Principles Of Tax Law Research Articles

Digital Transformation of Tax Law Principles

Objective: to search for conceptual issues, features and prospects of development of tax law principles and tax obligation institute in the context of modern digitalization trends.Methods: the study is based on a set of general legal (analysis and synthesis, induction and deduction) and special-legal (formal-legal, comparativelegal) methods of cognition.Results: the main features of tax law principles characterizing their digital development were defined, namely: the expansion of the list of such principles and the changes in their content, predominantly at the level of institutional principles of taxation. A conclusion is made that in the digital era the tax law principles retain their theoretical significance as the most important category of the relevant science. The author states that the digital transformation of the institutional principle of tax fulfillment independence takes place mainly in the following directions: firstly, the range of taxpayers is expanded, in respect of which the duty to calculate tax can be imposed on a tax authority; secondly, the mechanism of the tax obligation execution is changed, among other things, by increasing the tax obligations of state authorities and credit organizations.Scientific novelty: the paper assesses the approaches used in the scientific literature and normative-legal framework related to transformation of the taxation principles due to the intensive use of information and communication technologies in tax relations. The author also analyzed the digital transformation of the principles of tax obligation as one of the main tax-legal institutions.Practical significance: is due to the lagging pace of tax legislation development in the Russian Federation compared to the objective processes of creation and application of new information and communication technologies in tax relations and adjacent spheres. The main provisions and conclusions of the study can be used as a basis to improve the tax legislation, as they develop knowledge about new tax law institutions – professional income tax, tax monitoring, single tax payment, and automated simplified taxation system.

Interrelationship of tax liability with the principles of tax law

The article examines the relationship between tax liability and the principles of tax law in the current legislation and regulatory requirements of the European Union. The object of research is social relations that regulate the emergence, change, fulfillment, termination of tax liability in the context of the principles of tax law. The subject of the research is the norms of the Constitution of Ukraine, current tax legislation and other normative acts. During the research, various methods were used, in particular: historical-legal, systematic, comparative-legal, formal-legal, teleological, general scientific methods: analysis, synthesis, induction, deduction. It is indicated that the tax liability is the taxpayer's duty to pay the state a certain amount, which the taxpayer independently calculates and reflects in the tax return. It is noted that the principles of tax law and the principles of tax liability and taxation are mutually related and are reflected in regulatory acts of tax legislation or other regulatory documents. The Tax Code of Ukraine specifies the following principles: universality of taxation; equality of payers before the law, inevitability of liability; presumption of legality of the taxpayer's decisions: fiscal sufficiency; social justice; neutrality of taxation; stability; uniformity and convenience of payment; a unified approach to setting taxes and fees. Separate principles are defined in the Constitution of Ukraine - the principles of rule of law, legality, etc. The legal principle of the economy of taxation is manifested in the requirement for the economic basis of income taxation. In the tax law of the countries of the European Union, the presumption of legality of the taxpayer's decisions is expressed through the rules on the inadmissibility of various forms of tax abuse, which have a codified status. The development of these principles in the tax law of the member states of the European Union has recently taken place in the form of determining the criteria for the application of scientific doctrines in model taxation situations, based on specific court decisions in cases on determining the amount of tax liability.

Burden of Proof or the Principle of Cooperation in Granting Tax Relief? Commentary on the Judgment of the Supreme Administrative Court of the Republic of Poland of 14 September 2022, III FSK 538/22

Abstract The purpose of this commentary on the judgment of the Supreme Administrative Court (SAC) mentioned in the title is to present the relationship between the tax authority and the taxpayer seeking relief from a tax liability. The literature and court rulings, the most recent example of which is the SAC ruling under review, indicate that it is the taxpayer who bears the burden of proving that the prerequisites for granting tax relief are present, namely an important interest of the taxpayer or the public interest. The institution of the burden of proof, characteristic of civil proceedings, should not be transferred to tax proceedings, where it is the statutory duty of the tax authority to clarify all the circumstances of the case. This does not mean that the taxpayer should not point out to the tax authority all the circumstances supporting the granting of relief. However, this does not follow from the fact that the taxpayer, as the applicant, bears the burden (obligation) of proving the existence of the prerequisites. There are and should be no provisions in the Tax Code imposing such an obligation. The taxpayer should submit any evidence justifying the relief in compliance with the principle of cooperation between the taxpayer and the tax authority. This is one of the general principles of tax law found in the literature and court decisions and boils down to the fact that the taxpayer is obliged to cooperate with the authority in charge of the procedure for granting the tax relief requested by the taxpayer. This principle, like many other general principles of tax law, should be inscribed in the current Tax Code, as has long been advocated in the literature.

