The Taxing Powers of the European Union: A Legal Analysis of the Levying of EU Taxes

The European Union has the power to introduce an EU tax, intended as an unrequited, mandatory pecuniary contribution to the government, levied on individuals, companies or products rather than on Member States. Its essential elements are designed at the EU level, and its goal is, at least in part, to raise revenues that contribute, at least partially, to the EU budget. The legal basis for introducing an EU tax with the primary goal of raising revenues for the EU budget is article 311 of the TFEU. However, if an EU tax has more than one equally relevant goal, a supporting legal basis is required. The types of revenue suitable for becoming EU own resources are tested against three criteria: proportionality, allocation and efficiency. Performing positively from the perspective of one criterion does not necessarily entail similar results for the other criteria. The EU’s general principle of equality constrains the design of an EU tax differently, depending on whether its primary purpose is raising revenues or achieving parallel goals. In the first case, there must be an objective justification for treating competing products or producers differently. In the second case, comparability is assessed in light of the broader objectives of the provision, allowing for greater flexibility in permitting discrimination.