Tax administration principles: procedural equality, cooperation, and instruction
Three principles play a key role in the tax system: the principles of procedural equality, cooperation, and instruction. What do they ensure? With this article, we conclude our year-long series presenting to you the various principles of tax administration.
All articles can be found in the Tips and Tricks section.
Principle of procedural equality
The principle of procedural equality ensures a fair and transparent tax system. It ensures that all persons involved in tax proceedings are treated equally, regardless of their financial situation or social status. Based on their position in the proceedings, all persons involved must have access to the same information and opportunities. This eliminates discrimination or unequal treatment. The tax administration must follow uniform procedures and rules, which promotes the fairness of tax proceedings and contributes to the predictability of the tax process.
The principle of cooperation
This principle ensures collaboration between the tax administrator, the taxpayer, and other persons involved in the tax proceedings. The obligation to cooperate in tax proceedings is imposed on both the tax administrator and the taxpayer. Both have the right to request appropriate cooperation from the other party in the proceedings. In practice, this means that the parties in tax proceedings should remain mutually helpful. If the tax administrator violates this principle, it also means a violation of the principle of legality of the tax proceedings. If, on the other hand, the other party to the proceedings violates it, the tax administrator may impose a fine. Moreover, the tax administrator has sufficient tools to ensure that the objective of tax administration will be met even without the taxpayer's collaboration, i.e. that tax will be assessed and collected.
The principle of instruction
The tax administrator’s duty in tax proceedings is to adequately inform the persons involved in the proceedings about their rights and obligations. However, such instruction is provided only if necessary due to the nature of the act or if the law so provides. It follows from the wording of the law that the tax administrator has a certain degree of discretion as to when and to what extent to provide such instruction; this discretion is limited by the requirement of non-arbitrariness.
The instruction should also include information on the possibilities of defence, whether it involves legal remedies or other effective defence mechanisms. The principle of instruction does not cover the tax administrator’s instructions as to what a person involved in tax proceedings could or should do to achieve the desired result.