Countering Tax Avoidance
Countering Tax Avoidance

Summary/Abstract: The Anti Tax Avoidance Rule discussed in the article breaches systemic principles that compel the legislator to respect the principle of a democratic rule of law (as per Article 2 of the Constitution). In an obvious and clear way, the rule betrays the principle of legitimate expectation of the state and statutory tax law. It means that the rule is contradictory to Article 2 of the Constitution in conjunction with Article 31, section 3 of the Constitution. Thus, a constitutional regulation was breached, which obliges the legislator to make precise - that is, unambiguous in terms of the substance, scope, and prerequisites - permissible interferences in taxpayers’ rights ratione personae. Arbitrary inhibition of the freedoms guaranteed by the Constitution, including economic freedoms, is all the more hazardous for the taxpayer because the procedural regulations applicable within the framework of the rule, which are intended to protect the taxpayer from abuse of the rule, are only apparent; they are a legal illusion. This, in turn, breaches the principle of mutual loyalty that the taxpayer-state relation is supposed to be characterised by. The rule has these qualified faults because: a) It does not ensure legal security of the taxpayer; b) It does not respect the principle of descriptiveness of the provisions of tax law; c) It breaches the principle of mutual loyalty that the taxpayer-state relation is supposed to be characterised by; d) It also breaches the principle of legitimate expectation of the state and the tax law it passes. By the fault of the legislator, the legal construction of the rule is unclear, imprecise, and ambiguous, which creates uncertainty as to the rights and obligations of the taxpayer, and so it creates a basis for arbitrary decisions of tax bodies because the freedom of the tax authority’s decision is excessive.

• Details
• Contents