For political reasons, the Ministry of Finance has prevented the disclosure of tax policy and thus the explanation of tax rules. As a result, citizens and businesses based their tax returns on outdated rules and were not aware of the most current interpretation of the law by the Tax and Customs Administration. There is a chance that they have paid too much tax. This is evident from internal documents that the service recently released after a request for information based on the Open Government Act. The Ministry of Finance has fallen behind on a broad front in the publication of its fiscal positions.
The Tax and Customs Administration has internal specialists who review and answer difficult questions from tax inspectors – questions that arise during the audit of a tax return or during legal proceedings between the tax authorities and a company. These specialists take thousands of positions every year. That can be about anything: the taxability of bitcoin, the VAT on a horse, the deductibility of medical expenses.
Delay
According to the law, the State Secretary for Tax Affairs must make generic positions on the interpretation of tax rules accessible to all taxpayers within six weeks. Internal specialists at the tax authorities have been pushing for faster disclosure of policy for years, but the top of the Ministry of Finance opposed this. In recently released annual reports from one of the departments, the chairman writes that the positions of the tax authorities are ‘politically sensitive’, which means that ‘coordination with the ministry is necessary’. The “consideration of […] political aspects and possible European law implications” then leads to a delay in sharing the rules with the outside world.
Researcher Martijn Nouwen of Leiden University, who requested the documents, says that this threatens the legal certainty and legal equality of taxpayers.
Read here how researcher Martijn Nouwen ended up in a trench war with the Tax and Customs Administration: ‘This leads to legal inequality’
The Ministry of Finance denies that. According to the ministry, some complex tax issues require more coordination, for example “with European authorities”, before they can be made public as a policy decision. “This method actually contributes to legal certainty and equality before the law.” Because the capacity of Finance is limited, says the department, priority must sometimes be given to issues that are politically and policy-wise more urgent than informing taxpayers about new interpretations of the law.
The Tax and Customs Administration will soon put an end to that situation. Finance, which the service falls under, will from now on share its internal views with the outside world, from 1 April next.
Some tax lawyers and public administration experts warn of a ‘tsunami’ of lawsuits. Scientists expect advisors and lawyers to go through all tax positions for legal and financial opportunities.
Interview Martijn Nouwen E4-5
A version of this article also appeared in the newspaper of March 29, 2023
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