Even If You Win the Tax Case, the Tax Office Looks at the “Directive”

At the lowest floor of the hierarchy of norms, working almost underground, there is a document; the Tax Offices Operations Directive. Tax cases are won, executions are stayed, judgments become final... But when it comes to the tax office you very often get this answer; “we cannot yet process the transaction in question within the scope of the Directive.”

This directive, of whose existence many colleagues are not even aware, is the invisible hand behind many of the transactions we face every day. Neither a law, nor a regulation, nor a communiqué... Yet a document applied almost above the law.

The tax court orders a stay of execution or an annulment. Under Articles 27/4 and 28 of the Administrative Procedure Law these judgments must be implemented without delay and within thirty days at the latest. But before the court judgment the tax office looks at its own directive; “the annulment judgment has arrived, but before we reverse the transaction you need to complete these documents.” So it is the directive, not the judgment, that gets applied. This is where a serious crack opens between the rule of law and administrative practice.

This text of roughly three hundred pages is practically a tax office encyclopaedia, from commencement and cessation of business to e-inspection, from the conditions for accepting returns to how court judgments are to be implemented, from deferral to precautionary attachment. Even if not every officer has a copy in his desk drawer, sections of this directive are memorised in his mind. If the rule of law is an ideal castle, the tax officer carries the spear of the directive rather than the sword of the court.

So what is the solution? The directive must be shared with the public openly and transparently, its provisions that conflict with legal norms must be weeded out, and it must be redrafted so as to ensure that judicial decisions are implemented without delay. Because tax practice can only advance with the supremacy of law.