Procedural Versus Substantive Law: A Balancing Act in the EU
Tax Notes International, Vol. 57, No. 8, pp. 683-694, February 22, 2010
13 Pages Posted: 5 Apr 2010
Date Written: April 1, 2010
The procedural aspect of taxation has been growing in importance. The application of procedural rules is of particular importance in a multijurisdictional environment like the European Union. When there’s no political consensus over harmonization, regulatory competition will be prevalent. The procedural aspect of harmonization has thus emerged as an area that could help Europe achieve better coordination regarding taxation.
The importance of procedural law has long been recognized in the area of European Community law. Procedural law was developed in the 1980s to identify the member state responsible for the damage caused by its legislation that was adopted or not applied consistently with Community law. No effective legal protection of the rights of European citizens can be ensured unless they are able to gain access to the easy enforcement of their rights.
On June 11, 2009, the ECJ published two judgments addressing the procedural issues of European tax law. The ECJ had the opportunity in these cases to strike a balance between national and Community law. In the first case (joined cases C-155/08, X, and C-157/08, Passenheim-van Schoot), national procedural tax law has gained renewed recognition over Community law, with the proviso, however, that national law must remain consistent with the Community law principles of equivalence and effectiveness. The second case (C-429/07, X BV) provides a rare example when national tax law is superseded by harmonized Community law. Note, however, that national tax law is overwritten by harmonized nontax law. This article looks at how these judgments affect the evolving Community law on tax procedures.
Keywords: effectiveness in legal protection, procedural tax law
JEL Classification: K34
Suggested Citation: Suggested Citation