Improving the Legitimacy of Soft Law in EU Tax Law

The European institutions strive for more open and informal governance. The use of soft law is part of the new legislative policy, often also with a view to establishing closer cooperation or even harmonisation of direct taxation between the Member States in a non-binding way. The Code of Conduct for Business Taxation is a well-known soft law instrument in European tax law. The not legally binding Code defines harmful tax measures. The Code is generally regarded to be an effective political instrument, relying on peer pressure for its effectiveness. However, there is more convergence in concepts, beliefs and norms and (to some extent) EU-level decisions than in domestic implementation and policy results. The Code, therefore, does not score well in terms of effectiveness. The same goes for legitimacy and transparency. Member States are involved, not civil society. Here, accountability, transparency, and publicity are important values to be observed in order to improve the responsiveness of this kind of regulation