The ECJ, Retrospectivity and the Member States' Tax Revenues

British Tax Review 2006 (1) 91-112

21 Pages Posted: 22 Mar 2016

See all articles by Henk Vording

Henk Vording

Leiden University - Leiden Law School

Allard Lubbers

Leiden University

Date Written: March 1, 2006


This article explores the question whether the ECJ should take account of the budgetary consequences of its decisions in the field of taxation, when deciding on the temporal effect of these decisions. The authors first suggest a normative framework for answering this question, by making the established economic analysis of retrospectivity in tax legislation applicable to retroactivity of Court decisions. It is argued that ECJ decisions should in principle have retroactive effect, because this creates a learning incentive to both taxpayers and Member States. However, if the ECJ's taxation case law is insufficiently predictable in terms of scope and speed, this incentive collapses, and retroactivity creates private windfall gains and social losses. Some ECJ case law in taxation is discussed, to see how the Court in fact deals with the problem of budgetary consequences.

Keywords: retroactivity in tax law, retrospectivity in tax law, European Court of Justice

JEL Classification: H20, H30, H87

Suggested Citation

Vording, Henk and Lubbers, Allard, The ECJ, Retrospectivity and the Member States' Tax Revenues (March 1, 2006). British Tax Review 2006 (1) 91-112, Available at SSRN:

Henk Vording (Contact Author)

Leiden University - Leiden Law School ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA

Allard Lubbers

Leiden University ( email )

Postbus 9500
Leiden, Zuid Holland 2300 RA

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