On 9 September 2022, five Member States announced that should agreement on the legislative proposal concerning the EU implementation of globalminimumcorporate tax rate be impossible to achieve, they would proceed with implementation of the measure, either unilaterally or through the enhanced cooperation procedure.1 The announcement came after one Member State, Hungary, blocked agreement at the Council meeting in June. Whilst agreement has now been reached,2 for a while the possibility of triggering the enhanced cooperation procedure loomed ever larger. Two months after that announcement, on 8 November 2022 the Court of Justice of the European Union (CJEU) delivered its eagerly awaited decision on the Fiat case, concerning the use of state aid law to strike down tax deals. In what has been widely seen as amajor defeat for the European Commission,3 the CJEU allowed Fiat’s appeal against the previous decision of the EU General Court, and annulled the Commission’s state aid decision against Luxembourg, effectively closing – or least significantly limiting – the use of state aid law on tax matters. What do these two taxation developments have in common? On the surface, nothing other than the fact that they both concern EU initiatives on corporate tax matters; in reality, however, there is a close link between them: the EU unanimity rule in tax matters. Both the enhanced cooperation procedure and state aid law have come to be regarded as alternative paths’ to harmonization in taxation, where unanimous agreement under Articles 113 and 115 Treaty on the Functioning of the European Union (TFEU) cannot, or would be unlikely to, be reached. These latest developments on how, and to what extent, they can be used highlight the significant – and growing – costs of keeping the unanimity rule in taxation. The question is then, is it worth keeping?
CORE (COnnecting REpositories)
CORE (COnnecting REpositories)