Influence of International Mutual Assistance on EU Tax Law

ECJ case law shows that the free movement of capital requires Member States to treat only those external capital movements equal to EU-internal capital movements which involve cooperative third countries. Based on this ECJ case law, Member States are trying to protect their tax revenues by making tax benefits in third-country situations conditional upon the entering into an agreement on mutual assistance by third countries.

This article deals with the question whether and to which extent Member States are permitted to ask for agreements on exchange of information as well as on tax collection under EU law, and how these bilateral agreements need to be designed to qualify for equal treatment. In this respect, the potential impact of the new EU Mutual Assistance Directives, strengthening the efficiency of cooperation within the EU, is also taken into account.