1. Joint PhD Thesis Claudia Sanò EATLP Congress Istanbul 29-31 May 2014
LEGAL PRESUMPTIONS IN NATIONAL TAX SYSTEMS (ITALY AND BELGIUM) AND IN EU LAW
Joint PhD Thesis
Claudia Sanò
EATLP Congress
Istanbul May 2014

2. Subject and Main Goal of the Research
The concept of ‘legal presumption’ is investigated in national tax systems (Italy and Belgium) in a comparative perspective and within the EU law framework...
... in order to explore whether and to what extent legal presumptions, which in national tax systems are essential to the operating of tax authorities, may be deemed as being (in)compatible with EU law, both in uniform or harmonized sectors and non-harmonized ones
Possible Conflicts with EU Law
With the substantive rules of a tax uniform or harmonized at EU level
Under the form of procedural rules governing a tax (making excessively difficult or impossible the exercise of an EU right or more proportionate means are conceivable)

3. Research Questions and Scope of the Study
I) Common core concept of ‘legal presumption’ at European level?
Examination of :
civil law systems (IT, BE, FR)
and a common law system (UK)
II) Tax law presumptions in national legal orders?
Comparative analysis of Italian and Belgian tax systems
III) EU approach to tax law presumptions (core scheme, criteria of evaluation of tax law presumptions’ compatibility and conditions for consistency)?
Customs duties, VAT, Direct taxes: different types of impact on national legislation in tax matters … plus the significant case law on the repayment of taxes unduly levied
Testing some of the Italian and Belgian legal presumptions against EU law in the light of the above criteria

4. Conclusion (I) (Definition of a Common Core Concept)
Shared European understanding of the concept of presumptions:
Legal presumptions are means of (legal) proof normally codifying a rule of experience and intended to alleviate the burden of proof ordinarily resting on a party by:
Governing a certain matter (Irrebuttable) OR
Altering the division of the burden of proof but allowing the proof to the contrary (Rebuttable)
Presumptions hominis (logical inferences drawn by the judge of the concrete litigation and freely evaluated by him) and legal fictions

5. Conclusion (II) (Tax Law Presumptions in National Legal Orders: Italy and Belgium)
Scenario offered by the examination of the Italian and Belgian tax systems under a comparative view (to examine possible differences and with an eye to the subsequent discussion of the EU law context)
Symmetry as to the recourse to legal presumptions and questions at issue; different level of debate within tax literature (e.g. about substantive/procedural nature, similar notions)
The control concerning legal presumptions is entrusted to the constitutional court: though some divergences as to the line of thought adopted, in both tax systems the focus is on the ‘structure’ of the legal presumption (reasonableness, normal course of events, indices revealing the ability to pay, equality, proportionality, proof to the contrary).

6. (General) Conclusions (III) (EU Law)
Looking at the EU law framework and CJEU case law examined:
The ‘effects’ of national legal presumptions are relevant, in terms of reversal of the burden of proof
Disregard for distinctions normally relevant at national level (e.g. substantive/procedural; irrebuttable presumptions of law/legal fictions)
Tax law presumptions are generally looked at – though to a different extent depending on the level of harmonization - as possible obstacle to the effective enjoyment of EU rights/freedoms or application of EU legislation or principles. This calls upon a scrutiny, particularly in the light of the principles of effectiveness and proportionality

7. (General) Conclusions (III)
Since the focus is on the effects on the actual enforcement of EU law:
Irrebuttable presumptions of law (and notions having same effects) are generally looked upon with disfavour: the absence of proof implies that they ‘automatically’ restrict on the EU right/freedom concerned or affect the relevant EU rule;
Rebuttable presumptions of law raise questions as to whether the subject and means of proof (in general, the procedural guarantees) offered in rebuttal are appropriate and do not prevent the exercise of the EU right/freedom concerned.
They are not per se consistent with EU law (see case law on presumptions that indirect taxes collected in breach of EU law, for which the refund is claimed, passed on to customers) as the difficulties of contrary proof are taken in great consideration

8. (General) Conclusions (III)
General criteria that result from the examination of CJEU case law are to be specified when dealing with different areas of tax law
In Customs law:
Irrebuttable presumptions of law are rejected as they are able to jeopardize the uniform application of Customs legislation
Preference for non-binding instructions
In VAT area:
Legal presumptions enacted on the basis of the VAT Directive clauses allowing derogations are required to be proportionate (= irrebuttable presumptions affecting fundamental elements of the VAT system are normally rejected)
Same is true for purely procedural legal presumptions disproportionately hindering the exercise of rights conferred to taxpayer by VAT Directive

9. (General) Conclusions (III)
In Direct taxation:
National measures discriminating against non-residents or cross-border situations by presuming the inexistence of conditions for benefiting from certain tax treatments amount to a difference in treatment that cannot be accepted on the grounds of administrative difficulties
Legal presumptions in anti-abuse national measures may be accepted provided that:
They are narrow in scope (the known fact must be specific; targeted at wholly artificial arrangements, non-arms’ length transactions); also, no excessive administrative burden upon taxpayer
The contrary proof is envisaged and can effectively be given by the taxpayer
A number of factors may influence the outcome, even within the same tax field. Eg. rationale of the national provision (simplification vs. prevention from tax avoidance or evasion), balanced allocation of Member States’ taxing rights, prima facie proof, legal certainty, case by case assessment

10. Conclusions Testing Italian and Belgian Legal Presumptions against EU Law
By a way of exemplification and in short, in the light of the criteria stemming from the examination of the EU law framework and CJEU case law:
Certain legal presumptions concerning the assessment and tax authorities’ powers of inquiry (particularly, in the area of VAT) appear to be vague and based upon indices that are not indicative of tax evasion
A number of legal presumptions in anti-abuse rules fail the specificity test, so as to call upon a less vague way of defining the known fact (e.g. with black-lists)

11. Thank you for your attention!