The Court of Justice of the European Union (further “CJEU”) assesses the compatibility of national tax provisions with the fundamental freedoms. The assessment normally consists of different steps. The first step is to determine if the national legislation constitutes a restriction. The second step is to determine if the restriction can be justified. Preserving a balanced allocation of taxing powers between the Member States is one of the grounds of justification that have been developed through the CJEU’s case law. The argument has been used frequently but is also debated since it has not appeared obvious how it may be relied upon. The purpose of this thesis has therefore been to analyse the case law of the CJEU when this ground of justification has been invoked in order to define a coherent concept of when the ground can be relied upon, how it can be distinguished from other grounds of justification, and how the reasoning of the Court has developed over time. The analysis was made of the case law up until this date which was divided into different categories of cases. Conclusions that can be made after this analysis are that this justification ground can be relied upon in situations when a Member State’s taxing power over profits generated in its territory is being jeopardised, both as the residence state and the source state. The reasoning of the Court differs a bit from the different categories of cases, but a common element is that weight is put on if the taxpayer can move the tax base freely which would result in the Member State being obliged to renounce its taxing power. Moreover, in many of the cases examined different grounds of justification have been relied upon together with this one. However, a conclusion is that a balanced allocation of taxing power can be relied upon as a sole ground of justification. When invoked together with other grounds it serves as the foundation of the justification test and it seems rather clear that the other grounds are unnecessary but are nevertheless examined by the Court if invoked by the parties. This justification ground is widely accepted by the Court today as a sole ground of justification and can be considered essential today to allow the Member States to protect their tax base against base erosion and profit shifting.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:uu-507100 |
| Date | January 2023 |
| Creators | Karlsson, Emilia |
| Publisher | Uppsala universitet, Juridiska institutionen |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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