What is tax or tax law?

We explain what tax or tax law is, its history, principles and sources. In addition, what are taxes and what types exist.

What is tax or tax law?

Tax law or tax law is a branch of financial law dedicated to the study of the rules that establish and apply taxes or tributes. In other words, it is a question of the study of the tax power of the State , that is, of its mechanisms for obtaining income to finance public spending, that is, public investments for the common good.

Commonly, tax law is interested in the material (physical) or procedural (formal) aspects contemplated in the legal system of tax matters in a country. It also refers to the set of exceptions, penalties, protocols and specific provisions by which it administers the tax obligation each year.

In that sense, two different branches can be distinguished within tax law, which are:

• The material tax law , which deals with the legal norms that support the tax discipline of a nation.
• The formal tax law , which is interested in the series of steps and rules that the State must follow to settle the tax.

The difference between these two branches is flexible and is not strictly drawn, since both are part of the same legal and legal framework.

2. History of tax or tax law

Since ancient times, human beings have organized themselves in societies orchestrated by a central power. That power was occupied by the pharaoh, the king, the supreme priest or, later, the feudal lords or the Catholic Church itself.

In different ways, each one served to organize the community politically, socially and economically. That is why the ruler was always the recipient of the taxes or taxes that were collected, often in a forced and violent manner, on the masses of workers .

In ancient Egypt, for example, the tribute to Pharaoh was an obligation whose breach was punished fiercely. Subsequently, in the Roman Empire the tax was formally consolidated and the first and primitive forms of tax law emerged.

After the entrance to modernity and the construction of the democratic, secular and liberal republics of the West, the tribute passed to the State, administered by the government in office. At present it consists of capitals , no longer in species (portions of production) as in ancient times.

3. Principles of tax or tax law

Tax law is governed by the following general principles:

• Legality of the tax . Under the premise nullum tributum sine lege , that is, “there is no tax without law,” this principle states that taxes can only be ruled by a legally constituted power, that is, endowed with legitimacy and explicit authorization by the whole of the society. Similarly, it establishes that no tax may be established in such a way that it violates the law in the least.
• Mandatory tribute . As the name implies, this principle dictates that the tax is an obligation, from which no ordinary citizen is exempt, and does not depend on the individual’s willingness to pay. In that sense, the collective desire is imposed on the individual, to ensure compliance with the law. Exceptions to this principle will only be provided in the law that establishes it.
• Justice of the tribute . According to this principle, all the people that make up the society have the obligation to contribute to the maintenance of the same, through the tax strategies that the State dictates. Such contribution, however, must be given fairly, taking into account their respective income and capacities, so that the tax burden is distributed equally throughout society.
• Uniformity of the tribute . Protected by the notion of legal equality, this principle allows a certain “contributory inequality” that requires more contributions due to the same tax to those who earn the most within a society.
• Tax advertising . This principle states, in simple words, that tax matters must be public, that is, they should not have room for secrets or private management, but that everything must be given under the full gaze of others, to minimize the margins of corruption. and ensure compliance with the above principles.
• Certainty of the tribute . According to this principle, it is not enough for the law to create the tax, but it must also accompany it with all the necessary provisions for its regulation, control and implementation, thus ensuring that there is as much certainty as possible regarding its operation.
• Do not confiscate the tax . This principle is established to ensure that the State cannot attempt, through taxation, against private property. That is why it dictates that the tribute paid for a good or service cannot amount to the good or service all, since that would amount to its confiscation by the State.
• Collection economics . Although the State is able to create and administer taxes, according to this principle, it can do so only in order to guarantee its own existence and maintenance, not for enrichment purposes of any kind. For that reason, it will not be able to demand from citizens more than what is strictly necessary to continue functioning.

4. Sources of tax or tax law

The sources of tax law are generally limited to what is established by the Doctrine, that is, to the formal provisions contemplated in laws, regulations, decrees, international treaties and jurisprudence . All this within the legal framework established by the Magna Carta or National Constitution.

5. Taxes

We call taxes or tributes to a series of monetary obligations established by law , through which all citizens contribute to the maintenance of the State. This obligation is established by law in the legal system itself.

Its fulfillment can and should be exercised by the State, empowered by the law itself to exercise proportional punishment in the event that a citizen fails to comply. The purpose of these taxes is to guarantee the possibility of existence of the State and of the social pact that through its laws and decrees guarantees.

6. Types of taxes

Broadly speaking, taxes can be classified as:

• Taxes on income, benefits and capital , that is, amounts calculated from the non-salary income of citizens.
• Contributions to social security , which are portions of the salary of workers who are allocated to the Social Security System that exists in your country, which may be available in case of health emergencies or in the form of a retirement pension when the time comes.
• Taxes on labor , through which the State rates the owners of large businesses and companies .
• Taxes on property , calculated so that those possessing more goods than necessary contribute proportionally to the state.
• Taxes on goods and services , through which the State receives a portion of the money destined for a purchase, rental or commercial operation that is carried out.
• Other taxes , intended to assess certain conditions, events or partnerships.