Hans Gribnau and Sonja Dusarduijn of Tilberg Law School have made available for download article Principles-based Tax Drafting and Friends. On Rules, Standards, Fictions, and Legal Principles, published in Leiden University. The abstract is as follows:
Tax complexity is a multi-faceted and pervasive phenomenon. Narrow, detailed drafting of the law is a particular manifestation of tax complexity. Tax legislatures often try to control and regulate every conceivable situation by issuing very specific rules covering the full range of circumstances. The result is a tax system is populated by dense thickets of often thorny rules, which lacks transparency and goes at the expense of certainty and equality.
Principles-based legislation is sometimes termed as an alternative regulatory instrument to counter both the complexity of detailed tax drafting and tax avoidance. However, it should not be seen as a magic formula but rather as a helpful addition to the legislature’s toolbox.
In this article we will elaborate on principles-based legislation, rule-based drafting, and two other drafting styles – legal fictions and standards. We investigate these three ‘friends’ as alternatives, or supplements, to precise rules from the perspective of (legal) principles as advocated by the legal philosopher Dworkin.
It will be argued that securing the integrity of tax law requires a balancing act between different legislative drafting styles such as fictions, standards and principles-based legislation.
To see the full article, click Principles-based Tax Drafting and Friends. On Rules, Standards, Fictions, and Legal Principles by Hans Gribnau and Sonja Dusarduijn.
Posted by Lana Al-Saloum, Associate Editor, Wealth Strategies Journal.