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Rights and obligations of a taxable person in tax proceedings

In tax proceedings a taxable person is a participant in the proceedings who is applying for an administrative act to be issued or a measure to be taken or at whom the administrative act or measure is directed (subsections 43 (1) and (2) of the Taxation Act of the Republic of Estonia (hereinafter TA)).

The communication between the Estonian Tax and Customs Board and taxable persons is held in Estonian, unless they agree otherwise. The Estonian Tax and Customs Board points out that according to § 9 of the Language Act the persons may, by way of derogation apply to a local government authority in the language of the national minority. A taxable person may involve an interpreter or translator in tax proceedings, or the Estonian Tax and Customs Board may do it at the request of a taxable person, or without the request of a taxable person if the Estonian Tax and Customs Board deem it necessary.

The person who requests the involvement of an interpreter or translator by the Estonian Tax and Customs Board shall bear the costs thereof, unless otherwise provided by an Act or regulation, or unless the Estonian Tax and Customs Board resolves otherwise (TA § 47).
 

Rights of a taxable person


Right to representation

A taxable person has the right to use a representative in tax proceedings, who may participate in all procedural acts in the name of the principal unless the personal participation of the principal is required pursuant to law or due to the nature of the act. A taxable person has the right to appear for procedural acts together with a representative whose testimony and requests shall be deemed to have been given or submitted by the taxable person, unless the taxable person in proceedings objects immediately to such testimony and requests (TA § 48).

Submission of an application for removal

A taxable person has the right to submit an application for removal of an official of the Estonian Tax and Customs Board from the tax proceedings. The official may not conduct proceedings in a matter if he or she is a participant in the proceedings or is acting as a representative of a participant in the proceedings, or if he or she is a relative or a relative by marriage or a family member of a participant in the proceedings or of the representative of a participant in the proceedings, or if he or she has a personal interest in the resolution of the matter or if other circumstances give reason to doubt his or her impartiality (TA § 49).

Right to refuse to provide information or submit evidence

A taxable person has the right to refuse to provide information or submit evidence on the grounds specified in § 64 of the TA. The right to refuse to provide information or submit evidence exists:

  • for advocates in respect of circumstances which become known to them in connection with the provision of legal assistance;
  • for doctors, notaries, patent agents and ministers of religion in respect of information which becomes known to them in connection with their professional activities;
  • for agencies which organise state statistical surveys and officials who conduct such surveys in respect of information which becomes known to them in connection with a survey;
  • for auditors and persons engaged in the professional activities of an auditor;
  • for spouses, direct blood relatives, sisters or brothers of taxable persons, descendants of sisters or brothers of taxable persons, and direct blood relatives or sisters or brothers of spouses of taxable persons, unless such persons are required to provide information in the given matter and submit documents in connection with their own tax liability;
  • for persons in respect of questions to which giving an answer would mean that the persons would incriminate themselves or any of the above mentioned persons in an offence;
  • if the provision of information or submission of evidence would violate the confidentiality of messages sent or received by post, telegraph, telephone or other commonly used means or the confidentiality of a state secret.

Persons who assist advocates, doctors, notaries, patent agents, ministers of religion, officials who conduct statistical surveys and auditors engaged in their professional activities have also the right to refuse to provide information in respect of information which becomes known to them in the performance of their duties.

Involvement of experts

A taxable person may apply for involvement of an expert in the proceedings. The costs of an expert assessment carried out on the initiative of a taxable person and at the expense of the Estonian Tax and Customs Board shall be borne by the person on whose initiative the expert was involved. Taxable persons have the right to submit questions to an expert who has been involved in the proceedings on the initiative of the Estonian Tax and Customs Board (TA § 68 and § 69).

Place of conducting the procedural act

The procedural act shall be conducted in the office rooms of the Estonian Tax and Customs Board which are located closest to the place of residence or seat of a taxable person unless otherwise agreed upon (TA § 491).

Hearing of the opinion of a taxable person

A taxable person has the right to submit his or her opinion and objections to the Estonian Tax and Customs Board before the issue of an administrative act concerning the taxable person’s rights, except in the following cases specified in § 13 of the TA:

  • if prompt action is required to prevent damage arising from delay or to protect the public interests, or

  • if the Estonian Tax and Customs Board does not deviate from the information provided by the taxable person in an application, request or explanation and there is no need for additional information, or

  • if the resolution is not made against the taxable person, or

  • if notification which is necessary to enable opinions or objections to be submitted does not enable the purpose of the administrative act to be achieved, or

  • in other cases provided by law.

Providing information to taxable persons

Taxable persons have the right to access information concerning them which is collected by the Estonian Tax and Customs Board and to copy or make extracts of such information. The Estonian Tax and Customs Board has the right to refuse to disclose information if disclosure thereof would hinder the ascertainment of the truth in criminal proceedings (subsection 14 (3) of the TA).

Applying for the extension of a term for performance of obligations

A taxable person may apply for extension of the term granted for the performance of an obligation stated in an order issued by the Estonian Tax and Customs Board. A reasoned request signed by the taxable person for extension of the term for performance of an obligation shall be submitted to the official who issued the order (TA § 50).
 

Obligations of a taxable person


Obligation to co-operate

A taxable person is obliged to notify the Estonian Tax and Customs Board of all facts known to the taxable person which are or may be relevant for taxation purposes. A taxable person shall not prevent the Estonian Tax and Customs Board from performing procedural acts (TA § 56).

Submission of information

A taxable person or a representative thereof is obliged to provide oral and written information to the Estonian Tax and Customs Board in order to ascertain facts relevant to tax proceedings. A taxable person is obliged to appear at the offices of the Estonian Tax and Customs Board at the time designated by the Board in order to provide information (TA § 60).

Presentation of things and submission of documents

A taxable person is obliged to present things, bearer securities and cash in the possession of the taxable person, and to submit the required documents to the Estonian Tax and Customs Board in order to ascertain facts relevant to tax proceedings. Cash shall be presented at the location thereof (TA § 62).

Establishment of identity

A taxable person is obliged to present a valid identity document at the request of an official of the Estonian Tax and Customs Board and to give testimony enabling to establish the identity of the taxable person (TA § 721).
 

Consequences which may arise from failure to perform the obligations

  • Penalty payment for failure to submit information, things or documents shall be applied in the amount stated in a warning issued by the Estonian Tax and Customs Board (TA § 67).

  • Failure to submit a document or a thing by the due date or failure to comply with an order of the Estonian Tax and Customs Board is punishable by a fine (TA § 154).

  • Obstruction of state supervision in a form which did not allow supervision is punishable by a fine or by detention (§ 279 of the Penal Code).

  • Knowing submission of false information to the Estonian Tax and Customs Board is punishable by a fine or by detention (subsections 280 (1) and (3) of the Penal Code).

  • Concealment of tax liability and increase of claim for refund without basis is punishable pursuant to misdemeanour procedure by a fine (TA § 1531).
  • For failure to submit information or submission of incorrect information for the purpose of concealment of an obligation to pay a tax or of obligation to withhold, or increase a claim for refund unfoundedly in the amount of 40,000 euros or more, the person is punished pursuant to criminal procedure by a pecuniary punishment or up to five years’ imprisonment (§ 3891 of the Penal Code).


This document: “Rights and obligations of a taxable person“, is an integral part of a report produced on collection of explanations, inspection, seizure of documents or things, etc.

 

09.02.2017