In Belgium, tax disputes usually arise following a tax audit of an individual taxpayer, either routine or targeted. They can also arise following tax audits targeted on a specific topic (eg, a standard transfer pricing questionnaire or where the existence of a foreign bank account is revealed by an automatic exchange of information) or towards a specific economic sector.

Taxpayers might also choose to file their tax return to accord with the tax authorities’ views and subsequently appeal their own tax assessment, thereby avoiding incurring penalties. This strategy rules out the taxpayer being denied the facility of offsetting the additional tax base with existing tax assets (since there is now a rule against doing so if a post-audit penalty of 10% or more is imposed).

Most tax disputes involve federal income tax (including withholding taxes). Though small in money terms, local taxes (municipal and provincial) also constitute a large proportion of the judicial caseload.

Taxpayers can exclude the chance of ending up in a dispute regarding federal income tax and other taxes levied or administered by the federal tax authorities (eg, VAT) by applying for an advance tax ruling (which provides legal certainty except in certain circumstances; see 6.4 Avoiding Disputes by Means of Binding Advance Information and Ruling Requests).

The OECD’s Base Erosion and Profit Shifting (BEPS) recommendations, the EU’s recent measures to combat tax avoidance and any subsequent amendments to double tax treaties or domestic legislation in line with them, and the recent ECJ case law on abuse, are beginning to translate into tax disputes in Belgium. As a result, the number of disputes and the focus on the above-mentioned developments appear to have increased, but it is currently too early to tell. In particular, the impact of the DAC6 reporting requirements on the number of tax audits has also to be monitored.

Other than in a limited number of cases, taxpayers are not obliged to pay disputed tax nor provide a guarantee to do so before bringing a challenge or whilst litigation is pending but can choose to do so and thus stop the accrual of interest in the eventuality that the challenge fails.

In recent years, the tax authorities have developed their data-mining capabilities to identify which individual taxpayers and groups of taxpayers are worth auditing; their algorithms are a closely held secret. Tax audits can also be launched upon another basis. Recently, many audits are initiated following international exchange of information (eg, Common Reporting Standard).

Income Tax

A tax audit can be performed in a given financial year (the taxable period) and during the three following years (during the four following years if the taxpayer has not filed a tax return or has filed it late). By way of exception, the three-year period is extended to six years for “semi-complex” tax returns and to ten years for “complex” tax returns or in case of suspected fraud.

A tax return is deemed to be “semi-complex” in six specific cases where the taxpayer’s situation has a cross-border dimension and requires additional time for the tax authorities to carry out their audit. A tax return is deemed to be “complex” in presence of very complex cross-border situations, namely the presence of a hybrid mismatch arrangement, the application of the Controlled Foreign Corporation (CFC) rules or the presence of a legal construction in another State.

In cases of suspected fraud, the tax authorities can exercise their powers for ten years, though they must give the taxpayer due notice in writing of the suspicion of fraud and the intention to consequently apply the ten-year period.

The above four-, six-, or ten-year periods do not apply to tax audits related to assessment year 2022 and earlier, for which the investigation and assessment period is three years or seven years in case of suspected fraud (and ten years in a very specific case where the taxpayer uses a legal construction in a jurisdiction that is not bound to exchange information with Belgium and that is listed as having no or low tax, in order to conceal the origin or existence of assets).

If the tax authorities receive information from a foreign tax authority showing income not properly reported during any of the five previous calendar years (or even any of the seven previous calendar years in case of fraud), they have two additional years from the time the information is received to conduct a tax audit pertaining to this information and to assess the tax.

Furthermore, the tax authorities have an additional one-year investigation and assessment period where a tax audit reveals an infringement by a taxpayer of his withholding tax obligations during the five years preceding the finding of such an infringement. In such cases, the tax authorities can conduct an in-depth tax audit of the fulfilment by the taxpayer concerned of his withholding tax obligations during the five-year period in question.

A tax audit does not suspend or interrupt the limitation period.

Tax audits can be performed remotely (by means of requests for information or videoconference), at taxpayers’ or their accountants’ premises, or at the office of the tax official doing the audit. The right to access company premises (also called “visitation” or a site inspection), whether announced or unannounced, is one of the general investigative powers available to the tax authorities. Documents are made available to them in either hard or soft copy.

As of 1 January 2025, all communication with the tax administration will be done in principle electronically (through a secure platform).

