Non-(Fully) Harmonized Excise Taxes and Irrebuttable Presumptions

The global growth of excise taxes as regulatory taxes is arguably one of the most significant taxation developments of the last two decades. Not only their importance in terms of revenue collection may be increasing, reverting a long decline trend of excise taxation, but more importantly, the number of products subject to excise taxes in many EU Member States has also expanded well-beyond the traditional excisable goods. Yet EU tax law has not kept pace with these changes, with potential significant consequences for the functioning of the Internal Market. The aim of this article is to consider the compatibility of excise taxes rules not fully harmonized under the Excise Duties Directive, such as motor vehicle taxes, with EU law. It first argues that, whilst these taxes are not subject to full harmonization, they must nevertheless be compatible with EU primary law, namely Treaty provisions and general principles of EU law. Second, it argues that the Court of Justice case law as regards free movement and the use of irrebuttable presumptions in other non-fully-harmonized taxes, such as income taxes, should apply mutatis mutandis to excise taxes. It concludes that, the use of irrebuttable presumptions in excise taxes not fully harmonized under the Excise Duties Directive, such as motor vehicle registration rules, is contrary to general principles of EU law, and may constitute a restriction to free movement rules.