Wednesday, November 7, 2007
In this Article, Professor Mason argues that by applying a highly formalistic methodology to decide tax cases, the European Court of Justice (ECJ) avoids the challenge of weighing the harms of tax discrimination against the benefits to Member States in retaining autonomy over their tax systems. By eschewing normative analysis in favor of formalism, the Court engenders significant legal uncertainty both for taxpayers contemplating intra-Community investment and for Member States dependent on tax revenues. This uncertainty tends to undermine the very economic integration the prohibition on tax discrimination was meant to foster. Professor Mason identifies and describes the normative considerations that the Court could use to give greater content to the non-discrimination principle in tax cases. From the perspective of economic integration, these include the desire to curb tax protectionism, tax exportation, tax preferences for non-residents, and exit or other outbound restrictions. She also considers whether the Court's tax jurisprudence reflects and reinforces political integration in Europe.