Horizontal monitoring: Some procedural tax law issues and their broader meaning

In this chapter, some procedural law aspects have been discussed in the context of Horizontal Monitoring, the Dutch co-operative compliance model. The leading idea is that collaborative and trust based relationships between taxpayers and tax administrations are nowadays indispensable to ensure taxpayers’ voluntary compliance, which in turn is vital to an efficient and legitimate enforcement of tax law. Horizontal Monitoring embodies a more informal approach to this legal relationship. It is based on the awareness that an exclusive (legal) focus on competencies, obligations and rights of, and tax administrations and taxpayers respectively, often goes at the expense of timely problem-solving and of meeting important needs and interests of the taxpayers. For such an elaborate and complex legal system framework there are often unintended results, viz. juridification and antagonistic interaction. In practice, parties become too easily entrenched in legal arguments. It goes without saying that few tax administrations and taxpayers benefit from such trench warfare.
An informal approach is about co-operation rather than about competencies, obligations and rights, without neglecting the legal framework in force. In a co-operative relationship based on trust, transparency and mutual understanding, there is a willingness to go beyond compliance with regard to procedural law requirements (disclosure etcetera). Hence, the informal approach accounts for an important shift within the framework of the statutory techniques of the levying of taxes. The interaction between NTCA and taxpayer occurs early: information is exchanged proactively and diverging views on legal consequences are debated early in order to establish agreement or disagreement.