Non-discrimination à la Cour the ECJ’s (lack of) Comparability Analysis in Direct Tax Cases

After reading the analysis below, the reader will probably be more confused than before – but at a much higher level – as it will show that it is hard to make heads or tails of the Court’s comparability analysis in free movement cases involving taxation. In taxation cases, the Court (i) routinely considers incomparable situations comparable, (ii) routinely mixes up objective (non)comparability and justification grounds, (iii) regularly misses discriminations, (iv) regularly perceives discriminations where there are none and (v) sometimes creates discriminations instead of doing away with them.

As far as it is possible to summarize the Court’s approach to taxation in free movement cases, Richard Vann’s observation during the seminar (of which these are the proceedings) was rather to the point: within the European Union, any taxation of a cross-border situation will be considered to be a discrimination, unless the Member State involved proves otherwise.

The analysis below aims at showing that only one comparability standard makes sense in free movement cases involving direct taxation: to be (subject to tax) or not to be (subject to tax) and that as long the Court will not adhere to that standard, its case law will remain inconsistent, legally uncertain, unfair, and impracticable.