The Influence of the Principle of Union Loyalty in Tax Matters

Abstract:

The important but little-known Article 4, paragraph 3 of the Treaty on the European Union (TEU) expresses the principle of Union Loyalty. This article includes the principle of sincere cooperation and the obligation for Member States to help and not hinder the Union. The broad wording of this principle and its apparent obviousness falsely suggest that it is of secondary importance. In practice, the principle of Union loyalty proved decisive in capturing the precise obligations of Member States, in particular where the Treaty itself offered no solution. Not for nothing, the principle of Union loyalty is considered to be one of the main principles of the EU Treaty in legal literature.

After a brief analysis of the legal context and the general meaning of the principle of Union loyalty, this article intends to examine the impact of this principle in tax matters. Based on Article 4, paragraph 3, TEU, the ECJ developed numerous principles to ensure the effectiveness of European tax measures and to make sure that - in the exercise of their sovereign fiscal powers too - Member States do not put the full functioning of the Union at risk.