Exception of unconstitutionality – tax law

MAXIM / Associates obtains a referral to the Constitutional Court regarding the provisions of art. 79 ind. 1 of the Old Fiscal Code, regarding the taxation of incomes whose source has not been identified, in a complex fiscal dispute.

The aforementioned text of the law concerns the possibility for the tax authorities to tax the income discovered during a verification of the personal tax situation of the taxpayers, whose source has not been declared and cannot be determined.

The main arguments invoked by the MAXIM / Associates team in support of the exception of unconstitutionality are the following:

•  the legal text in discussion violates the requirements of clarity, predictability, and accessibility, through the lacunar way of regulating this type of tax;
•  taxation carried out pursuant to art. 79 ind. 1 of the old Fiscal Code violates the principle of fair settlement of fiscal burdens, established by art. 56 para. (2) and (3) of the Constitution –is very possible to generate even double taxation;
•  the establishment of the tax is not proportional, reasonable, and equitable, as long as the Fiscal Code does not establish an organized and complete framework for its collection;

The exception was made in the context in which the method of taxing income, the source of which has not been identified, puts any taxpayer in an extremely delicate situation. Specifically, the taxpayers are required to justify in writing all amounts that have transited their personal assets - without taking into account the fact that individuals have no obligation or responsibility to organize their accounts or prepare any type of documents with reference to the operations performed.