Lately, tax auditors have been very much on the lookout for transfer pricing and international transactions generally. They are helped by a number of transfer pricing documentation requirements (namely local file, master file and country-by-country reporting) and a special schedule attached to the corporate tax return listing payments made directly or indirectly to entities established in tax havens. Also, cross-border withholding tax matters attract increased attention since the ECJ issued its judgments in the so-called Danish cases. The updated withholding tax declaration forms undoubtedly increase data-mining opportunities.

The rules concerning cross-border exchanges of information and mutual assistance between tax authorities have given rise to an increase in tax audits in Belgium, with information received from foreign tax authorities triggering tax audits by the Belgian authorities (eg, revealing the existence of undeclared bank accounts).

Some joint audits are occurring with the authorities of foreign States, but they are still very rare.

The main point is to be clear on what the tax authorities can and cannot legally ask for. Experience shows that the tax authorities do not infrequently ask for things that fall outside their investigative powers, but do not raise a protest when they are reminded of the boundaries thereof.

In income tax matters (and some other tax matters), an administrative claim must be lodged against the tax assessment before court action can be launched. Such claims are dealt with at an administrative level higher than that of the tax inspector who assessed the tax. There is no centralisation of such administrative claims.

Taxpayers have an opportunity to discuss their file with the official in charge of investigating the claim and, if they wish, can call in the tax authorities’ internal reconciliation service to try and find common ground between the positions of the taxpayer and the tax inspector.

A special administrative procedure applies for the remission of penalties and late payment interest.

In income tax matters the administrative claim should be lodged within one year of the tax assessment, and the tax authorities should issue their decision within six months (extended to nine months if the disputed tax was assessed “ex officio”, and extended to ten months if the special reconciliation service is asked to intervene); in the absence of a decision at the end of this waiting period, taxpayers can choose to still wait for a decision or submit the dispute to the Court of First Instance, thereby ending the administrative claim phase.

Tax litigation is always initiated by the taxpayer filing an appeal with the registrar of the Court of First Instance, in income tax matters no later than three months after an administrative decision on the administrative claim has been issued (and, in the absence of such decision, any time after the administrative claim has been pending for the waiting period; see 3.2 Deadline for Administrative Claims).

Taxpayers challenge their tax assessment before a specialised chamber of the Civil Division of the Court of First Instance. The proceedings follow the rules of civil procedure. The taxpayer is usually represented by an attorney, the tax authorities often by a tax official.

They exchange submissions and then the court hears oral arguments at a hearing that lasts generally one or two hours, less often somewhat longer or shorter, depending on the complexity of the case. A few months after oral arguments, the court issues its written judgment. Both the taxpayer and the tax administration can then lodge an appeal before the Court of Appeal.

As in most civil cases, witness testimony in tax cases is very rare (if not non-existent). The court relies on documentary evidence, including – sometimes – transcripts of interviews conducted with the taxpayer or third parties by the authorities during the tax audit. New documentary evidence can be submitted and expanded on during the appellate phase.

As a rule, the burden of proof rests with the tax authorities, although it rests with the taxpayer where a deduction, exemption or credit is claimed. The burden of proving criminal intent always rests with the tax authorities – ie, in allegations that the taxpayer knowingly and wilfully evaded tax.

See 13.1 Strategic Guidelines in Tax Controversies.

Regarding jurisprudence, international guidelines, etc, all such sources are relevant, but case law plays the greatest role by far (despite the absence of a stare decisis principle in Belgian law). In practice, Belgium’s courts defer to rulings by the ECJ and ECHR, as well as judgments handed down by the Constitutional Court and the Court of Cassation; they regularly submit requests for preliminary rulings to the ECJ and the Belgian Constitutional Court.

Once the Court of First Instance has ruled, both the taxpayer and the tax authority can appeal to the Court of Appeal, where the process is essentially the same as at first instance. Appeal courts have full jurisdiction to rule on law and fact. Both the taxpayer and the tax authority can then take the appeal judgment to the Court of Cassation, whose jurisdiction is nevertheless limited to issues of law; if it quashes the appeal judgment, the Court of Cassation will remit the case in principle to another Court of Appeal.

The procedure in tax appeals is the same as at first instance; see 4.2 Procedure of Judicial Tax Litigation.

