CJEU - Recent Developments in Direct Taxation 2025

1. Introduction

As in previous years the WU Conference on the direct tax case law of the European Court, which took place in December 2025, was stimulating, not only because of the large number of topics that came up in the Court’s recent and pending cases, but also because of the rich discussions that developed on a number of key issues. Two of these issues were of a more general nature and rather surprising.

On the first day, the participants briefly discussed the question of whether the EU lawmaker was competent to adopt the ATAD Directive on the basis of Art 115 TFEU. This question had been raised by AG Kokott in her Opinion in Case 524/23 Commission v. Belgium in which she submitted, amongst others, that: ‘Direct taxation, such as the corporate tax concerned in the present case, is in principle subject to the fiscal and tax sovereignty of the Member States.’ (point 1), that a higher competence standard applies to the harmonisation of direct taxation (because Art 115 TFEU uses the words: ‘directly affect the functioning of the internal market’), than to indirect taxation (because Art 114 uses the words: ‘is necessary’ to ensure the functioning of the internal market’)(point 31) a...