The judgement of proportionality under the variables of fundamental freedoms and State aid rules is a process that often fails to promote legal certainty with respect to the necessity test, especially when the review involves tax measures of a Special Tax Zone (STZ).
The central idea of this article suggests the possibility of a new parameter for the necessity of territorial tax measures in order to limit the discretionality of the EU institutions and contribute in terms of legal certainty.
For this purpose, the concept of ‘fiscal residue’ is presented, giving evidence of its possible implementations in the context of STZs as an objective parameter for the necessity test, for both fundamental freedoms and State aid rules.
The discussion of the results covers the EU law and national law perspectives as well as the possibility of a system of EU governance for the use of the fiscal residue with respect to STZs.
Finally, the new outlook of the necessity test is focused on the equalization of the fiscal residue, opening doors for a more comprehensive idea of European Union, including the value of social cohesion at the territorial level.EC Tax Review