General Tax Law Issues

​​1. Background and history

Under European Union (EU) law, both the fundamental freedoms of the Treaty of Rome and secondary EU law aim at facilitating cross-border restructuring of businesses. While the former are the basis for the vast majority of all decisions of the European Court of Justice (ECJ) on tax matters, the latter aims at setting standard rules across the EU by alleviating the existing disparities between the tax systems of the various EU member states. This chapter will give an overview of the Merger Directive,⁷⁷Council Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different EU member states, O.J. L 225/1 of 20 August 1990. as currently in effect (the Merger Directive), and will scrutinize its compatibility with the fundamental freedoms, based on the judicature of the ECJ.