Romance and divorce between international law and E.U. law: implications for European competence on direct taxes

Shafi U. Khan Niazi, Richard Krever

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1 Citation (Scopus)


Over the years, and particularly in the post-global financial crisis era, some harmonization of Member States' tax policy has increasingly been seen as a task necessarily incidental to the functioning of the single European market. However, since its inception, the E. U. constitution has never conferred express powers to the Union to harmonize income taxation of Member States. The sole explicit reference to income taxes in the E.U. constitution was an Article of the Treaty establishing the European Community (Article 293 EC) that was repealed during the Lisbon revision. The repealed provision urged the Member States to abolish double taxation by using tools of public international law, that is, outside the E. U. legal framework. This Article explores the potential implications that the deletion of the sole income tax reference, which was meant for Member States to proceed under the public international law, may have for E. U.-level tax mandate. In particular, it considers whether the repeal implies an end to the E.U. tax powers at all in the realm of direct taxes, is a neutral amendment with little consequence to E. U. tax authority already in place, or in effect enhances the implicit constitutional "federal" powers of the Union to intervene in national tax codes for establishment of a true European economic market. The Article analyzes the demise of the clause in a legal evolutionary paradigm at the interface of international law and E.U. law. In metaphor, we describe the changing evolutionary relationship between the European and international law regimes as a "tale of romance and divorce." The two laws meet curiously during the 1950s; feelings grow and a bond develops between the two regimes; the romance between the two legal regimes attains its peak during the Maastricht (Treaty) phase; strains appear in their relationship after the Amsterdam (Treaty) revision; the split goes deeper after the Nice (Treaty) amendments; and the two finally divorce at the Lisbon (Treaty) revision. Based on this ever-changing relationship framework between the two legal regimes, the Article concludes that the deletion of Article 293 EC indicates the integration project's growing reliance on European legal order, rather than trusting interstate treaties based on public international law and an inherent growth in the European "federal" mandate to take wide-ranging actions to harmonize direct taxes in single market during the post-repeal period is inevitable.

Original languageEnglish
Pages (from-to)129-168
Number of pages40
JournalStanford Journal of International Law
Issue number2
Publication statusPublished - 2017


  • European tax competence.
  • tax harmonixation
  • international law and EU law
  • legal evolution
  • European integration

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