The law is not simple. Especially tax law. Anyone with even a little knowledge of tax law appreciates its sheer complexity. It’s a maze: exceptional regimes, derogations to derogations, circular letters, administrative commentaries and case law, one after the other in rapid succession. Yet, as a society, we expect rules to be followed. That’s why our behaviour is based on a legal fiction: “everyone is expected to know the law”. A necessary fiction: without that assumption, enforceability would indeed be impossible.

However, some actors may be expected to know the law better than others. The tax administration plays a leading role in this regard: it draws up the rules, applies them and monitors compliance with them. Consequently, it is not unreasonable to assume that the administration knows exactly what it is talking about. This is especially true in the context of audits, as it is not only specialised in this area, but also prepared for the correct application of the law.

There are some principles that rarely make the front page, yet quietly make sure our rule of law can be enforced properly. The principle of legal certainty is one such principle. It essentially states something very simple: the law must be knowable and predictable. Anyone who has to deal with the administration must be able to count on a certain steadfastness, and the expectations that the administration has raised in the past. Laws and rules are not a game of dice.

This principle in turn leads to another clear principle: expectations raised must be respected. This is not a matter of courtesy, but of consistency in enforcing the rule of law. When the authorities convince citizens to trust them that a certain attitude will be adopted, they cannot change course on a whim.

The principle of trust fits in seamlessly with this idea, even going one step further. It protects the citizen who can then rely on concrete commitments from the administration. But these commitments do not necessarily take shape on the basis of a formal promise. Through a set course of action, through a consistently implemented policy, through repeated action and based on audit results.

Our highest courts have repeatedly confirmed this principle. At European level too, the principle of trust is expressly recognised as a fundamental right. Not by chance. European legislation dates back to the middle of the 20th century. And at the time the European legislators themselves observed how much the regulations had increased in complexity. The more complex the normative landscape, the greater the need for guidance.

Legal certainty and trust are therefore not abstract terms of the legal jargon. They are the anchor points for every citizen trying to survive in an increasingly complex legal universe. Without these principles, the rule of law would be little more than a maze.

And now, taxpayers are constantly being audited. During audits the facts are on the table. In an earlier check, the tax administration accepted certain costs (and others maybe not). Audit complete. Done and dusted. Today, during a new audit under identical factual circumstances, what was acceptable yesterday is suddenly no longer acceptable. The law has not changed. Neither have the facts.

Under pressure to increase performance and reduce budget deficits, fiscal orthodoxy sometimes seems flexible. What used to be an acceptable tax-deductible expense can sometimes become a private expense today in exactly the same circumstances. What was carefully approved yesterday is now being rejected retroactively.

That’s more than a technical dispute. Such debates touch on the principle of trust. Citizens can assume that the administration knows the law and applies it consistently. Anyone who receives a green light after a thorough audit may expect that light not to randomly turn red as long as the facts and the law remain unchanged. Without this minimum legal certainty, the tax audit ceases to be an application of the law to become a lottery. And under the rule of law, taxation should not be a game of chance.

An auditor must therefore adhere to the principles that his colleagues applied in the past. That doesn’t mean he has to agree with them. In that case, he must expressly inform the taxpayer of this disagreement, stating that from the following year onwards he will not consider himself bound by the previous agreement.

The author is Jan Tuerlinckx, partner at Tuerlinckx Tax Lawyers.

The text is a translation from the column in Dutch.