Cloaking Member State Objectives Through Legislative Instruments

Abstract

This contribution discusses special sectoral taxes and analyses the CJEU judgments that have been made on their compatibility with the EU law. These taxes have aroused particular attention because they are levied on sales with progressive rates. As they mainly affect large businesses owned by non-domestic persons, the European Commission took action against suspected illegal state aid. The Commission has still failed to defend its position before the EU judicial authorities. The literature has extensively criticized the CJEU-judgments. To date, however, no author has argued that Member States’measures leading to covert state aid and indirect discrimination are a consequence of the populist state’s abuse of power and that abuses are closely linked to the decline of political democracy and the rule of law in these jurisdictions. As things stand today, the EU legal instruments have not sufficiently unveiled the type of abuse. The present paper seeks to explain how the Member States could commit abuses of taxation power when applying special sectoral taxes. progressive sales taxes, tax harmonization, distributive justice, selectivity, reference framework, covert state aid, indirect discrimination, abuse of power, cloaking Member State objectives, seemingly objective legal criteria