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Project: Tax audits on "big data": exploring the legitimacy and limits in light of the prohibition of fishing expeditions

2019-01-01 – 2022-12-31


In our increasingly digitised society, tax administrations have started to explore the advantages of
data that is gathered by companies, such as energy suppliers and providers of telecommunication
and payment services. The availability of these so-called “big data”, could make the global fight
against tax fraud more efficient. At the same time, this means that on a large scale often private
information will be acquired by tax authorities, including information about individuals who do not
act in a fraudulent manner at all. Moreover, tax authorities can share this information with other
public authorities who can use the data for their own, unrelated purposes.
Exploiting big data for tax purposes seems incompatible with the principle of prohibition of fishing
expeditions in tax matters. According to this principle, tax authorities are in principle not allowed to
search (“fish”) for information, the existence of which is uncertain. This principle seems generally
accepted by tax legal scholarship, as well as by legislators and judges. Yet, the prohibition of fishing
expeditions is not always interpreted in the same manner. Moreover, there is no explicit legal
ground for this principle although it seems so generally accepted. Therefore, the purpose of this
research project is to explore the different meanings of this principle, to identify whether there is a
(n implicit) legal basis and, ultimately, to assess if and under which conditions tax audits on big data
are legitimate.

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