Internal taxation in the EU’s internal market : is Article 110 TFEU all about protectionism?

Abstract

This paper looks at the evolution of Article 110 TFEU through the Court of Justice of the European Union’s main cases. Such a phenomenon often occurs through the imposition of discriminatory taxation upon goods originating in another Member State with the intent and effect of promoting the locally produced good. Situations are reminiscent of the latter circumstances and can thus impede one of the four freedoms central to the proper functioning of the European Union, proving a hindrance to the free circulation of goods between the Member States. Thus, mechanisms preventing the application of such discriminatory measures through internal taxation are imperative. At face value, the wording of the article prevents discriminatory indirect taxation upon goods that are either similar or capable of competing. This said internal taxation may nonetheless be differential yet not discriminatory. The latter applies when there is an objectively justifiable reason for imposing a higher tax on goods originating in another Member State than that imposed upon the domestic product. Finally, the paper compares and contrasts jurisprudence to examine if an element of protectionism is needed for a national measure to be caught up by Article 110 TFEU.