Are tax disputes capable of adjudication by a court, tribunal or body independent of the tax authority, and how long should a taxpayer expect such proceedings to take?


Cyprus Small Flag Cyprus

Civil tax litigation is initiated by a judicial review of administrative action (Article 146, Cyprus Constitution). This is because tax authorities are public bodies and so their decisions are subject to judicial review. If any natural or legal person is aggrieved with a tax authority's final decision, an application for judicial review can be made as follows:

A disputed decision on direct taxes can be challenged by submitting an application to the tax tribunal, an independent body. A VAT decision can be challenged by submitting an application to the Minister of Finance. For both direct taxes and VAT, the taxpayer may instead apply direct to the Administrative Court. A decision of the Administrative Court may be the subject of an appeal to the Supreme Court.

Greece Small Flag Greece

The final stage of a tax dispute is the submission of an appeal by the taxpayer before the Administrative Courts. Unfortunately, a taxpayer should expect for long until the determination of the hearing date and the issuance of a final judgement.

Turkey Small Flag Turkey

In Turkey, tax payers either resolve the issues through settlement or applying to court for annulment of a tax assessment. Tax Courts are the special judgment authorities for all tax related cases. In general, first instance courts render their decision within one year; but the appeal procedure takes approximately 2 more years for finalizing the case. Thus, a tax payer should expect approximately 3 years for the whole procedure.

United Kingdom Small Flag United Kingdom

The first instance tribunal for most tax disputes is the Tax Chamber of the First-tier Tribunal (FTT). The Upper Tribunal (UT) commonly deals with appeals from the FTT only on matters of law. However where the case is categorised as complex and where the UT and both parties consent, the UT may hear the case at first instance. A case requiring a hearing of less than a week will usually be heard by either tribunal within a year.

Certain types of claims must be brought in the High Court. For example, claims concerning public law matters are generally best brought by way of application for judicial review in the High Court. Cases in the High Court are unlikely to take longer than in the Tribunal.

Appeals from the Upper Tribunal and the High Court are to the Court of Appeal, then to the Supreme Court. In both instances, permission is required and appeals can only be made (except in extreme cases) on questions of law. Cases usually take around 18 months to complete in the Court of Appeal and two years in the Supreme Court. All tax tribunals and courts mentioned above are independent of HMRC.

Mexico Small Flag Mexico

In terms of the applicable laws, taxpayers have the option of contesting tax liabilities before a different organ of the Tax Administration Service than the one that determined it. Nevertheless, taxpayers are not required to do so in order to have access to different stages of proceedings.

In this regard, taxpayers are entitled to challenge and request the annulment of resolutions issued by tax authorities directly before the Local or Federal Court of Administrative Justice. Likewise, in cases were taxpayers decide to challenge the relevant tax liability before the Tax Administration Service, they still have the option of filing an annulment lawsuit against the administrative resolution that validates the tax liability that was initially determined.

Furthermore, in cases where constitutional violations are claimed to have occurred as consequence of a tax dispute, or the administrative or judicial rulings related thereto, taxpayers could be entitled to file an amparo lawsuit.

Most tax disputes could take an average of one to four years in order to be fully concluded, considering the stages of proceedings available both for authorities and taxpayers.

Gibraltar Small Flag Gibraltar

Appeals arising from the determinations of the Commissioner lie to the Income Tax Tribunal.

Japan Small Flag Japan

Yes. If a taxpayer receives an assessment finding deficiency in tax as a result of the tax audit by the competent reginal taxation bureau or the district tax office, and if the taxpayer wants to dispute it, the taxpayer can file, within 3 months from the assessment, either (i) a request for reconsideration with the National Tax Tribunal, or (ii) a request for reinvestigation with the district tax office or the reginal taxation bureau that rendered the subject assessment. The first choice should be common in practice. The National Tax Tribunal is a quasi-judicial body that reviews the legality and appropriateness of tax assessments, which is claimed to be independent from the tax authority but is technically within the administrative organ of the tax authority.

The review of the National Tax Tribunal generally takes a year. If it renders a decision in favor of the taxpayer, the tax authority cannot appeal and the decision is final. If it renders a decision against the taxpayer, the taxpayer can file a lawsuit requesting cancellation of the assessment, with the district court having jurisdiction over the case, within 6 months from the decision of the National Tax Tribunal. The review of the district court generally takes 1.5 to 2.5 years. If either the taxpayer or the government loses the case, it can appeal up to the high court, where the review would generally take six months to 1.5 years. If either the taxpayer or the government loses the case at a high court, it can further appeal up to the Supreme Court, however, the appealing party has to obtain a writ of certiorari to have substantive review of the Supreme Court; otherwise the appeal is dismissed without considering merits. The review of the Supreme Court, including its review of whether a writ of certiorari should be given, generally takes 1.5 to 3 or more years. These district and high courts as well as the Supreme Court are not a special court for tax or administrative cases, but is an ordinary court that handles civil and criminal matters along with tax cases. In judicial proceedings in courts, an appeal by the government is not prohibited.