Interpretation of tax law in cases involving commercial entities: Opportunities to exchange best practices in the area of corporate social responsibility regulation

The article aims to develop a correct understanding of the essence and implications of the basic principles and legal provisions governing tax matters, as well as to form an insight into their evolutionary transformations on the basis of the exchange of relevant best practices between Ukraine and other countries. Relying on methods of comparative review, as well as methods of systematic review and standard techniques of text analysis, the author covers theoretical and practical issues related to the balanced combination of literal and intentional interpretation of tax legislation provisions, in dubio pro tributario in the interpretation of tax laws and question of reasonable cause and good faith of taxpayers. It is noted, in particular, that common law countries and continental legal systems are united by a tendency towards a balanced combination of literal and purposive interpretation. It is emphasized in the conclusions that, along with the literal wording of tax law provisions, the purpose of their introduction and the general principles of tax law are taken into account. Moreover, in some countries, reference to the intention of the legislators is even allowed.

Establishment and Observance of Tax Law Principles as a Factor in Protecting the Rights and Legitimate Interests of Taxpayers

The article is devoted to the analysis of the problems of legal regulation of tax law principles. The author draws attention to the fact that the principles should serve not only as a guideline for the legislation development in the tax sphere. The taxpayers’ rights and legitimate interests will be protected only in case of strict compliance with the established taxation principles. The author emphasizes the analysis of compliance with the principle of taking into account the actual ability of the taxpayer to pay tax. It is indicated that the presence of a taxable object does not always indicate the actual ability to pay tax. It is established that the correlation of the factor’s absence is possible through the establishment of social tax benefits. Attention is paid to the characterization of violations of the principle of tax certainty from the insufficient legal regulation to its redundancy, which leads to use of complex legal structures that are difficult for understanding. The principle of interpretation of all irremediable doubts, contradictions and ambiguities of legislative acts on taxes and fees in favor of the taxpayer, its possible violations is investigated. The conducted research allowed to come to the conclusion that the basic principles of taxation should not be declarative, they should be reflected and developed in other norms of legislation on taxes and fees.

Countries Wishing to Reform Their Tax System Must Be Sure That Their Proposals Follow Both International Trade Law Principles and International Tax Law Principles

Countries Wishing to Reform Their Tax System Must Be Sure That Their Proposals Follow Both International Trade Law Principles and International Tax Law Principles

Legal Implication on Supreme Court Decision that Conclude Contract of Work has a Lex Specialis Principle from the Local Taxes and Retributions Act 2009 towards Local Government Finance

The Contract of Work between the Government of Indonesia and mining companies has the nailed down tax obligations, which means that the mining companies only pay taxes that are stipulated at the time when the Contract of Work was signed. A legal issue arose when the Local Taxes and Retributions was enacted in 2009 which did not exclude Contract of Work mining companies from imposing local taxes. In several provinces, the tax dispute arose when the Local Government imposed local taxes on the mining companies under the Contract of Work based on the Local Taxes and Retributions Act. The pattern of dispute settlement process from those issues was carried out until the case review process by the Supreme Court. The decision on the case review stated that the Contract of Work was valid as a lex specialis of the Local Taxes and Retributions Act with consideration: there was a recommendation from the House of Representatives in the formation of a Contract of Work and the Letter of the Minister of Finance No. 1032/MK.04/1988. The method that will be used in this study is the normative juridical method, referring to written legal materials in the form of primary, secondary, and tertiary legal materials which are specifically related to local taxes and absolute tax theory. The result of this research concluded that the Supreme Court decision was not conformable with tax law principles and absolute tax theory. Furthermore, considering the erga omnes principle of the Administrative Court System that the Tax Court is beneath the scope, the decision implies the other local government that cannot collect local taxes from mining companies under Contract of Work.

