Unformatted text preview: delocalization
between the regions. The framers’ desire is clearly understood although it does not define the notion of “unfair tax
In its provisional advice,39 the council of state notes that the precise scope of this notion is unclear and that it is
impossible to ascertain whether this notion must be perceived as an applicable jurisdictional control criterion, in this
instance, by the court of arbitration. The sentence was nonetheless maintained in order to provide a basis for eventual
recourse launched by a region that feels cheated by a tax measure introduced by another region that nonetheless meets
the conditions stipulated by the legislation.
The council of state recommends that the vague notion of “unfair tax competition” be replaced by the notion of an
economic and monetary union, more broadly centred on law, which would provide a more relevant control criterion. We
object to this recommendation. Detrimental tax competition engenders a tax rate war in order to attract the tax base.
Rates in the different regions may be identical to each other but below the current level. In this case, tax revenues
decrease markedly but, given the uniformity of rates, the economic and monetary union is not threatened. The latter
notion is thus not sufficient, in our view, to protect the Federal State from the detrimental effects of unfair tax
b) Margins control and technical feasibility
A region that intends to introduce a tax reform with respect to additional personal income taxes or refunds must follow
First, it must inform accordingly the federal government and the governments of the other two regions. In conjunction
with this exchange of information, a collaboration procedure is necessary to ensure the technical applicability of the
reform. Such a procedure has yet to be defined in a cooperation agreement between the regions and the federal
Second, it must request the opinion of the general assembly of the court of auditors. The opinion deals with compliance
with the margins and with the non-reduction of the progressivity of personal income tax. In order for the court of auditors
to have the means to issue an opinion, the reform projects and proposals must be accompanied by “sufficient statistical
data.”41 In the case of a draft decree, the opinion is requested prior to the submission to the council of the proposal; in
the case of a proposed decree, the opinion is requested after its approval by a commission but prior to its examination
during a plenary session.
The opinion of the court of auditors is submitted within one month. If the deadline is exceeded, the regions are not bound
to take account of the opinion. Furthermore, the opinion is not binding. It was initially proposed that the regions that
disregard the opinion of the court of auditors be subject to a fine. During the negotiations, this penalty was abandoned in
favour of another option, i.e. that no region could implement a tax reduction or in...
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