| Article | Objective Truth vs Beyond а Reasonable Doubt. On the Standards of Proof in Tax Disputes |
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| Authors |
DANYLO HETMANTSEV
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| Name of magazine | Legal journal «Law of Ukraine» (Ukrainian version) |
| Issue | 6 / 2018 |
| Pages | 195 - 209 |
| Annotation | The issues of proof in the context of a legal action, being in the focus of attention of scholars since the time of Roman law, are still relevant in our days. Recently, the standards of proof in tax disputes appear to be of particular interest, since despite their significance, they remain poorly investigated by scholars and undefined by legislators. However, it is the clearness of the rules or standards of proof in a dispute that is decisive for the validity and legality of a judgment in a particular case. The purpose of the article is to investigate into the legal nature of various standards of proof and their correlation with the judge’s inner belief, and also to define the standards of proof by which an administrative court may be guided while adjudicating tax disputes. Today, the theory of law focuses on the three basic standards of proof – “balance of probabilities” (similar to the American standard “preponderance of proof”), “beyond reasonable doubt” and “clear and convincing proof”. Besides, in practice there may be other standards – “establishment of objective truth”, “beyond a shadow of doubt, “separate reliable proof” etc. Since the standards of proof are not consolidated at the legislative level, several opposing approaches have emerged in the court practice to the definition of such standards in administrative proceedings. The Higher Administrative Court of Ukraine pointed to the possible use of such standards as “beyond reasonable doubt” and “establishment of objective truth” in case of tax disputes. The Supreme Court, in its turn, notes that the courts should play an active part in establishment of objective truth taking all measures possible to verify and establish all of the actual facts relevant to the dispute. However, the legislator denies the standard “establishment of objective truth” in the context of tax disputes. This is evidenced, in particular, by its rules prescribing that evidence may be presented and demanded only before the preparatory proceedings are completed; and also by laying of the burden of proof on the tax authority; impossibility to demand that the taxpayer submit other evidence than those confirming the violation of a right; the lack of grounds for the court to take into account an evidence if the contested regulatory body’s decision has not been based on it. At the same time, the establishment of objective truth is not excluded altogether if all of the evidence is submitted by participants of the legal action upon their own initiative and taken into account by the tax authority in the contested decision. Besides, for most of the tax disputes, the standard “preponderance of proof” is unacceptable, since it would significantly reduce the extent of proving the circumstances of a case on the part of the regulatory body, and this, in turn, would lead to a high risk of violation of taxpayers’ rights and the failure to achieve the objective of administrative proceedings. At the same time, this standard may be used in disputes for recovery of damages from the State, penalties for late VAT refund etc., and this will meet the objectives of administrative proceedings. Obviously, the standard of proof “beyond reasonable doubt” makes a judge choose a more responsible approach to assessing the veracity of circumstances in a case, and this is good for the taxpayer and reduces the likelihood of errors. The ambiguity pertaining to the choice of standards of proof in administrative proceedings may be eliminated by defining these standards clearly at the level of law; however, this does not exclude the possibility of establishing them at the level of judicial doctrine.
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| Keywords | standards of proof; objective truth; preponderance of proof; beyond reasonable doubt; judge’s inner belief |
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