The procedure differs before the Court of Cassation, commencing with a writ setting out the objections to the appeal judgment. This writ may only embody legal issues. The purview of the Court of Cassation may not extend beyond the objections set out in the writ. The respondent has three months to respond to them. Subsequently, an opinion is issued by one of the advocates-general, either in written form or orally at the hearing. It is customary not to present oral arguments at the hearing (other than in exceptional circumstances) and merely to refer to the written submissions.

Tax matters are heard before the Court of First Instance, the Court of Appeal and the Court of Cassation, by independent professional judges with a legal background and experience usually broader than just tax. In the Court of First Instance and the Court of Appeal they usually sit alone, in a chamber that specialises in tax matters. Neither party has any say in which judge(s) will hear the case.

In the Court of Cassation, tax cases are generally handled by a bench of five judges sitting in the Civil Division, the procedure being similar to that in the ECJ with an advocate-general issuing an opinion and one of the five judges acting as judge-rapporteur, who studies the case in depth and drafts the judgment of the court.

Belgium is bound under the competent authority procedure provided for in its wide network of double taxation treaties (DTTs) and the EU Directive on tax dispute resolution mechanisms in the European Union. The Arbitration Convention, which is binding on all EU member states, the above-mentioned EU Directive and some Belgian DTTs include arbitration provisions.

At a domestic level, the only ADR mechanism available to taxpayers is to request the reconciliation service within the tax administration to investigate disputes in an endeavour to reconcile the positions of the taxpayer and the tax inspector, but such service can only make (non-binding) recommendations.

See 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction.

Advance tax rulings (officially named “advance decisions in tax matters”) are issued by the Rulings Service, an autonomous section of the tax authority. Tax rulings cannot depart from the provisions of law (no “sweet deals”) but do provide taxpayers with legal certainty as to the interpretation of facts and law relative to transactions contemplated by them as described in their ruling applications.

Rulings are binding on the tax authorities provided: the conditions governing them are adhered to; the situation or the transactions are fully and correctly described by the applicant and their essential elements are carried out as described; and essential consequences of the situation or the transactions are not affected by one or more related or subsequent elements due directly or indirectly to the applicant.

Whether the tax authorities are bound by other published or individual administrative guidance on which taxpayers might reasonably rely in good faith is currently a matter of controversy, unless the tax provisions at issue are in the implementation of EU law, in which case the overriding EU principle of legitimate expectation applies.

See 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction.

See 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction.

See 6.1 Mechanisms for Tax-Related ADR in This Jurisdiction.

Administrative fines are often imposed by the tax authorities, together with tax assessments. For instance, in income tax matters, the tax due on unreported income is increased with a penalty ranging from 0% to 200%, depending on the seriousness of the infringement and the taxpayer’s previous conduct; an increase of 50% or more is only charged in cases of fraud – ie, where the tax authorities can prove that the taxpayer acted knowingly and wilfully in failing to report income (not for tax assessments based exclusively on the general anti-avoidance rules (GAAR)).

In addition to ad valorem tax increases, lump-sum fines can also apply (eg, general administrative fines ranging from EUR50 to EUR1,250; a fine of EUR6,250 per year for non-disclosure of a reportable foreign entity or trust; fines of EUR1,250 to EUR25,000 for failure to comply with the transfer pricing documentation requirements; fines of EUR1,250 to EUR100,000 for non-compliance with DAC6 rules or fines of EUR1,250 to EUR50,000 for non-compliance with DAC7 rules).

Administrative fines are imposed by the tax authorities, and such fines are reviewed by the same courts as verify whether (and how much) tax is due. Criminal penalties are demanded by the public prosecutor and imposed by the criminal courts.

Under the una via principle, tax infringements may be prosecuted only once, by either administrative or criminal penalty. The principle is that taxpayers may not be prosecuted twice for the same set of facts (non bis in idem, or double jeopardy). According to this una via principle, a consultation between the tax administration and the public prosecutor must be held in certain circumstances to decide whether the case will be subject to public prosecution or to the administrative procedure. The public prosecutor has the final say. In the case of criminal prosecution, the judge who is handling the criminal procedure is also competent to decide on the civil tax claim (including administrative fines). When determining the criminal penalty, the judge will then have to take into account the imposed administrative sanction.

A recent reform provides for a closer collaboration between tax and judicial authorities through specialised joint investigation teams (the so-called “MOTEMS”). Such co-operation will allow twenty-five tax officers to temporarily provide assistance in criminal investigations under the direction of the public prosecutors. Evidence collected by tax agents may be used for both criminal investigations and tax assessments.

