CFE Opinion Statement on the 2026 EU Rule of Law Reports
CFE Tax Advisers Europe has submitted an Opinion Statement in response to the European Commission’s public consultation on the 2026 Rule of Law Reports, highlighting growing rule-of-law challenges arising from the expansion of tax administration and enforcement powers.
CFE acknowledges the legitimate public policy objectives pursued through enhanced tax enforcement, AML measures and administrative cooperation at EU and Member State level. At the same time, the Opinion Statement highlights the growing rule-of-law challenges arising from the expansion of tax administration and enforcement powers, particularly in relation to access to taxpayer data, mandatory disclosures and cross-border information exchange. CFE stresses that such powers must be accompanied by effective safeguards and judicial remedies that function consistently across Member States in order to preserve legal certainty, proportionality and effective judicial protection.
The Statement refers to recent case law of the European Court of Human Rights, which confirms that tax enforcement falls fully within the scope of fundamental rights protection. In particular, the judgments in Latorre Atance v. Spain and Ferrieri and Bonassisa v. Italy underline that administrative efficiency cannot override requirements of coherent judicial reasoning, foreseeability, proportionality and effective judicial oversight. CFE notes that these judgments establish a clear European standard whereby tax authorities remain subject to meaningful rule-of-law constraints in the exercise of their powers.
Key Rule of Law Concerns Identified
CFE identifies a number of horizontal developments relevant to checks and balances and effective judicial protection. These include the rapid expansion of administrative enforcement powers without a corresponding evolution of procedural safeguards and remedies, especially in highly technical and data-driven areas of tax administration. From the perspective of cross-border operators and intermediaries, remedies are often fragmented, slow or formally available but practically ineffective, creating an imbalance where obligations and sanctions apply immediately while judicial review is delayed or lacks suspensive effect. This dynamic risks encouraging defensive compliance behaviour, undermining legal certainty and distorting the functioning of the Single Market.
The Opinion Statement also raises concerns regarding professional secrecy and legal privilege. Recent case law of the Court of Justice of the European Union confirms that the confidentiality of legal advice is a structural component of the rule of law, even in the context of tax enforcement and administrative cooperation. CFE highlights tensions between this jurisprudence and national practices that treat broad due diligence material as presumptively disclosable, potentially shifting the burden of protecting fundamental rights from the State to the taxpayer and increasing litigation risk.
Recommendations
CFE recommends that the Rule of Law Reports systematically assess whether Member States ensure, in tax and related administrative domains, clear and foreseeable legal bases limiting administrative discretion in practice, operational application of necessity and proportionality, effective data safeguards and independent oversight, and access to effective judicial review, including interim relief where fundamental rights are at stake.
CFE also calls for closer attention to the practical effectiveness of remedies, the timely implementation of national and Strasbourg judgments, and the independence and specialisation of tax courts. In addition, the Opinion highlights structural issues linked to tax audit culture and incentive structures that may compromise impartiality and public trust.
Conclusion
CFE considers that the EU Rule of Law cycle provides a unique opportunity to ensure that the expansion of tax enforcement powers is matched by a corresponding strengthening of safeguards, oversight and judicial control.
As tax administration becomes increasingly automated, data-intensive and cross-border, constitutional guarantees relating to legal certainty, proportionality, professional secrecy and effective judicial protection must remain central. Ensuring coherence between enforcement powers and fundamental rights protections is essential.
We invite you to read the Statement and remain available for any queries you may have.