Decision regarding securing of evidence in cloud services

The Supreme Administrative Court has found that there is no legal basis for the securing of evidence to the extent it applies to documents stored in so-called cloud services.

When the Swedish Tax Agency performs an audit of a taxpayer, the agency may, under certain circumstances, by means of so-called securing of evidence, search for and seize documents necessary for the audit. The decision regarding securing of evidence is taken by an administrative court following application by the Swedish Tax Agency.

Documents refers to both physical and electronic documents. Electronic documents may be stored in a so-called cloud service. By this is meant that the documents are physically stored on servers run by a service provider and that the person who uses the service obtains access to the documents via the Internet.

The Swedish Tax Agency decided to audit a taxpayer and applied to search and seize, inter alia, documents in the taxpayer’s business areas related to a stated e-mail address and a digital marketplace, i.e. documents stored in cloud services.

The Supreme Administrative Court stated that securing of evidence for tax purposes is a measure of the type which, pursuant to the Instrument of Government, requires legal basis.The provisions regarding securing of evidence in the Tax Procedures Act apply to searches and seizures of documents on premises and in other physical areas.The provisions also cover electronic documents stored in, for example, computers and storage media of various types. However, this presupposes that the storage location is known and can be specified in the decision regarding securing of evidence.

However, there are no provisions regarding the securing of evidence in the form of searches and seizures of documents which are stored in cloud services the physical storage location of which cannot be localised. Accordingly, there is no legal basis for granting the Swedish Tax Agency’s application for securing of evidence to the extent it applied to documents stored in the relevant cloud services. 

Read the judgment here: