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

Research output: Chapter in Book/Report/Conference proceedingChapterScientific

Abstract

Recently, the Netherlands Tax and Customs Administration (NTCA) introduced a redesign of its ‘Horizontal Monitoring’ model. This co-operative compliance approach is based on trust, transparency and mutual understanding between NTCA and (corporate) taxpayers. It is a way of enhancing voluntary compliance, which is to say payment of the right amount of tax at the right time.
This informal approach is about co-operation and fait treatment rather than about competencies (powers), obligations and rights, without neglecting the legal framework (including the principles of proper administrative behaviour) in force. In a co-operative relationship there is a willingness to go beyond compliance with regard to procedural law requirements (disclosure, etcetera).
Horizontal Monitoring must be seen as supplementary to traditional, vertical supervision. This is the traditional command-and-control method of regulation, whereby the authorities use unilateral enforcement powers such as the power to invoke disclosure requirements, audits and sanctions (like (administrative) penalties and reversal of the burden of the proof).
This updated chapter is structured as follows. Firstly, the basic characteristics of Horizontal Monitoring are briefly summarized with a view to procedural tax aspects. Then, an overview is presented of the normal legal framework which determines NTCA’s enforcement powers and taxpayers’ obligations. Thirdly, some aspects of the statutes and legal principles in force are elaborated upon because, at first sight, the Horizontal Monitoring approach might seem to be at variance with these aspects of the legal framework. This is followed by some conclusions.
Original languageEnglish
Title of host publicationTax assurance
EditorsRonald Russo, Ronald Hein
Place of PublicationDeventer
PublisherWolters Kluwer
Pages215-252
Number of pages38
Edition2nd
ISBN (Print)9789013160741
Publication statusPublished - Jul 2022

Keywords

  • Tax assurance, co-operative compliance, Horizontal Monitoring, voluntary compliance, legitimacy, trust, transparency, risk management vertical supervision, procedural tax law, principles of proper administrative behaviour, compliance agreement, covenant

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