Whether a particular case warrants raising a criminal prosecution is at the discretion of the public prosecutor (in certain circumstances after consultation with the tax authorities), who is obliged to inform the tax authorities if a criminal investigation reveals indications of tax fraud. Criminal prosecution of tax infringements is rare because of the complexity of the investigations and also due to the possibility for the public prosecutor to terminate the criminal tax prosecution by means of a “penal transaction” settled with the contravener – see 7.6 Possibility of Agreements to Prevent Trial. In most cases, only administrative fiscal surcharges are imposed on the contravener (in amounts up to 200% of the tax evaded).

Twice a year, the tax authorities and the College of the General Prosecutors hold a strategic meeting to determine priorities.

The stages in the administrative tax infringement process mirror those in the tax assessment process. The fiscal criminal procedure follows the general rules of criminal procedure. At first instance, the criminal court usually sits with a single judge specialised in criminal tax law. In the case of criminal prosecution, the judge who is handling the criminal procedure is also competent to decide on the civil tax claim (including administrative fines).

Upfront payment of an additional tax assessment does not qualify the taxpayer for a reduction in any fine charged for the relevant tax offence. Administrative fines can, however, be reduced by courts where the amount is disproportionate to the offence or where there is a breach of the taxpayer’s right to a fair trial within a reasonable time. The tax authorities have broad discretion to reduce or remit administrative fines.

At its own discretion, the public prosecutor may decide (with the agreement of the tax authorities) to prevent criminal tax prosecution or to stop the criminal tax prosecution by settling a “penal transaction” with the contravener(s). The penal transaction takes the form of a payment of a sum of money, including the payment of the evaded taxes. It is not possible for the contravener to constrain the public prosecutor to opt for the penal transaction.

Once the Court of First Instance issues its judgment, both the taxpayer and the public prosecutor can appeal to the Court of Appeal, where the process mirrors that at first instance (the Court of Appeal usually sits with a bench of three judges). Courts of Appeal have full jurisdiction as to law and fact. Either the taxpayer or the prosecutor can then appeal a Court of Appeal judgment to the Court of Cassation, whose jurisdiction is nonetheless limited to issues of law; if it quashes the judgment, the Court of Cassation remits the case in principle to another Court of Appeal.

Tax avoidance that is only open to challenge under the GAAR is not classed as fraud, and therefore attracts only limited administrative penalties (eg, 10% tax increase). This is, in general, not applicable where a specific anti-abuse rule applies. In purely transfer pricing disputes, any administrative fine charged by the tax authorities is usually only minor.

In cases of double taxation due to duplicated tax assessments or adjustments in cross-border situations, it is common to apply both domestic litigation and the available mechanisms under the relevant double taxation treaty. With the entry into force of the MLI and the EU Tax Disputes Directive, it is expected that binding arbitration, in particular, will become a more common option to resolve international tax disputes.

The tax authorities take the view that anti-abuse rules can also be applied in cross-border situations covered by bilateral tax treaties. Given the primacy of bilateral tax treaties, this may be controversial in certain circumstances if the tax authority claim is inconsistent with the applicable treaty. In addition, the language of the GAAR seems to restrict its scope to abuse of domestic provisions. Case law provides no clear guidance in this respect. It is too early to tell how the PPT test introduced by the MLI and the amendment of the DTT preamble will affect the way tax authorities combat BEPS, as the tax authorities already apply the Belgian GAAR in cross-border situations. At this point in time, the authors’ experience is that the tax authorities are mainly focusing on the impact of the judgments of the ECJ in the so-called Danish cases in 2019 and the anti-abuse provision in the Anti-Tax Avoidance Directive.

The main transfer pricing adjustments are traditionally challenged under domestic law, especially the Belgian concept of “abnormal or gratuitous benefits” or the general rules on allowable expenses. In 2004, Belgium explicitly introduced the arm’s length principle into its domestic law (inspired by Article 9 of the OECD Model Convention).

It is common to apply to the Rulings Service for a unilateral advance pricing agreement in the form of a tax ruling; see 6.4 Avoiding Disputes by Means of Binding Advance Information and Ruling Requests. The process usually starts with a pre-filing phase, in which the envisaged structure is explained and discussed. In the second phase, a written ruling application is submitted in which the facts and circumstances and tax analysis are set out in detail (together with supporting documents, such as benchmarking studies), and the decision is rendered based on this. The entire process generally takes four to six months. An anonymised version of the ruling is subsequently published. Rulings are valid for a period not exceeding five years. No fee is charged.

