Free
movement of goods is central to European Union law and of particular importance
for the United Kingdom in light of Brexit (and therefore, Northern Ireland). European
Union law prohibits financial and non-financial barriers to free movement of
goods. Yesterday, the posts referred to the first set of financial barriers and
the applicable law (arts 28-30 TFEU)
in relation to the prohibition of customs duties and charges having equivalent
effect (CEEs). Today, the post presents art 110 TFEU and the prohibition of discriminatory
internal taxation.
Art 110 TFEU prohibits discriminatory internal taxation once
goods have entered a member states. To be more precise, European Union law does
not ban internal tax regimes (this part of a state’s fiscal SOVEREIGNTY). In other words, Genuine internal taxes which
comply with art. 110 TFEU are not
against European Union law.
A genuine internal
tax means a general system of internal taxation applied systematically to
domestic and imported products alike according to the same criteria
irrespective of the origin of the products. Relevant case law: e.g. Capolongo Case 77/72BUT where an
internal tax does not comply with this definition, it will be prohibited by Art
110.
In brief, an internal
tax is unlawful if it discriminates against imported products or is protective
of domestic products. Art. 110 TFEU is more intricate. A very brief
introduction below.
Art 110(1) TFEU prohibits discriminatory taxation in respect of SIMILAR products. The
tax may be DIRECTLY or INDIRECTLY discriminatory.
Art 110(2) TFEU, where goods are not similar, prohibits discriminatory taxation in
respect of products IN COMPETITION.
The posts tomorrow and Friday will highlight the key elements referred to non-financial barriers. Thereafter, from Monday the posts centre the analysis on Northern Ireland; and how Brexit may affect positively their legal and political status.
Jorge
Emilio Núñez
18th July 2018
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