Universiteit Leiden

nl en

Basis for legislation

Globalisation leads to more contradictions between national and international tax norms. It therefore seems necessary to revise the fiscal legislation. This is not only due to the problem posed by multinationals, but also to changing norms regarding tax burden distribution. Fundamental research on the basis of legislation reveals the original purpose of certain rules and teaches us more about the relevance of current rules and laws.


Many of the current contradictions between national and international legislation are the result of growing globalisation. A hundred years ago, there were hardly any transnational situations, and states wrote their legislation on the basis of local situations,’ says Professor of Tax Law Henk Vording. He investigates how to ensure that national tax regulations are able to handle globalisation, for instance by developing a separate fiscal regime for multinationals, or by rethinking the differential tax treatment of equity and debt.

In addition, Vording has shown that the case law of the European Court of Justice in Luxemburg cannot lead to a stable tax environment for cross-border activities.

Fundamental questions

In the Netherlands, there is currently a discussion on whether we should modify the tax system to simplify the rules. Any tax reform must address fundamental questions relating to the balance between aims of taxation and practical feasibility of reform. In the end, national and international tax rules are rooted in political philosophy – in our thinking on the distribution of rights and duties over the members of society. And, at a more practical level, it is about the rules of the tax policy game: how to include stakeholders, and how to balance competing interests? For example, corporation tax reform is very much an insider's game where technical legal language obscures the interests at stake. Information on the interests of corporations, such as the impact of changes in effective tax rates on corporate investment decisions, may not be fully available to the tax legislator. This implies that the legislative process, which includes the consultation of stakeholders such as corporations, must provide incentives to those stakeholders to disclose their true interests.

Legal principles

National and international tax rules are constantly changing. Companies respond to the tax rules that apply today and adjust their company structure accordingly. But what if the rules change next year or if new tax rules are introduced retroactively? Will the interests of the taxpayers not be jeopardized if we continuously change the rules on taxation? Is this not a breach of the principle of legal certainty? Or could corporate taxpayers be required to anticipate on changes in tax rules when making their business decisions? The legal tradition has always stressed that legal subjects should be able to rely on the law as it is. Economists, on the other hand, tend to argue that markets (i.e. private economic decisions) are the most effective way of dealing with changes, including changes in the law. Leiden experts in tax law contribute to bridging the gap between economic and legal traditions in this field.

This website uses cookies.  More information.