The principle of VAT neutrality: content and relationship with tax legislation

The subject. The principle of VAT neutrality is actual for Russia as VAT is one of the taxes levied in Russia. The principle of VAT neutrality has been upheld by the Russian Supreme Court. Therefore, the subject of the research is the definition of this principle as well as the problems of its relationship with the Russian tax law.Purpose of the study. The article considers the principle of value added tax neutrality as an independent principle of tax law, analyzes its content and regulatory role as independent means of legal regulation. Dealing with foreign doctrine regarding to the referred principle, the article shows the problems of its implementation in Russia and includes suggestions re its harmonization with the Russian tax legislation.Methodology. The author uses the formally legal interpretation of the legal provisions, comparative analysis of Russian and European literature as regards the nature and neutrality principle of VAT as well as the systemic analysis.The main results. The author has formulated the definition of the principle of VAT neutrality and determined the elements of the referred principle. Each element of the principle has been described. The author divided the content of the referred principle on property, legal, economic and competitive elements. However, all these elements should be considered systemically as VAT is supposed to be neutral for businesses in terms of each sphere of their business activity. The author concluded that VAT is the tax on consumption and the burden of this tax should be transferred on final consumers. Taxable persons are only public agents to collect VAT after taxable transactions with final consumers. Therefore, there should be no obstacles as regards the right to deduct input VAT as well as any rules distinguishing the tax burden for similar taxable transactions. Also, due to the deduction mechanism the burden of VAT in the same price of goods (services, work) should be equal and does not depend on the quantity of transactions to be previous to the sale to any final consumer. As regards the Russian tax legislation, the author identified the rules infringing the principle of VAT neutrality. Thus, the author has concluded that the Russian tax rules establishing strict documentary requirements to the right to deduct input VAT and limiting this right for foreign businesses contradict the principle of VAT neutrality. Also, the rules of the Russian Tax Code which stipulate the exemptions for the transactions between taxable persons and the different tax rates for the similar transactions as well as exclude the persons of the special tax schemes from VAT regime are not in line with referred principle.Conclusions. According to the results of the study, the author has formulated the suggestions regarding to the amendments to the tax legislation in order to correct the revealed mismatches between the provisions of the chapter 21 of the Russian Tax Code and the principle of VAT neutrality. It is proposed to reduce the requirements to the right to deduct as well as exclude the current limitation of this right for foreign businesses, the different tax rates for the similar transactions and the exemptions for the transactions between taxable persons. In addition, the author has suggested to entitle the persons of the special tax schemes to refuse their excluding from VAT regime.

The legal nature of the evaluative concepts of "justice", "good conscience" and "reasonableness" in the Tax Code of Ukraine

The article is devoted to the research of the aspect to be discussed of, the updated during the last few years, doctrinal legal tools of the Tax Code of Ukraine in order to eliminate gaps in regulation of tax relations and strengthening the certainty of tax law.Any right only seeks legal certainty, but in fact, to a large extent a priori remains uncertain in the strict sense of the word. It is so due to, primarily and mainly, the irresistible procedural nature of all social relations including relations on taxation.The specific purpose of the study is the attempt to analyze legal nature of evaluative concepts of justice, good conscience and reasonableness in the Tax Code of Ukraine. Anthroposocial and cultural approach, primarily axiological, historical and comparative legal methods, as its components, were used as methodological tools. According to the results of the study a number of conclusions are substantiated. In particular, it was clarified that the Tax Code of Ukraine is not yet characterized by a broad and systemic application of the evaluative concepts of justice, good conscience and reasonableness. In cases when they are used in it, the domestic legislator has invested in these concepts the content radically different from what is generally accepted in the European legal space, or even used these concepts as antonyms (dishonesty, unreasonableness) or synonyms (rational).At the same time, the tendency to the actual use of the aforementioned valuation concepts as principles of tax law has already become apparent. As the nature of the tax is common to all societies and Ukraine has stated its intention to integrate into the EU, there is a need to implement into the Tax Code of Ukraine the approaches to the application of evaluative concepts such as fairness, good conscience and reasonableness, inherent in their application in the European legal space of Ukraine - as legitimate principles of tax law of Ukraine. It became obvious that the title of Article 4 of the Tax Code of Ukraine should be changed from “Basic Principles of Tax Legislation of Ukraine” to “Principles of Tax Law of Ukraine” and state these principles on worldviews and methodological approaches, inherent in the European public space.

Poreske olakšice za zapošljavanje novonastanjenih lica

The paper analyzes the tax relief for employment of new residents. In the first two parts, there is a legal analysis of Art. 15c of the Law on Personal Income Tax and Art. 15a of the Law on Contributions for Mandatory Social Insurance. Then, this tax relief will be examined in the context of the principles of tax law and public finance, especially the principle of tax fairness, the principle of tax efficiency and the principle of the stability of the tax system. The conclusion is that the problem of the outflow of highly skilled workers could not be solved by partial reforms of tax laws. A systematic solution implies a radical reform of the personal income tax, which would be firmly based on the principles of tax law and tax science.

