ES1.2.4 Quality of legislation in the field of research

With regard to the quality of the legislation in the field of research, it is argued that a number of points in national VAT legislation are incompatible with Union law and are consequently not lawful. In my view, however, these are not the most essential points. They have also been known about for quite some time; the question consequently arises as to why Article 174(2)(b) and (c) VAT Directive, for example, has not been transposed into national law. The extent to which certain aspects of the legislation respect the principle of equality before the law can also be questioned, although these comments are not limited to national legislation. The tax imposed on a sole shareholder actively intervening in a company and demanding some form of remuneration can, for example, differ substantially from that imposed on the same type of shareholder who does not receive remuneration. This difference in treatment is, in my view, disproportional to the differences between the two situations. Another example is the striking difference in the treatment of bonds on the one hand and other transferrable debt instruments, such as commercial paper, on the other hand. A more important point relating to the quality of the current legislation is, in my opinion, the issue of legal certainty. The legislation contains various vague standards, including economic activity, service, use for the purpose of taxed transactions and incidental financial transactions. To a certain extent, the vagueness of these standards is inevitable and can be clarified through case law. When the issue becomes problematic, however, is when no line of reasoning, or at least no clear line of reasoning, can be discerned with regard to the circumstances playing a decisive role in any specific decision. In my view, this applies primarily to the case law of the Court of Justice, specifically that relating to shareholdings. As a result, the clarity and accessibility of the law are less than optimal.