Big data tax audits: the conceptualisation of fishing expeditions

Abstract

ABSTRACT The technological ability to collect, process and extract new and predictive knowledge from big data has changed our society. Based on large amounts of information about e.g. location, payments and communication, patterns can be detected and profiles about citizens can be generated and applied. Knowledge acquired from big data is valuable to tax administrations because it makes the global fight against tax fraud more efficient. Big data usage by tax administrations does raise significant legal questions, however, one being the extent to which such use could qualify as a ‘fishing expedition’. It has been argued that tax administrations are not allowed to search (‘fish’) for information, the existence of which is uncertain. A closer look at the concept of ‘fishing expeditions’ unveils that there is no generally accepted definition, although authors and judges often refer to it. This article provides an oversight of the main characteristics of this concept using a selection of case law of the ECtHR, CJEU and the EGC, literature and policy documents. The identification of these characteristics enabled us to draw conclusions on what fishing expeditions possibly are, and which consequences this may have for the legitimacy of big data gathering and use by tax administrations.