Country Note: Arm’s Length Principle from a Swiss Perspective: Profit Allocation to Inbound and Outbound Permanent Establishments

Switzerland continues to be one of the most preferred locations for many businesses when setting up a headquarters or permanent establishment (PE) structures. Thus, obtaining tax certainty and predictability is crucial for such structures. Swiss tax law does not provide for detailed rules for international profit allocation and particularly the arm’s length principle (ALP) for the determination of an enterprise’s profit. Therefore, the Swiss tax authorities and courts largely rely on general national tax law principles for their assessment of the allocation and calculation of the taxable profit of a company or a PE in Switzerland. They have developed a sophisticated system of profit correction in order to determine the relevant taxation basis, in particular when prices between related entities or within PE relationships are deemed to not be set at arm’s length. This practice is continuously evolving, and the Authorized OECD Approach (AOA) is increasingly integrated in the assessment of each individual case. Against this backdrop, the present contribution discusses the application of the ALP from a Swiss tax treaty and Swiss national law perspective as applicable to transactions among separate entities as well as to head office and PE relations. With respect to the latter, the reader will find an overview of the profit allocation rules applicable in domestic and international cases. Moreover, for illustration, two case studies are developed and analysed for cross-border relations with fixed place PEs (inbound and outbound cases) and an example is provided for the interaction between international and domestic profit allocation. Switzerland, profit allocation, AOA, permanent establishment, arm’s length principle, transfer pricing, international, intercantonal, developments, cases.

The Contemporary Significance of the Principle of Proportionality in Tax Law

Abstract The principle of proportionality plays a key role in shaping the principles of the tax law system, as it is an important element in the protection of taxpayer’s rights. The interpretation directive related to the principle of proportionality has a doctrinal, normative, and jurisprudential character. It is an EU and constitutional standard and should become a rule used on a daily basis in the practice of tax authorities. As a general principle of tax law, it is addressed to the legislative, executive, and judicial authorities. The article analyses the case law of the CJEU, the Constitutional Tribunal and the Supreme Administrative Court, which leads to the following conclusions. The CJEU quite often refers to the principle of proportionality in its jurisprudence and has developed a jurisprudence doctrine based on the doctrine of law. The Constitutional Tribunal, although in a limited scope, also employs the principle of proportionality. In disputes between tax authorities and taxpayers, Polish administrative courts apply the principle of proportionality using a pro-EU and pro-constitutional interpretation.

Abuse of the Rights of the Taxpayer

Statement of a problem. The design of abuse of law, first developed for the sphere of private law, was further transferred to the sphere of public law. But this does not make it possible to equate abuse of law in private and public relations. There is a fundamental difference between them due to the nature of the regulated relations, the specificity of the methods of legal regulation. The process of shaping and developing perceptions of the possibility of abuse of rights in the field of taxation has gone through a complex, contradictory path of development. Initially, the Constitutional Court of the Russian Federation effectively recognized that the category «abuse of the right» did not apply to taxpayers. However, the need to find a balance between public and private interests required the development of fundamentally new approaches, naturally derived from the content of general and special principles of tax law. The aim and objectives of the study is to carry out a systematic analysis of the peculiarities of taxpayers» abuse of their subjective rights. Methods. Methods of knowledge of legal reality are used general (dialectic), general scientific (the analysis, synthesis, classification, generalization, the description) and private and scientific (legallistic, interpretation methods) when carrying out a research. Conclusions. Abuse of tax law is a particular form of tax offences. Unlike the offences of the classical kind, its wrongfulness, the public danger is veiled as the subject tries to take his behavior into legal form. Abuse of the law in the field of taxation is an illegal socially dangerous act of the taxpayer, in the sense that the person, based solely on his own interests, deliberately goes beyond the limits of a legally defined measure of possible behavior, while unduly reducing the measure of his proper behavior and the measure of possible behavior of other participants in tax legal relations. The courts, given the nature of the abuse committed, may deny a person the protection of his subjective right in whole or in part; Oblige a person to comply with his or her tax obligation; To decide on compensation for the damage caused to the public interest in the form of an accrual and recovery of penalties for late payment of fiscal payments and tax sanctions – fines for improper performance of public legal obligations in the field of taxation.