Bilateral advance pricing agreements are infrequent. Applications go to the tax authorities’ International Relations Department and need to be submitted before the end of the first year intended to be covered. The International Relations Department co-ordinates applications with the other relevant jurisdictions. Bilateral APAs are not published. The time taken for the process varies and can extend over several years in complex files. No fee is charged in Belgium.

Tax litigation arises in the standard cross-border domains (eg, withholding tax, permanent/fixed establishments, transfer pricing). There has been a substantial increase in transfer pricing litigation in Belgium as a consequence of the government’s development of its transfer pricing unit, a specialist team within the federal tax authority. Recently, specialised teams have been created within the federal tax authority that focus on restructurings, complex cross-border group structures and outbound passive income. Litigation is also on the increase concerning the tax residence of corporate and individual taxpayers, as well as regarding withholding taxes.

Belgium has been involved in several “fiscal” State aid disputes. In the recent past, the most notable case relates to the so-called “excess profit tax rulings” that the European Commission of 11 January 2016 decided was an incompatible State aid to be recovered from the beneficiaries. This tax ruling offered Belgian resident companies that are part of a multinational group and Belgian permanent companies established abroad that are part of a multinational group, the benefit of deducting an “excess profit” (ie, exceeding an arm’s-length profit) from their taxable base in Belgium. At first instance, the Commission’s decision was annulled by the General Court of the European Union, which ruled that the Commission had erred in treating the different tax rulings granted as the implementation of a “scheme”. Following an appeal filed by the European Commission, the European Court of justice annulled the General Court’s judgment and referred the case back to the General Court, which will have to decide on the open questions.

Other Belgian tax rules that were considered as incompatible State aids include the corporate tax exemption granted to Belgian ports (2017) and the so-called co-ordination centres tax regime (2003). It is worth mentioning that, in both cases, the European Commission did not order that tax be recovered from the beneficiaries.

Since there is no general legal framework regarding the recovery of fiscal or non-fiscal State aid, Belgium implemented an ad hoc procedure to recover the State aid granted through the excess profit tax rulings (Programme Law of 25 December 2016). This ad hoc procedure has been mainly inspired by the common tax procedure under which the recovery of the incompatible State aid is entrusted to the tax administration through the issuance of an additional tax assessment.

In the framework of the ad hoc procedure regarding the excess profit tax rulings, the same remedies as those provided for by the income tax procedure have been made applicable mutatis mutandis (see 3.1 Administrative Claim Phase and 4.1 Initiation of Judicial Tax Litigation). The taxpayers who had received an excess profit tax ruling (or most of them) have lodged an administrative claim against the recovery and most of these claims are still awaiting a final decision of the EU Courts.

Although the introduction of such an action is not inconceivable, there is no precedent in case law of the recognition of the extra-contractual civil liability of the Belgian State in relation to the refund by a taxpayer of an incompatible State aid.

Belgium has opted for mandatory binding arbitration as provided for in Article 18 of the MLI. In the Belgian Model Convention, a binding arbitration clause is included that is almost identical to the arbitration clause in the OECD Model Convention. Although arbitration clauses are included in a number of DTTs, this is not always the case. In particular, no arbitration clauses are currently included in the tax treaties in force with the neighbouring countries (France, Germany, the Netherlands and Luxembourg).

Belgium has chosen to make the mandatory binding arbitration under the MLI feasible in as many cases as possible. It has not made a reservation to limit their scope and does not object to limitations of scope made by the treaty partner jurisdiction. However, mandatory binding arbitration is not available if a final court decision has been rendered regarding the dispute in one of the concerned jurisdictions.

Belgium opts for Baseball Arbitration. In the explanatory memorandum of the Belgian law approving the MLI, it is clear that the majority of the parties to the MLI that chose arbitration preferred this option, which is quicker and easier. In addition, given that Baseball Arbitration limits the arbitration panel to the viewpoint of one of the competent authorities, these authorities are encouraged to take more reasonable positions, often making it possible to reach a mutual agreement without going to the arbitration stage. Belgium has, however, not made a reservation with regard to treaty partner jurisdictions that have opted for the Independent Opinion Procedure.

