National Tax Sovereignty and EC Fundamental Freedoms: The Impact of Tax Obstacles on the Internal Market

Abstract

This article explores how the European Court of Justice (ECJ) has approached the obstacles to the internal market arising from national provisions in the field of direct taxation. Tax obstacles are not always a consequence of national rules incompatible with the EC Treaty. The first part of this article deals with the different types of impediments to the internal market. The second sets out the approaches adopted by the ECJ when analysing the compliance of these tax measures with EC law, namely, the per-country and the overall approaches. The author finally evaluates the impact of another approach (the internal consistency test), which could be adopted by the ECJ in order to overcome some of the drawbacks inherent to the abovementioned approaches.