The rule of law as a fundamental principle of the concept of legal regulation of tax security of Ukraine

The article is devoted to the analytical review of the scientific works of scientists concerning the rational structuring and improving of principles of the tax system. The authors focus on the ambiguity of the views of scientists from other countries on the place and role of individual tax principles as the components of the tax system. The issue of improvement of the tax law system and its rational structuring of principles in Ukraine continues to be relevant. The role of the principles of tax law since Ukraine's independence as part of the Ukrainian legal system, has increased in modern life in terms of absolute performance. The authors of this article focus on the ambiguity of the views of scientists from other countries on the place and role of individual tax principles as the components of the tax system. The background of this research caused on the urgent need to identify the specificities of scientific views of scientists from other countries on tax principles. The research objective is to improve the hierarchical structure of modern Ukrainian system of taxation principles. The results of the analysis of scientific literature from other countries on issues of studies the tax principles are indicating the declarative character of enshrined in the Tax Code of Ukraine principles of tax law. The essence of these 11 principles of tax law is a direct continuation of tax principles of scientists from other countries. However, the practical application of enshrined in the General Part of the Tax Code of Ukraine principles of tax law is problematic in conjunction with the implementation of regulations of the Special Part of this Tax Code.

Принцип справедливости налогообложения с позиций налогового суверенитета и народовластия

The principle of justice is the principle of the entire system of law. The principle of fair taxation is the one of the basic principles of tax law. It is crucial question to find out the content of this principle. To author opinion there is public justice taxation but not individual fair taxation. That is to say, the taxation is unfair for individual sometime but it is fair taxation for social purposes. The public fair taxation principle is based on the tax sovereignty and it is generated by democracy. The article discusses the difference in the content of this principle in different states. For example it can be find out from different approaches of states to the progressive taxation question.

Legal regulation of financial control over the activities of business entities

Problem setting. In the context of the ongoing European integration processes, the issue of creating a modern, optimal and effective system of measures of state financial control over the activities of economic entities is becoming increasingly important for Ukraine. First of all, it is necessary to clearly and coherently regulate public financial control, in particular, its types, methods, forms, procedures, as well as the legal status of public financial control in order to prevent violations of financial legislation by economic entities and promote harmonization of the national economy. with the economic systems of other developed countries. Analysis of recent research. Some problems of legal regulation of state financial control have been studied by such scientists as: L. Voronova, O. Grachova, O. Dmytryk, M. Kucheryavenko, T. Latkovska, O. Semchyk etc. At the same time, as we have already noted, the imperfection of legislative regulation (the presence of conflicts and gaps in the regulation of public financial control), the imperfection of the system of public financial control and other factors necessitate further research and proposals for improving existing legislation. in this area. Thus, the purpose of this article is to analyze the current state of legal regulation of public financial control in Ukraine. Article’s main body. The article considers the legal regulation of financial control over the activities of economic entities in Ukraine. The need to improve the current legislation in the field of financial control was emphasized. It was emphasized that the legislator now prohibits tax audits for all taxpayers, regardless of their division into large, small and medium. Excluding large taxpayers from the list of taxpayers covered by the moratorium during the quarantine period without available grounds, in fact, violates the principles of tax law. Conclusions. It is emphasized that the relationship between business entities and regulatory authorities should be as flexible as possible and implemented in the form of public-private partnership. It is proposed to amend Art. 26 of the Budget Code of Ukraine and to consolidate the definition of “control over compliance with budget legislation”, as well as to determine the forms (methods) of its implementation.

EL FRAUDE A LA LEY FISCAL EN EL DERECHO TRIBUTARIO URUGUAYO

Fraud against tax laws is addressed, mainly as a possibility to achieve, by means of the taxable event, certain acts and transactions that, without being set forth under such tax laws, have the same material foundation as provided for therein. The concept of fraud against the law within the scope of private law as well as structural elements thereof are examined, in addition to its differences in comparison to other concepts that also include fraud, such as fraudulent conveyance and disregard. The evolution of the handling of acts and transactions in our tax law is studied, as well as the differences with the mechanisms to control fraudulent acts, such as economic interpretation and teleological interpretation, which extend, by analogy, the taxable event , and generic anti-avoidance regulations, which redirect such act or transaction to a taxed form. The admissibility of a concept of tax law fraud is assessed, which, based on a conclusive interpretation, proposes a concept of wrongfulness based on the violation of tax law principles. Finally, the use of substantive tax law towards acts or transactions compliant with the law’s wording, but not its meaning, that seek to avoid any taxable event is reviewed.

