Tax Incentives and Territoriality within the European Union: Balancing the Internal Market with the Tax Sovereignty of Member States

This article discusses the case law of the European Court of Justice concerning the compatibility with EU law of territorial tax incentives adopted by Member States from a legal institutional and policy perspectiveThe author will in particular focus on the potential justifications under EU fundamental freedoms to territorial ring-fencing of tax incentives, taking into account the necessary balance between the objectives of the Internal market and the EU systems of division of powers between the European Union and its Member States, based on the principles of conferral, subsidiarity and proportionality.