Proportionality in Tax Disputes - Lithuanian Court Practice

Abstract

The principle of proportionality has been developed by the ECJ for many years now. It has been applied in various fields besides taxation. Its significance is illustrated by its inclusion in the text of the EU Treaty and the large number of cases at the ECJ applying it. Lithuanian courts are bound to apply the ECJ case-law in certain cases and sometimes even when no obligation exists the courts have a right to follow the ECJ reasoning when no domestic precedents exist. The significance of this principle is further enhanced by the accession of the EU to the European Convention on the Protection of Human Rights and Fundamental Freedoms. The European Court of Human Rights has been developing this principle and applying it as well . Hence, case-law of the ECHR has been given new importance. Therefore, it could be presumed that the Lithuanian courts dealing with tax disputes will increasingly rely on the developments in the application of the principle of proportionality in the ECJ and the ECHR. This also provides new opportunities for tax practitioners since wider application of internationally accepted principles and international case-law should facilitate better predictability of outcome of litigation and widen the selection of available arguments in court.