Eeotaxes in the Framework of Community Law

Abstract

The requirements of Community law to be met when setting up an ecotax derive from the fundamental principle of free circulation, and from different fields of law having different goals: the purpose of environmental law is environmental protection, whereas the purpose of international tax law is neutrality of tax measures. Community tax rules are deeply rooted in international (GATT/ WTO) law which still governs trade relations with third countries. International competitiveness is not to he distorted by tax measures. International law offers the instrument of border tax adjustment to ensure the neutrality of tax measures in cross border relations. However, border tax adjustment was not conceived in the light of environmental law. The merging of the two fields of law with different goals in the context of an ecotax tends to a preponderance of tax rules, simply because tax rules are so well-established in international law, whereas environmental rules, as part of a new field of law, are only slowly finding a Community-wide, or even worldwide, consensus. Greening the relevant tax rules therefore remains an open issue. The present article deals with the relevant Community law as developed by the Court of Justice, and draws attention to some of the open issues when environmental protection takes the form of taxes.