Taxation

Article 110 of the TFEU provides:

No Member State shall impose, directly or indirectly, on the products of other member states any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

Furthermore, no Member State shall impose on the products of other member states any internal taxation of such a nature as to afford indirect protection to other products.

In the taxation of rum case, the ECJ stated that:

The Court has consistently held that the purpose of Article 90 EC [now Article 110], as a whole, is to ensure the free movement of goods between the member states under normal conditions of competition, by eliminating all forms of protection which might result from the application of discriminatory internal taxation against products from other member states, and to guarantee absolute neutrality of internal taxation as regards competition between domestic and imported products."^[17]

Quantitative restrictions and measures having equivalent effect

In addition to prohibiting customs duties and discriminatory taxes, the TFEU, in Article 34, prohibits quotas and “measures having equivalent effect”. But what are measures having equivalent effect and how do they affect trade between member states? The Treaty does not answer these questions and European Court of Justice has over several decades provided detailed case law interpreting Article 34. In a well-known series of cases beginning with Dassonville,[18] continuing with Cassis de Dijon[19] and culminating in Keck and Mithouard,[20] the Court has said that discriminatory and non-discriminatory rules of member states (therefore not actions of private corporations or individuals) that hinder trade shall be illegal.