ПРОБЛЕМИ РЕФОРМУВАННЯ ФІСКАЛЬНО-ПОДАТКОВОЇ СИСТЕМИ УКРАЇНИ У КОНТЕКСТІ ДЕОФШОРИЗАЦІЇ

The peculiarities of implementation of the Minimum Standard of the BEPS Action Plan in Ukraine, the MLI Multilateral Convention, which provides for separate actions of the BEPS Action Plan, taxation rules of controlled foreign companies (CFC) as well as rules for automatic exchange of information under the CRS standard, are investigated. It was found that rising the effectiveness of existing Ukrainian fiscal-tax system according the de-offshorization of the national economy, double tax treaties with offshore jurisdictions is only possible under the OECD criteria for information transparency of the Ukrainian tax system. The article analyzes the implementation of the concept of CFC into national legislation in connection with the objective need to eliminate the negative consequences of using business offshore schemes. The relationship between national tax and international tax law principles is analyzed on the basis of the ratio of CFC rules, both to the provisions of international tax agreements and to the norms of international legal restrictions. The levels of development of national tax and financial instruments were determined on the basis of international methodological and regulatory approaches to determining the balance between liberalization of national capital markets and systemic financial risks, between optimizing the economic tools for controlling taxation of residents and attracting foreign investors and capital owners, are investigated too. The article analyzes the conditions under which the CFCs are exempt from profit taxation when double taxation treaties are concluding, ensuring timely and complete exchange of tax and financial information between the national fiscal departments. The ways that Ukrainian companies use in low tax zones to restructure their businesses and protect their assets that are not declared in Ukraine are identified. It is about the endorsement by Ukraine of the double taxation treaties for «double tax evasion» (in fact, they do not pay taxes in any of the jurisdictions). The peculiarities of the implementation of the CFC rules as a fiscal component (budget replenishment) and as a regulatory tool to protect and encourage inward investment are investigated separately. Particular attention was paid to the problem of ensuring business security in the context of confidentiality and protection of information while sharing it with other countries in the process of implementing the BEPS plan. It is proved that today the new standards of compliance with the requirements of financial motivate Ukrainian beneficiaries of foreign companies to conduct business under more transparent rules (including the protection of confidentiality of the received information), identify and strengthen weaknesses of business models.

The Legal Nature of the Tax Doctrine of Ukraine

Tax changes in the state are impossible without the influence of such a phenomenon as tax-legal doctrine. This concept is mentioned in numerous national scientific works, but a special study of this phenomenon is absent in the science of tax law of Ukraine. Therefore, the article is devoted to the study of the tax-legal doctrine of Ukraine. The article provides a comprehensive analysis of scientific concepts of legal doctrine and tax-legal doctrine in particular. The author analyzes the impact of tax-legal doctrine on tax practice. The article deals with judicial tax doctrines, which is another factor that can help protect the rights of taxpayers. Considerable attention is paid to the nature of the tax-legal doctrine of Ukraine. Anthroposocialcultural nature of the doctrine of tax law is explored in the article. In addition, an analysis of the dominance in the tax-legal doctrine of Ukraine of the etatists principles of tax law was conducted.

Relations on Taxes Imposition as General Regulatory Tax Relations

In the paper the author attempts to define the legal nature of relations regarding establishment and introduction of taxes and fees in the Russian Federation. The author refutes the traditional ideas about the absolute model of such legal relations, as the alleged circle of obligated persons does not have the potential to prevent implementation of the sovereign right of the authorized party. It is concluded that relations concerning the imposition of taxes amount to general regulatory relations with broader legal relations, where the right of the authorized person corresponds to the legal status manifesting connectedness, dependence of the opposing subject as the actions of the authorized entity inevitably affect his or her interest. The author identifies the subjects (participants) in such relations and analyzes the peculiarity of their interaction that is manifested in a bilateral (mutual) legal relationship. The paper demonstrates the rights-obligations status of the participants of such relations through direct and reverse legal relations. The State acts not only as a holder of power, but also as the main guarantor of the rights and legitimate interests of all citizens. The article scrutinizes the content of the legitimate interest of the taxpayer based on the fundamental principles of tax law and determining the lawmaker’s behavior.Based on the analysis of the legal relationship between a public law entity and the taxpayer, the author outlines the boundaries of discretionary powers and criteria of discretion of the legislator in the process of imposition of taxes. The tools of reasonable deterrence of fiscal appetite include legal requirements, as well as constitutional and legal justification of legislative decisions.The author emphasizes the importance of active involvement of the taxpayer in the process of regulatory control of legislative provisions.