Under the settled case-law of the CJEU, the principles of protection of legitimate expectations and legal certainty form part of the Community legal order. On that basis, these principles must be respected by the institutions of the Community, but also by Member States in the exercise of the powers conferred on them by Community directives. It follows that national authorities are obliged to respect the principle of protection of the legitimate expectations of economic agents. (Elmeka NE, C‑181/04 to C‑183/04, para. 31)
With regard to the principle of protection of legitimate expectations, the right to rely on that principle extends to any person in a situation where an administrative authority has caused him to entertain expectations which are justified by precise assurances provided to him (judgment in Europäisch Iranische Handelsbank v Council, C‑585/13 P, para. 95). See also Elmeka NE, C‑181/04 to C‑183/04, para. 31 – 36.
The above means that when a tax administrative authority issues a clear opinion/ decision giving rise to a reasonable expectation in the mind of a reasonably prudent economic agent, which can reasonably believe that the opinion/decision in question had been taken by a competent authority, the principles of legal certainty and protection of legitimate expectations imply that no interest/ penalties should be assessed against that taxpayer – when the tax authority changes, at a certain point in time, its interpretation. One may assume that a clear opinion of a tax authority can be individual (e.g., an individual letter from the authorities or a previous tax audit) or public (e.g., a published circular letter).
Contribution by Maria Cambien
