The CJEU and the internal market concept in direct taxation

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review


From the ever-growing body of case law of the Court of Justice of the European Union (CJEU), it is clear that primary European law sets limits to Member States’ domestic tax law and tax treaty law. In this context, the Treaty on the European Union (TEU) and especially the fundamental freedoms included in the Treaty on the Functioning of the European Union (TFEU), restrict the Member States’ competence to make, interpret, and apply their direct tax laws and tax treaties. The role of the CJEU as highest interpreter of EU law is an essential element in the organization of the European Union (EU).

One of the aims of the EU is to establish an internal market. The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties.

The research question of this chapter is, therefore:
What is and what should be the role of the CJEU in establishing the EU’s internal market in direct tax matters?

In this context, the author will analyse existing jurisprudence, identify recent trends and investigate potential future developments in selected areas. It is obvious that, in the context of this chapter, a selection must be made. It is not possible to comprehensively cover the field of direct taxation. It is simply too extensive. Therefore, the author will discuss three of the main issues in the field of direct taxation. They potentially have a great impact on the establishment of the internal market. Furthermore, for at least two of the areas, the CJEU has developed an extensive body of case law. The three selected issues are: (1) personal and family circumstances, (2) tax treaty override, and (3) exit and final settlement taxes.

In order to be able to deliver a reasoned answer to the research question, a benchmark will be first developed. This benchmark will be used to assess the Court’s case law and as a basis on which to make suggestions for improvement, if necessary. After having developed the benchmark, the author will discuss, in more detail, the role of the CJEU in relation to the internal market in the context of direct taxation. Subsequently, the author will discuss the role of the CJEU in the context of developing the internal market with respect to the three issues mentioned above. With respect to personal and family circumstances, the author will discuss the Schumacker doctrine. With respect to tax treaty override, the author will address the pre- and post-Lisbon era. Finally, with respect to exit and settlement taxes, the author will review developments from De Lasteyrie to Commission v Portugal 2016. The author will end with some main conclusions and recommendations.
Original languageEnglish
Title of host publicationEU Tax Law and Policy in the 21st Century
Place of PublicationAlphen aan de Rijn, The Netherlands
PublisherKluwer Law International
ISBN (Electronic)9789041188168
ISBN (Print)9789041188151
Publication statusPublished - 2017


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