The Importance of Case Law in Building a Fairer Tax System

Mr. Editor,

In light of Financial Literacy Month, I feel compelled to contribute to raising public awareness of how our tax system in Sint Maarten operates. As a tax lawyer, I assist taxpayers across the Dutch Caribbean in navigating the diverse tax codes applicable in each of the six jurisdictions. My role is to interpret and apply these rules in the best interest of those I represent.

My toolkit includes the original texts of tax ordinances, as well as policy documents and ministerial decrees issued over the years in each territory. Building this toolkit requires ongoing effort: digging through official gazettes, staying current with legislative changes, and, importantly, keeping an eye on jurisprudence (case law).

Yet case law remains one of the most underutilized tools in our local tax practice. Relevant rulings from tax courts across the Dutch Kingdom, and sometimes from comparable administrative law courts, are essential in shaping both legal interpretation and taxpayer rights. In negotiations or disputes with tax authorities – whether with the Tax Inspector, who levies assessments, or the Receiver’s Office, which collects them, a solid command of applicable case law can make all the difference.

While in our local communities the taxpayers would expect all accountants and financial advisors to stay informed of the latest developments in taxation, the reality is that few tax practitioners have direct access or take the time to study these decisions. Not only is finding the right judgment on platforms such as www.rechtspraak.nl time-consuming, but understanding a judge’s reasoning also requires a firm grasp of Dutch tax law, something not commonly taught in business school or acquired through corporate experience. Instead, obtaining the required understanding of the correct tax reasoning often requires in-depth study at university level.

To illustrate the real-world importance of case law, please allow me to share a recent judgment from the Tax Court in Sint Maarten. This case primarily dealt with a Turnover Tax (TOT) dispute. However, what stood out to me, and what I believe is of broader relevance, is that the judge took the opportunity to address procedural fairness and the duties of the Tax Administration when a taxpayer makes procedural errors in good faith.

This caught my attention not only as a tax lawyer, but because in my day-to-day practice, I often see taxpayers lose their case, not on substance, but due to technical mistakes in following procedure before they reached out to me. Unfortunately, the law gives little room for flexibility. In many instances, I’ve had to tell clients that I could no longer help them because a deadline was missed or a formal rule wasn’t followed, regardless of how justified their underlying position was.

In this case, the taxpayer had responded via email to a tax auditor regarding preliminary audit findings. The taxpayer explicitly disagreed with the auditor’s conclusions and clearly stated their intention to formally contest any resulting tax assessments. They also asked for guidance on how to proceed, in case the recipient of the email was not the correct contact person.

During further handling of the case, the Tax Inspector claimed that the protest was inadmissible due to non-compliance with procedural rules. Indeed, the taxpayer had not followed the proper steps and their objections were not communicated to the Tax Inspector, but to the auditor. However, the judge took a more nuanced view. While formal procedures are critical in tax law, the judge also considered the taxpayer’s clear intention to protest, their timely response, and their written request for guidance.

This is where the principles of good governance (in Dutch: “algemene beginselen van behoorlijk bestuur”) come into play. These principles apply to all government bodies making decisions that affect citizens’ legal rights, including tax authorities. The judge explained that: “When the tax authorities receive an objection that was sent to the wrong department, they are expected to forward it internally to the correct department. Moreover, under basic principles of good administration, they should contact the taxpayer to explain the issue and provide a fair opportunity to correct any procedural misstep.”

In other words, tax officers must not merely dismiss taxpayers on technicalities when a genuine effort has been made to comply. If the taxpayer’s intention is clear and the error is procedural, the tax office should either forward the objection internally or inform the taxpayer of the proper steps, allowing time to fix the mistake.

It is unlikely that the Tax Inspector expected this outcome. But litigation plays a key role in improving our tax system. Had the taxpayer failed to act quickly and clearly, the court likely would have ruled the protest inadmissible, as many courts have in the past. Instead, this decision sets a precedent and reminds us that the tax authority shares responsibility in facilitating a fair process, especially when dealing with taxpayers unfamiliar with legal procedures.

This ruling does more than resolve a single dispute, it helps define the tax system’s contours in Sint Maarten and the other Dutch Caribbean territories. It is my hope that readers will draw from this case the right lessons: be prompt, be clear, and document everything when dealing with the Tax Administration. But also remember that the Tax Office is not above basic rules of fairness embedded in administrative law.

To the untrained eye, the outcome may seem like common sense. But under the strict formalities of our tax system, the law could easily have been used to deny the taxpayer their right to be heard. That is why this judgment matters – and why staying informed about case law is not a luxury for tax advisors, but a necessity.

Quincy Lont, LL.M.