Tax secrecy. The road from the protection of privacy to the ‘court’ of public opinion

Abstract

In order for taxpayers to fulfil tax obligations and for tax authorities to audit them, as well as to detect tax infringements, tax authorities need to know a lot of data about taxpayers, while necessarily affecting (restricting) rights to privacy and a private life. The collection and sharing of tax return data and other tax and financial information may be sensitive to the privacy of taxpayers, as it may lead to further conclusions about their decisions, identities, personal relationships and assets. Although the right to privacy appeared in American legal development at the end of the 19th century, respect for tax secrecy has not become self-evident later on, since the disclosure of tax returns and transparency of taxpayers' tax and financial affairs are expected to increase the willingness to comply voluntarily. Accordingly, the level of protection of tax secrecy varies from country to country. The paper examines the basic legal, theoretical, historical and conceptual issues of tax secrecy.