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PROCEDURAL TRANSFORMATIONS AND RESISTANCE TO TAX HARMONISATION IN EUROPE

Eliott Boumrar is the CEO of FEUTURE International Consulting. In this legal article he unpacks the tension between rigid decision-making procedures and the need to transform tax law in the European Union.


The European Commission has initiated talks to harmonise tax law in the European Union[1].

However, it seems unclear whether the decisionmaking framework will allow for such a change to be

implemented. There is a risk that the political impetus for transformation may be paralysed by procedural

requirements, become uncertain, and ultimately lead to an indefinite state of limbo.

What is at stake? The European Union’s efforts to harmonise tax law for businesses and citizens

requires, in principle, a unanimous vote from each Member State. On the one hand, “fiscalism”[2] is a

core-state policy; on the other hand, globalisation, the growing public concern over tax avoidance, and the goal of financing climate objectives, play in favour of such an harmonisation.


The main issue is, however, that tax harmonisation would be almost impossible to implement with the

rule of unanimity: The key aim of the reform is to replace the rule of unanimity with Qualified Majority

Voting[3], which would require a Treaty Revision. In the European Union framework, unanimity means

consensus (abstention does not block the vote), while Qualified Majority Voting means that the votes at Council must represent at least 65% of the population and 55% of Member States.

Article 48(7) of the Treaty on the European Union allows a switch to majority voting under the following Treaty revision: the European Parliament and the European Council must vote, and no Member State

Parliament should raise a disagreement for 6 months. However, the main issue is that this procedure has

been effectively neutralised.


"The rigidity of increasingly complex rule-making processes is both necessary for the rule of law, but can at the same time stand in tension with the need to deliver tangible results for citizens."

Indeed, some Member States have discretely adopted specific rules to make sure that such a Treaty revision is almost impossible to activate. Half of the parliaments may prohibit their representative at the

European Council from activating this procedure, the German Constitutional Court ordered that all

Member States votes should take place in six months, and the justices in Luxemburg reserved the right to

outrule a Simplified Treaty revision procedure[4]. But, “Constitutional Hardball”[5] is a two-edged

sword. The European Commission currently considers tricking the decision-making system into allowing a

change of majority voting without revising the Treaties. Tax law requires a unanimous vote. But, if

the matter at stake is energy tax law[6], this issue might be declassified as a tax law and, thus, fall into

energy and climate law. The latter requires Qualified Majority Voting, instead of Unanimity.


This raises doubts about the rule-of-law system. The European Commission’s hypothesis obviously seems

borderline, yet this is a last-resort option as the Simplified Treaty revision procedure was unlawfully

neutralised. It is a “nuclear option”[7] and the justices might decide to rule it illegal. A lack of political

leadership in the Treaties framework causes huge legal uncertainties, while tax law should be clear.

Indeed, institutions need to choose between constitutional permanence and the procedural tricks

that would allow them to deliver change. This highlights how the rigidity of increasingly complex

rule-making processes is both necessary for the rule of law, but can at the same time stand in tension with

the need to deliver tangible results for citizens.



Niki Radman, Up, 57 | Business & Insights Photograph, 2021.

[1] European Commission, Toward a more efficient and democratic decision making in EU tax law, 2019

[2] Wallerstein, The Modern World-System, 1974

[3] Hartley, Alexander, Qualified majority voting will drive reform, says EC’s tax chief, 2019

[4] European Court of Justice, Case C-370/12, Thomas Pringle v Government of Ireland, 2012

[5] Tushnet, Constitutional Hardball, 2004

[6] European Commission, The role of taxation in energy and environmental policy, 2009

[7] English, Joachim, Article 116 TFEU – The Nuclear Option for Qualified Majority Tax Harmonization?, 2020