DAC6 : The CJEU Reaffirms The Importance Of Respecting The Lawyer's Professional Secrecy

• Published date: 13 December 2022
• Subject Matter: Tax, Tax Authorities
• Law Firm: Bonn & Schmitt
• Author: Mr Gabriel Bleser and Stéphane Ebel

The Court of Justice of the European Union ("CJEU") has just strongly reaffirmed in its judgment dated 8 December 2022 (case C-694/20, Orde van Vlaamse Balies) the fundamental character of the principle of professional secrecy for lawyers.

In this case, the Belgian Constitutional Court referred a question to the CJEU for a preliminary ruling in order to know whether Article 1 (2) of Directive 2018/822 (the so-called DAC 6 Directive, as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements) infringes the right to privacy guaranteed by Article 7 of the Charter of Fundamental Rights of the European Union (the "Charter"). Such clause in the Directive obliges a lawyer who is subject to professional secrecy, and therefore not subject to the obligation to declare such tax schemes, to notify any intermediary, who is not the lawyer's client, without delay, of their reporting obligations to the competent tax authorities.

The CJEU concluded, after recalling that Article 7 of the Charter grants enhanced protection to exchanges between a lawyer and his client in the name of what the CJEU describes as " a fundamental role in a democratic society" and that professional secrecy also encompasses legal advice, that Article 1(2) of Directive 2018/822 " is invalid in the light of Article 7 of the Charter".

In line with the principle of proportionality, the CJEU went on to state that although "combating aggressive tax planning and preventing...