additional corrections were made and no report of the audit was prepared. Irregularities with respect to the contributions and withholding taxes and with respect to the employee data were found during a tax audit, two years later. The inspector responded by imposing an additional tax assessment based on the anonymous rate, as well as a fine.
The taxpayer relied on the principle of good faith and took the position that during the previous audit the inspector did not find any irregularities and was, therefore, not entitled to impose an additional tax assessment.
The Court of Appeal stated that during the audit the taxpayer’s fiscal position was only partly assessed by the inspector. Hence, the Court of Appeal ruled that the taxpayer could not rely on the principle of good faith. Furthermore, the Court of Appeal ruled that the additional tax assessment was justified based on the fact that the taxpayer should save his employee data consistent with his lawful obligation. The law stipulates that this data should be saved by means of a wage tax statement. The fact that the missing employee data is with the taxpayer through other channels, does not affect this legal obligation. The Court of Appeal also ruled the fine in accordance with the law as the taxpayer failed in his administrative obligations that led to insufficient payment of wage withholding tax and social security contributions.