Double Taxation: A European 'Switch in Time'?

Abstract

This article considers whether the fundamental freedoms of the EC Treaty encompass an absolute requirement on the Member States to mitigate double taxation, and it concludes that such a requirement could reasonably be inferred from the goals of the fundamental freedoms and the European Court of Justice's "double burden" jurisprudence. Notwithstanding the reasonableness of that interpretation, in the recent Kerckhaert & Morres case, the Court of Justice seems to have held that juridical taxation does not violate the EC Treaty, even though double taxation distorts the Internal Market. We review the history of the Court's relevant jurisprudence, consider whether the Court has left any room for future rulings proscribing juridical double tax, and compare the treatment of double state taxation in the United States by the Supreme Court under the dormant Commerce Clause.

Keywords: ECJ, European Court of Justice, tax discrimination, double taxation, EC Treaty, double burdens, mutual recognition, Kerckhaert, Moorman, Container Corporation, Supreme Court, Commerce Clause, apportionment, Bibb, internal market, common market, freedom of movement, double tax treaties, DTC, imputati

JEL Classification: H20, H25, H70, H71, H73, H77, H87, K34, F02, F15