Blog of the International Journal of Constitutional Law

General Anti-Tax-Avoidance Rule and the Belgian Constitutional Court

–Eric Ntini Kasoko, University of Liège, Belgium (PhD Candidate)

On 30th October 2013, the Belgian Constitutional Court ended the suspense as to whether or not the new general anti-avoidance rule (GAAR) applicable to income tax, registration fees and estate tax was contrary to the Belgian Constitution[i]. The Court decision was much-awaited as the new anti-avoidance provisions had been written about extensively since their enactment a few months earlier. Taxpayers in general were also highly interested in the subject matter, so the constitutional complaint was lodged by one of the leading non-profit associations whose objective is to defend the interests of Belgian citizens in tax matters. The complainant intended to quash the new law for his dismissal on the ground that it infringed both the constitutional principles of legality of taxes and equality under the law. Besides, the applicant sought to question the constitutionality of those provisions with regard to the distribution of competences between federal and regional governments. In order to better understand the scope of the Court’s decision, it is useful to take a look back.


It seems clear that the primary motive behind the filing of the action of annulment was closely linked to the defense of the long-standing praetorian construction of the free choice of the least taxed route. Indeed, the Belgian tax system makes a distinction between legitimate tax avoidance and tax fraud. This goes back to the early 1960s, when the Belgian Court of Cassation rejected the Doctrine of fraud legis, which consists in disregarding a legal situation where the taxpayer lawfully but nevertheless abnormally place itself in order to gain tax benefits[ii]. Instead, a taxpayer is allowed to adopt among several possible courses the one by which they will pay less tax. In accordance with that jurisprudence, tax fraud occurs only when a taxpayer resorts to shaming in order to avoid the realization of a tax liability[iii].

To deal with this, a GAAR was first introduced to render the legal qualification of a juridical act unenforceable against the taxation authorities on the ground that the juridical act was designed to avoid tax. Thus, when parties aimed to create the appearance of contractual rights and obligations which do not actually exist, tax may be imposed according to the real situation[iv]. In order for this to occur, tax authorities had to recharacterize the legal transaction but, at the same time, had to keep the legal consequences that the parties intended to attach to their contractual relationship. As Belgian tax authorities usually failed to comply with these requirements, a new GAAR has been recently introduced to more efficiently combat artificial schemes to reduce tax liability. The new GAAR aims at rendering ineffective one or several juridical acts when tax authorities provide good evidence that the taxpayer has acted in a manner that is contrary to the objectives of the fiscal legislation.

A matter of proof

As mentioned above, by its first plea, the applicant alleged violations of the principle of legality of taxes, and of the constitutional rules of equality of Belgians before the law and prohibition of discrimination. According to the applicant, the two provisions at issue may have the effect of shifting the legal burden of proof from the taxation authorities to the taxpayer. In accordance with consistent case-law, when it comes to tax avoidance, the onus of proof rests on tax authorities. As a result, the new GAAR might run counter the principle of the free choice of the least taxed route, by providing that the mere fact of placing oneself outside the scope of a tax norm may be tantamount to illegitimate tax avoidance. Furthermore, still according to the applicant, the reverse onus may empower tax authorities to make amendments to taxable events and tax bases, which is normally the exclusive prerogative of the legislator. This is likely to give rise to an arbitrary administrative practice and hence may amount to infringement of both the principle of legality of taxes and equality under the law[v].

As regards to that plea, the Court pointed out that those provisions might not lead to a reverse onus, but a mere adjustment of the burden of proof. Therefore, it is first and foremost up to the taxation authorities to prove that a taxpayer’s juridical act was exclusively intent upon reducing or escaping tax liability. It is only after that first step that the taxpayer may show proof that their purpose was not of a purely tax-related nature.

It appears that the intent of the legislator might be to ease the burden of tax authorities.  The object of the unenforceability is then likely no longer that of the legal qualification of a juridical act, but of the juridical act itself. In taking this stance, the Court has made it clear that the legislative chance at issue is essentially a matter of evidence, not of determination of taxable base.

On fiscal federalism

As the second plea in law, the applicant claimed that the new GAAR breached the constitutional rules relating to the distribution of competences between federal and regional governments. When it comes to enacting legislation in respect with registration fees and estate tax, the most important features of taxation systems such as taxable bases are solely under the jurisdiction of Belgian regions. By taking legislative measures that are liable to affect the tax bases of regional taxes, the federal authority has infringed rules relating to the distribution of competences between the two levels in public authority.

It is noteworthy that the one of the primary roles of the Belgian Constitutional Court is to referee conflicts between the national authority and the regional bodies. In casu, having stressed the principles stemming from the Belgian Constitution with respect to fiscal federalism, the Court reiterated that the new GAAR had no effect on the major elements of tax bases. The federal authority did not legislate on regional taxes, but slightly adjusted rules of law on burden and standard of proof.


The main conclusion to be drawn is that the federal legislator has remained within its jurisdiction in its search to address the issue of tax evasion more efficiently. No constitutional rule has then been infringed to the detriment of the taxpayer. The latter can, however, comfort themselves in the knowledge that the traditional case-law based-rule of “the free choice of least taxed route” has not been ruled out by the legislator. Interestingly enough, while applying the new GAAR, the taxation authorities must comply with the principles of sound administration. By providing a definition of the notion of tax abuse and a clearer definition of the conditions for its application, the new GAAR complies with the principle of legal certainty and hence prevents the administration from abusing its power.

Suggested Citation: Eric Ntini Kasoko, General Anti-Tax-Avoidance Rule and the Belgian Constitutional Court, Int’l J. Const. L. Blog, Mar. 22, 2014, available at:

[i] Judgment of the Constitutional Court of 30/10/2013, n°141/2013. Available at

[ii] See GRAUBERG T., Anti-tax-avoidance measures and their compliance with Community Law, Juridica International, XVI, 2009, p. 141-150.

[iii] See CARNOY G., Fraus Omnia Corrumpit (Cass. 19/04/2003), www.droit-fiscalité, 15/04/2004. Available at

[iv] See THURONYI V., Comparative Tax Law, Kluwer Law International, Alphen aan de rijn, 2003, p. 158.

[v] According to the jurisprudence of the Court of Cassation of Belgium, infringement of the principle of legality entails automatically infringement of the principle of equality under the law.


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