Constitutional limits on taxation in Denmark
Keywords:Constitutional tax law, principle of legality, taxing powers, non-delegation doctrine, statutory interpretation of tax provisions, general anti-avoidance rules, GAAR
The authors discuss the Danish legislator’s taxing powers in a constitutional context. The principle of legality, particularly the non-delegation doctrine enshrined in the constitution, prescribes that no taxes shall be imposed, altered, or repealed except by statute. Section 43 of the Danish constitution thus provides a constitutional prohibition on legislative delegation in the tax area. In the view of the authors, the Danish Supreme Court has approached the non-delegation doctrine pragmatically, accepting important modifications regarding both the practical realities of lawmaking and the long-standing practice of delegation of certain taxing powers to the municipalities. In accordance with the prevailing view, the authors reject the notion that a particular requirement for a clear statutory basis for imposing tax follows from section 43 of the constitution. Finally, the authors assess the constitutionality of the recently adopted statutory general anti-avoidance rules and argue that these new provisions are not unconstitutional. This article is – with the kind permission of the publishers – to a large extent based on the authors’ contribution to an international anthology on constitutional principles of taxation: The principle of legality in the context of Danish tax law, in Noções gerais e limitações formais ao poder de tributar (2020), p. 385-400. Belo Horizonte: Fórum.
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