This
contribution discusses special sectoral taxes and analyses the CJEU judgments
that have been made on their compatibility with the EU law. These taxes have
aroused particular attention because they are levied on sales with progressive
rates. As they mainly affect large businesses owned by non-domestic persons,
the European Commission took action against suspected illegal state aid. The Commission
has still failed to defend its position before the EU judicial authorities.
The
literature has extensively criticized the CJEU-judgments. To date, however, no
author has argued that Member States’measures leading to covert state aid and indirect
discrimination are a consequence of the populist state’s abuse of power and that abuses are closely linked to the
decline of political democracy and the rule of law in these jurisdictions. As
things stand today, the EU legal
instruments have not sufficiently unveiled the type of abuse. The present paper
seeks to explain how the Member States could
commit abuses of taxation power when
applying special sectoral taxes.