A Maltese lawyer specialising in tax, Dr Robert Attard, has been instrumental in winning a case in Czech Republic, where his team argued that a tax penalty should be treated as a criminal charge. He believes that every signatory country to the European Convention for the Protection of Human Rights should adopt the system.

This would allow the accused to have better defences throughout court proceedings, and ultimately allows them to better mitigate the penalties imposed by the courts.

The argument has been used by Dr Attard previously in local cases, such as Angelo Zahra vs the Prime Minister, May 2015. This, however, begs the question as to whether similar cases in the past could be reopened due to being treated as a civil case, meaning those accused had fewer tools at their disposal, such as not being tried under the presumption of innocence.

EY’s Tax Policy Leader for the whole of Central and south East Europe, Robert Attard was a legal consultant in the case, and has successfully used this argument in a number of cases in Malta. He explained that by considering a tax penalty as a criminal charge, the safeguards awarded to those accused in a criminal case would be available to the taxpayer in dispute.

“By treating these cases as criminal ones, those accused would have better defences at their disposal. They would be better positioned to argue their case,” he explained when speaking to The Malta Independent.

“If you have what is called an administrative penalty, which is deterrent and punitive, then the same guarantees of a criminal trial should apply.”

This would safeguard against unfair outcomes such as being put in jeopardy twice due to the same offence and having laws applied retrospectively, he added.

Asked about whether it is within the EU’s remit to impose criminal proceedings in the case of tax penalties, Dr Attard said that those countries who are signatory to the European Convention for Human Rights are obliged to ensure that the way a court arrives at the penalties is fair. Article 6 of the Convention thus requires tax authorities to respect national and international criminal law principles when imposing tax penalties.

In the Czech Republic case, Dr Attard’s team stopped the tax authorities from applying a retrospective tax penalty on a Czech company, creating an important precedent on taxpayer protection. The tax authorities argued that it was not a criminal case therefore criminal law principals cannot apply.

Ultimately the Czech Supreme Administrative Court reviewed decisions of the European Court of Human Rights, and supported the company’s claim that it is indeed a criminal case. This resulted in the court ruling that the lesser penalty should apply, in line with criminal law principals.