EU principles

The relevance of EU law to the tax law of EU Member States

EU law is relevant to the tax law of Member States in two main ways:

1. •

   certain areas of tax law, most notably VAT, have been 'harmonised' across the EU by the means of Directives, meaning that each Member State is obliged to implement the Directives into their own law, and

2. •

   taxes that have not been harmonised still need to comply with the fundamental freedoms enshrined in the Treaty on the Functioning of the European Union (TFEU), eg freedom of establishment and freedom of movement of capital

The relevance of EU law to the UK’s tax law

The UK was subject to EU law until the end of the Brexit implementation period on 31 December 2020 (IP completion day).

EU law has been important in the historic development of UK tax law. For an illustration of two areas in which the UK’s tax laws have been heavily affected by EU law, see Practice Notes: A history of EU law and thin capitalisation and transfer pricing regimes [Archived] and A history of EU law