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16 AWEMainta Diasabra, 30 Maart 2019

New Zero Tolerance Policy of the Aruba tax

office and Good Public Governance Rules

www.rjk-attorneys.com

New ‘zero tolerance policy’ Legitimate expectation and legal certainty

It appears that the Aruba tax office has implement- Until recently, only exceedingly late filing and pay-
ed a ‘zero tolerance policy’ on the timely payment ment of sales taxes were met with additional assess-

of sales taxes (belasting op bedrijfsomzetten BBO, ments and fees. Late filing and payment of no more

belasting azv BAZV, and belasting avp BAVP). The than a couple of days over the deadline of the 15th

exact date of implementation is not clear. A stricter of each month was permitted, as emphatically told

policy would aim to drastically increase tax revenues to taxpayers by tax officers. At some point, the tax

in order to compensate for political campaign prom- office transitioned to a stricter policy without prior

ises, among others no taxation of old-age pensions, notice to the public (as confirmed by several reliable
as well as to reduce the financial deficit of the coun- sources) which, in combination with a delay in the

try. processing of tax returns by the tax office, effectively

results in a retroactive fining of all late filings and

Good public governance rules payments. This would be in conflict with what the

On the basis of the stricter policy, all late payment taxpayer may reasonably expect, i.e. that he can pay

and late filing of sales tax are met with additional and file a couple of days late without facing retribu-

assessments and fees. Lawfully, the tax office has the tion. Switching to a new stricter policy without prior

right to enforce the tax laws at its discretion. Howev- notice would also be in conflict with the principle of

er, in doing so the tax office is bound to good public legal certainty.
governance rules (algemene beginselen van behoor-

lijk bestuur) which guarantee a fair treatment of the Proportionate sanctioning and using the law

taxpayer. solely for its intended purpose

The application of additional assessments and fees

The rules pertaining to good public governance con- without restriction may be disproportionate in case

sist of among others i) the principle of legitimate the payable tax amount is relatively small and the

expectation (vertrouwensbeginsel), ii) the principle transgression innocuous (e.g. 1 day late payment).
of legal certainty (rechtszekerheidsbeginsel), iii) the Moreover, imposing additional assessments and fees

principle of proportionality (proportionaliteitsbegin- is intended to force the taxpayer to file and remit

sel) and, iv) the prohibition of the misuse of powers timely payment of taxes, and not solely (or mainly)

(verbod van detournement de pouvoir). These prin- to increase tax revenues which appears to be the pri-

ciples are discussed below. mary objective of the tax office.