Judicial control of Administrative Cooperation in Tax Matters, Taxpayers’ Rights and the Notion of “Foreseeable Relevance” in light of the CJEU’s case law: introduction to the series, by Mariolina Eliantonio and Marina Serrat Romani

The concept of “foreseeable relevance” is an essential element of the standard of transparency in tax matters. It has experienced significant changes in its scope and conceptual interpretation during the last few years to ensure a wide exchange of tax information as well as the correct application of international agreements and domestic tax law. The interpretation of the extent and limits of the “foreseeable relevance” notion has been at the centre of a series of CJEU rulings, which have also contributed to defining the scope of application of Article 47 of the Charter of Fundamental Rights in tax cases and question the judicial control in the so-called “horizontal composite procedures”.

In October 2020, in the joined cases C-245/19 and C-246/19 État luxembourgeois v B and Others, the CJEU introduced new nuances on the type of documentation that has to be exchanged among tax authorities. On 25 November 2021, in case C-437/19 État du Grand-duché de Luxembourg v L, the Court focused on the foreseeable relevance of data belonging to groups of taxpayers. The Court issued new criteria to requests of information of a group of taxpayers to avoid being classified under the term of “fishing expeditions”. Both rulings directly affect the taxpayers’ rights and impact the system of administrative cooperation in tax matters. Furthermore, new criteria have been introduced for group requests in the recently passed Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation, known as DAC 7. The OECD standards of transparency for the exchange of information on request, together with the model convention and its commentaries, have been key elements in the shaping of the European scope of information sharing, nurturing its conceptual interpretation and creation of limits.

Both CJEU rulings have also influenced the interpretation and scope of application of the right to an effective remedy contained in Article 47 of the Charter, especially concerning administrative decisions that oblige taxpayers and other third parties to provide an amount of information that might be regarded as arbitrary or disproportionate. Beyond the growing importance of Article 47 in tax matters, starting from the Berlioz I ruling (C-682/15), one can observe a trend of progressive clarification of the question of judicial control of preparatory decisions issued in the context of horizontal cooperation mechanisms (i.e. those in which the process of implementation of EU law takes place exclusively through the interaction between national authorities without the involvement of the EU administration).

These cases go to the core of the need to strike a correct balance between, on the one hand, an effective system of administrative cooperation as a vital tool to tackle tax evasion and avoidance, and, on the other hand, the necessity to protect taxpayers’ rights from possible arbitrary and disproportionate procedures and establish a set of clear limits as to which information can and should be exchanged.

With this series of blog posts, we aim to reflect, from a holistic perspective, on the evolution of the case law of the CJEU from Berlioz I to the recent État du Grand-duché de Luxembourg v L case from both a substantive tax law and a more institutional administrative law perspective. In particular, it aims to examine how the notion of foreseeable relevance has evolved and which impact this evolution has on taxpayers’ rights, as well as to discuss the influence of the OECD and its guidelines on the European legislation to the point they are used by the CJEU as if they were binding. Furthermore, we aim to discuss the influence of Article 47 of the EU Charter on the shaping of the administrative cooperation procedures for taxation purposes, and to analyse judicial review of administrative decisions within the framework of composite administrative procedures.

Posted by Professor Mariolina Eliantonio (Maastricht University) and Dr Marina Serrat Romaní (Maastricht University).

Suggested citation: M. Eliantonio and M. Serrat Romani, “Judicial control of Administrative Cooperation in Tax Matters, Taxpayers’ Rights and the Notion of “Foreseeable Relevance” in light of the CJEU’s case law: introduction to the series”, REALaw.blog, available at https://realaw.blog/?p=993.