Resolving Australian Tax Controversies: Does the Tax Jurisprudence Under the European Convention on Human Rights Suggest a Better Way?

Abstract

In both his 2013 and 2014 annual reports the Australian Inspector-General of Taxation wrote of the need to consider the adoption of a taxpayers’ bill of rights in Australia. Whilst a charter of taxpayer rights has been a feature of ATO administration for almost two decades it does not provide a legal remedy for an aggrieved taxpayer. In the absence of constitutional protection for fundamental rights, and the inapplicability of Australian human rights legislation to taxation matters, the courts have been reluctant to extend legal protections to taxpayers. If neither the Taxation Administration Act 1953 nor the Administrative Decisions (Judicial Review) Act 1977 are applicable then, typically, taxpayers are left to the vagaries of the ATO’s internal dispute resolution procedures or to attempt to convince the Ombudsman, and now Inspector-General, of the merits of their case.It is notable that in Europe there is a body of jurisprudence on the application of the European Convention on Human Rights to taxation matters by virtue of decisions of the European Court of Human Rights (“ECtHR”). It is proposed to examine these developments to identify if there are any lessons for Australia as we (again) consider the need for, and possible framework of, a taxpayers’ bill of rights. The various articles of the Convention that impact on tax matters will be outlined together with the approach by the ECtHR to interpreting these articles. These principles will then be applied to recent Australian controversies (which otherwise lacked a legal remedy) using as a reference the ECtHR tax jurisprudence. The aim will be to gauge whether an appropriate resolution would have been achieved in these matters had these articles been incorporated into Australian law. It will be demonstrated that, in many cases, with some amendment or re-interpretation, these articles would have provided a legal solution. The paper adds to the chorus of the need to enshrine taxpayer, if not citizen rights, in a legally enforceable document.