The Memorandum of Understanding regarding the application of mandatory binding arbitration between Australia and Belgium, signed on 3 March 2021, provides for Baseball Arbitration. This option differs from the EU Arbitration Convention and the EU Tax Disputes Directive, which provide an Independent Opinion Procedure. Also, in the Belgium–Japan DTT, which was concluded in 2016, the treaty partners opted for the Independent Opinion Procedure.

Belgium implemented the EU Directive on Arbitration with the Act of 2 May 2019.

The authors are not aware of cases in which the recent international and EU arbitration procedures have been used to settle tax disputes.

Belgium has expressed its support for the implementation of Pillars One and Two on several occasions. While discussions on Pillar One are still ongoing at the OECD, progress on Pillar Two has been much more extensive with the publication of OECD Model Rules in December 2021, followed by the adoption of an EU Directive (2022/2523) in December 2022. Belgium is currently preparing draft legislation in order to implement the Pillar Two Directive before year-end.

At this stage, no specific new procedures have been agreed upon in the framework of Pillar Two. In light of the complexity of the Pillar Two legislation, it can be expected that the number of disputes will increase.

Belgium has opted not to apply the confidentiality obligation in the MLI and has not made a reservation in relation thereto.

The mutual agreement procedures based on the existing DTTs or the EU Arbitration Convention are most often used to settle international tax disputes. It is anticipated that the new instruments (MLI and EU Dispute Resolution Directive) will rapidly gain importance.

Taxpayers generally hire independent professionals (either tax consultants or tax lawyers) to assist them to settle their international tax disputes.

There are no costs to challenge an assessment at the administrative level.

There is no court fee in tax matters. Appeals to the Court of Cassation, however, must be served by a bailiff, which involves a cost of about EUR500, recoverable against the other party in the event of success.

Taxpayers represented by counsel – as they generally are – who win in court are awarded lump-sum representation costs, to be paid by the losing tax authorities. The amount is based on an official tariff, and mainly depends on the money value of the litigation; it rarely covers the attorney’s actual fees. If the tax assessment is ruled to be reckless, the taxpayer may also be awarded damages in tort, though this is rare.

The procedures to obtain advance rulings and bilateral advance pricing agreements entail no official charge.

No general statistics are available encompassing all court tax cases in Belgium and stating their values. At the end of 2021:

• 7,288 cases were pending regarding personal income tax (of which 5,747 were at first instance);
• 601 regarding non-resident individuals (of which 516 were at first instance);
• 2,900 regarding corporate income tax (of which 1,989 were at first instance);
• 41 regarding non-resident companies (of which 32 were at first instance);
• 270 regarding withholding tax on movable income (of which 181 were at first instance); and
• 1,299 regarding VAT (of which 892 were at first instance).

See 12.1 Pending Tax Court Cases.

In federal income tax matters (which exceed all others, at least in terms of monetary value), taxpayers win completely at the administrative level in about 38% of introduced cases and partially in about 10% (based on official statistics for decisions in 2021). Taxpayers who do not fully succeed at the administrative level win in court in about 53% of cases; in VAT matters, taxpayers win in court in about 34 % of cases (based on official statistics for decisions in 2021).

The key point for consideration in tax disputes in Belgium is timing: the timing for filing an administrative challenge against a tax assessment and for going to court, the time at which it is appropriate to raise certain legal arguments and the time at which to pay disputed tax.

Since Belgium is a small country with much inbound investment, due consideration must be paid to whether the Belgian tax is creditable against a foreign tax and what requirements exist for it to be so.

Where the first stage for any challenge is administrative, as in income tax matters, the argumentation should be presented that takes into account the fact that the review is not necessarily performed by a civil servant with a legal background. A variety of different avenues may be open to a taxpayer wanting to challenge a tax assessment and, perhaps, a fiscal penalty, therefore strategic considerations are obviously important in deciding which avenue to choose and when.

Such aspects aside, in a legal system where fiscal disputes are decided in courts under rules of civil procedure by a professional judiciary with legal background and experience usually broader than tax, the strategy in such disputes will not differ greatly from that in any civil cause, which means that the legal arguments are important.

The prime strategy is to refrain from litigating where, on an in-depth assessment, the case lacks merit. When it is decided to pursue a court action, the core task of the litigators is to discover the essence of the case and then effectively communicate it to the bench.