The European Union’s top court has backed a Luxembourg law firm which refused to hand over documents about a client’s affairs to the country’s tax authorities on the basis of confidentiality.
The law firm was justified in refusing the order, the European Court of Justice (ECJ) said in a ruling at the end of last week, reinforcing an earlier non-binding opinion from the court’s advocate general issued in May.
The case centred on a decision by Luxembourg’s Direct Taxation Administration to fine a law firm for failing to produce four years of communications, contracts and invoices related to an unnamed Spanish company that was its client. Luxembourg tax officials acted after information was requested by Spanish tax authorities.
Also read:Lawyer-client confidentiality blocks tax authority, EU advisor says
The order by Luxembourg’s tax office constituted “an interference with the right to respect for communications between a lawyer and his client” which is enshrined in the EU’s Charter of Fundamental Rights, the ECJ ruling last week concluded. There were no factors in the case which merited an exception and justified the order, the court said.
While a lower Luxembourg court had backed the tax authority’s decision, the country’s higher Administrative Court had referred the case to the ECJ for guidance.
The Luxembourg Bar Association got involved in the case to defend the confidentiality of lawyer-client communications, especially after the law firm said its advice solely involved company law involving an acquisition and its financing.
The Bar Association expressed its relief at the ruling in a statement issued on its website.
“The court clarifies that the special protection of professional secrecy extends without distinction to all areas of law,” the Bar Association said.
“In this regard, it notes that current Luxembourg legislation […] generally excludes from the protection of professional secrecy the consultation and representation provided by a lawyer in tax matters, with the exception of what is likely to fall under criminal tax law,” the bar added.
Luxembourg’s Administrative Court will now be tasked with ensuring that verdicts issued by the national courts comply with the ECJ ruling.
Source link : https://www.luxtimes.lu/europeanunion/luxembourg-law-firm-right-to-protect-client-confidentiality-ecj-rules/21549180.html
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Publish date : 2024-10-01 21:32:50
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