Hong Kong Small Flag Hong Kong

Appeals of tax cases usually start in front of an administrative, independent board called the Board of Review. The Board of Review hears the case, including witnesses as needed, and renders a decision in the matter. Appeals from its decisions then move to the Hong Kong judicial system starting with the Court of First Instance and then up the chain to the Court of Appeal and the Court of Final Appeal. Appeals to the Court of First Instance and Court of Appeal are as of right but they are by permission for the Court of Final Appeal.

Resolution of a litigation case is likely to take several years, particularly since the IRD is known for engaging in lengthy exchanges of correspondence with taxpayers before a case is even ready for an appeal.

United States Small Flag United States

Tax disputes can be resolved administratively or judicially. Within the IRS, the IRS Office of Appeals is an independent appeals process where taxpayers can resolve tax disputes. The Office of Appeals will try settle tax disputes without litigation. If no settlement is reached, a taxpayer can still dispute the tax in federal court. Taxpayers can bring tax cases in federal court to the U.S. Tax Court, a federal district court, or the U.S. Court of Federal Claims. All of these courts are independent of the IRS.

Spain Small Flag Spain

Any dispute must be first dealt with the Tax Authorities themselves including a process before the regional and central Administrative Courts (Tribunales Económico-Administrativos). These are bodies that although acting on a similar way as a court, are dependent from the Ministry of Finance. After that, if the dispute remains, the taxpayer could then go to a judicial court.

The timing would vary depending on the competent court and the number of appeals. Considering a normal case dealt by the regional and central administrative court which is then followed by an appeal to Tribunal Superior de Justicia (the High Court of Justice), a reasonable estimation would be 5 years.

If the matter ends up in the Supreme Court, the process may take no less than 10 years in total.

Austria Small Flag Austria

The court of first instance for tax disputes is the Bundesfinanzgericht. A procedure at the court of first instance typically takes one to two years. The court of second and also the final instance is the Verwaltungsgerichtshof (Administrative Supreme Court). Procedures at the Supreme Court usually require two to four years.

Income tax is prepaid in quarterly instalments based on the tax payable in the prior year. Generally appeals do not have an automatically postponing effect. However, suspension may be requested in the case of a first instance appeal and is typically granted by the court of first instance. The Administrative Supreme Court grants suspension of the tax payment only in exceptional circumstances.

Germany Small Flag Germany

Yes, in case the appeal procedure at the administrative level is not successful, the taxpayer may file a court action with the responsible local tax court. The appellate court and highest German court dealing with tax matters is the Federal Tax Court (Bundesfinanzhof). Decisions of a local tax court can be appealed at the Federal Tax Court, if an approval for such an appeal is granted by the local tax court or an action against the denial of such an approval at the Federal Tax Court was successful.

According to the information published for 2013 by the Federal Statistical Office, the average duration of a dispute at a local tax court was approximately 16 months. Disputes at the Federal Tax Court typically take another one or two years before a final decision on the appeal is rendered.

Belgium Small Flag Belgium

If a taxpayer disagrees with his/her tax assessment, then he or she may file a written notice of objection within 6 months from the third working day following the date on which the assessment was sent. The tax authorities will review the case, and ask for all the information that they deem useful, including information from third parties, such as banks and similar institutions. After having reviewed the case, an adviser-general will make a reasoned decision.

If the taxpayer disagrees with the adviser-general’s reasoned decision, then he or she may file a claim against that decision with the local court of first instance, within 3 months after the decision’s notification. If the adviser-general does not make a decision within 6 months from the taxpayer filing his/her notice of objection, then the taxpayer is no longer obliged to wait for the adviser-general’s decision and can directly file a claim against the tax assessment with the local court of first instance.

Following the court of first instance’s judgment, an appeal may be filed with the Court of Appeal within one month. A review of the Court of Appeal’s ruling by the Supreme Court may be requested to the extent that a question of law arises in the matter. The Constitutional Court may be asked to rule on whether a tax law provision is compatible with the Belgian constitution.

The duration of judicial proceedings very often depends on the courts’ workload and may vary from two to three years for the tribunal of first instance and up to five years for of the Court of appeal.

