Contradicting Views of Exit Taxation under OECD MC and TFEU: Are Exit Taxes Still Allowed in Europe?

Abstract

Already for some years, exit taxation has been a hot topic, especially within the EU. While this form of taxation is widely accepted in the international sphere, it remains arguable whether it infringes the freedom of establishment and/or capital movement. So far, due to the decisions of the Court of Justice of the European Union (CJEU), it has been accepted that, present some specific requirements, exit taxes are still allowed in the EU. In this article, the authors argue that, in spite of what the CJEU proclaims, exit taxes are not permitted in the EU anymore. The analysis and comparison of the nature of an exit tax, mainly its tax base, and the alleged exit tax currently allowed in the EU demonstrate that, as a matter of fact, when speaking of an accepted exit tax, the CJEU is prescribing a new allocation of taxing rights between the Member States.