The Directive on Global Minimum Taxation in Light of the Fundamental Freedoms

The book analyses the compatibility of the EU Directive on a global minimum tax with the fundamental freedoms, focusing on intra-EU and third-country situations.

Why This Book?

This book analyses the EU Directive 2022/2523 on a global minimum tax in light of the fundamental freedoms. Following the introductory chapter, the monograph examines the Income Inclusion Rule (IIR), the Undertaxed Profits Rule (UTPR), and the Qualified Domestic Top-Up Tax (QDTT), as outlined in the Directive.

Chapter 3 then explores the role of the internal market and the fundamental freedoms, with particular focus on the freedom of establishment and the free movement of capital, as these are the provisions most relevant to the investigation.

The core analysis is conducted in Chapter 4. The investigation focuses solely on situations within the in-scope groups, thus excluding those involving third parties. Then, the separate entity approach is employed, as this perspective appears to be adopted by the Directive as well.

Against this background, the book examines the relevant taxing rules in light of the aforementioned fundamental freedoms, considering both intra-EU and, where possible, third-country situations. Moreover, the study assesses whether the taxes in question are consistent with the taxpayers' right to property, as guaranteed by article 17 of the Charter of Fundamental Rights. Reflections are also offered from the perspective of the national implementing rules, assuming these are almost identical to the provisions of the Directive.

Once potential breaches of primary law have been identified and thoroughly analysed, also considering the case law of the European Court of Justice, the final chapter assesses whether a solution capable of preventing the identified conflicts may already exist within the Directive.

Despite a prima facie positive conclusion, several violations appear to persist. Therefore, the analysis concludes by examining the potential legal instruments available to taxpayers to safeguard their rights. Accordingly, the book explores the annulment procedure (primarily from a theoretical perspective) as well as the preliminary reference to the European Court of Justice, to assess whether these procedures can offer any protection against the remaining violations of EU primary law brought about by the taxing rules in question.