Italy Small Flag Italy

Yes, in case the appeal procedure at the administrative level is not successful, the taxpayer may file a court action with the responsible local tax court. The appellate court and highest Italian court dealing with tax matters is the Supreme Court of Cassation (Corte di Cassazione). Decisions of a local tax court can be appealed first at Regional level and, afterwards, before the Supreme Court of Cassation only for specific topics listed in the civil procedural code.

A tax dispute is normally therefore composed of three levels, since the lower degrees courts are two (Commissione Tributaria Provinciale and Commissione Tributaria Regionale) and there is also a possible appeal before the Supreme Court of Cassation. The procedures at the lower degree courts generally last three years, whilst obtaining a decision from the Supreme Court of Cassation may take few years.

Malaysia Small Flag Malaysia

Ordinary, tax disputes are heard before the Special Commissioners of Income Tax, who are independent of the Inland Revenue Board of Malaysia. An appeal proceedings before them takes about 12 months to be completed.

Ireland Small Flag Ireland

Ireland has an independent statutory body, the Tax Appeals Commission (“TAC”), established for the purpose of hearing and determining disputes between taxpayers and the Irish Revenue Commissioners. Appeals from the TAC are taken to the High Court on a point of law but not on a factual matters so it is important to ensure that the correct factual matters are proven at the TAC level. Further appeals from the High Court may be taken to the Court of Appeal and ultimately to the Supreme Court and, should a point of EU law arise, any court or tribunal in Ireland has the authority to make a reference to the Court of Justice of the European Union for clarification of the relevant EU issue.

The first hearing of a tax dispute is held in the TAC. This is the successor body to the previous Appeals Commission. It has recently commenced operations so it is difficult to be definitive about timelines. All notices of assessment (the initial document in any appeals process issued by the Irish Revenue Commissioners) in respect of which a taxpayer files a notice of appeal are currently dealt with by the TAC. Appeals that were in being prior to the TAC coming into operation are subject to a process under which there is a mandatory consultation between Irish Revenue and the relevant taxpayer to determine where they could be settled.
Approximately 10% of those appeals have been settled and the remainder have been moved to the TAC. This has created a backlog and it is proposed to appoint temporary commissioners to clear this backlog. Accordingly, it is unclear how long it will take to have appeals heard at this level of tribunal.

France Small Flag France

Administrative courts have jurisdiction over most tax matters (to the exception of registration duties, for instance which are dealt with by the judicial courts). The first instance jurisdiction is the administrative court (“tribunal administratif”). Appeal lies with the administrative court of appeal (cour administrative d’appel). Finally, the Supreme Court (“Conseil d’Etat”) reviews the legal conformity of decisions by lower courts and doing so may, totally or partially, override a decision. The case is either settled by the Supreme Court (general case) or sent back for review by re-the administrative court of appeal.

As a general rule, it takes between 8 to 10 years to reach a settlement before the Supreme Court.

Australia Small Flag Australia

The first stage of formal review in relation to a ruling or an assessment by the ATO is generally an “objection”. This objection process is an internal review of the assessment or ruling decision by a separate group (Review and Dispute Resolution) within the ATO itself. If a taxpayer is dissatisfied with the outcome of the objection process, the taxpayer can appeal either to an administrative tribunal (the Administrative Appeals Tribunal (AAT)) or the Federal Court. These avenues of appeal are slightly different in their scope – an administrative tribunal is said to “stand in the shoes” of the original decision maker to “remake” that decision. The Federal Court, on the other hand, is more focussed on the legal issues and the legal tests that should have been adopted by that decision maker. In practical terms, both processes are legalistic in their proceedings including presentation of formal evidence (although there is often more latitude around in this in the AAT), representation by specialist advocates and witnesses presenting testimony (written and oral).

Neither process is especially quick and taxpayers should expect that the process will take 12 to 18 months. Of course, both decisions of the AAT and the Federal Court are subject to appeals and these appeals can extend the time frame for resolution of a dispute to many years.

State based taxes have a similar operation with a process of internal objection in relation to assessments and appeals to either administrative tribunals or the Supreme Court in each jurisdiction.

Switzerland Small Flag Switzerland

Tax disputes can be resolved administratively or judicially. Within the relevant cantonal tax authority and federal authority, the taxpayer can resolve tax disputes without litigation. If no settlement is reached, the taxpayer can dispute the tax in cantonal courts and federal courts independent from the tax authorities. Cases can be brought up to the Federal Supreme Court of Switzerland.

Updated: March 10, 2017