Interaction of EU law and direct tax
Produced in partnership with Etienne Wong of Old Square Tax Chambers
Interaction of EU law and direct tax

The following Tax practice note produced in partnership with Etienne Wong of Old Square Tax Chambers provides comprehensive and up to date legal information covering:

  • Interaction of EU law and direct tax
  • Introduction
  • Interaction of EU law and national law
  • Referral to the Court of Justice and the presumption of relevance
  • The fundamental freedoms
  • Freedom of establishment
  • Free movement of capital
  • Free movement of goods
  • Freedom to provide services
  • Free movement of persons
  • More...

Interaction of EU law and direct tax

This Practice Note is about the interaction between EU law and the direct tax rules of EU Member States, and in particular what happens where there is possible incompatibility between a national direct tax provision and an EU fundamental freedom.

This Practice Note includes the impact that EU law had on the direct tax rules of the UK while it was bound by EU law, ie until the end of the Brexit implementation period on 31 December 2020 (IP completion day). References in this Practice Note to judgments of the EU Court of Justice are to judgments that were decided before IP completion day, unless stated otherwise.

For information on the extent to which EU law continues to have an effect on direct tax rules in the UK after IP completion day, see Practice Note: Brexit and tax—the continued application of EU law. Note that the freedom of establishment, but not the right to the free movement of capital, were specifically repealed by regulations with effect from IP completion day.

The Court of Justice has held that the EU principle of abuse of rights, under which advantages conferred by EU law cannot be relied upon in cases of fraud or abuse, applies to direct tax as well as to VAT. For more information, see News Analysis: EU tax advantages denied by

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