‘Spirit of the Law’ for Non-Believers: Tax Avoidance and (Legal) Philosophy

‘Tax avoidance is a taxpayer’s course of action in line with the letter but contrary to the spirit of the law’. Definitions phrased along these lines can be found in many policy statements and legal provisions. They are common, but nonetheless problematic. It is the ‘spirit of the law’ part which poses problems. These difficulties not only have theoretical import; they also cast doubt on the legitimacy of efforts to combat tax avoidance. And the skeptics – ‘non-believers’ in the spirit of the law – are many. In this paper I address four challenges arising in connection with this, allegedly obscure, expression. These challenges mirror the objections commonly raised against it in theory and practice. In the first part, I outline the concept behind the expression ‘spirit of the law’. In the second part I discuss the relation holding between the spirit of the law and the law itself. In the third part I touch upon the question of whether the spirit of the law is legislator’s intention. Finally, in the fourth part, I briefly examine the issue of the authority entitled to establish the spirit of the law. The purpose of the considerations included in this paper is to show that (i) the term ‘spirit of the law’ and the corresponding concept are meaningful and (ii) they are plausibly operational in legal practice (it is plausible that they can be fruitfully used in it).