The impact of the EU Anti-Tax Avoidance Package on the exercise of national tax sovereignty
In the context of the complex relationship between the competences of the European Union and the competences of the Member States, “direct taxation is special”: on the one hand, it is subject to the sovereign powers of the Member States; on the other hand, direct tax provisions may result in a restriction on one of the fundamental treaty freedoms and thus be scrutinized in the light of EU law by the Court of Justice of the European Union. Given this framework, the court has generally sought a balance between fundamental freedoms and national tax sovereignty. The Anti-Tax Avoidance Package published by the European Commission in January 2016 – and the Anti-Tax Avoidance Directive, especially – have a clear impact on this balance, as Member States are required to counter the abuse of their domestic tax laws by introducing compulsory anti-avoidance measures in their domestic systems. The reach of such an initiative appears to go far beyond the scope of the pre-existing EU law adopted in the field of direct taxation: the ATAD also includes general provisions that apply not only to cross-border scenarios but even to purely domestic situations. The following implications thus deserve to be highlighted: (i) the obligation, imposed on Member States, to fight the avoidance of domestic tax law; and (ii) the existence of this obligation even in purely domestic situations. The fact that Member States can no longer idly tolerate the abuse of their own domestic tax laws represents a new level of interference in their tax sovereignty, as well as a remarkable qualitative difference compared to previous EU acts, which address only – if at all – the circumvention of EU law. Hence, the present chapter examines the provisions included in the package and their impact on domestic tax systems. The purpose is to assess the implications of the implementation of such rules in terms of sovereignty.
Source (book)
European tax integration: law, policy and politics / Pistone, Pasquale [edit.]
Source (series)
GREIT Series
Amsterdam : IBFD , 2018
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Creation 16.04.2024
Last edited 18.04.2024
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