The territoriality of tax incentives within the single market

Although in the actual stand of the ECJ case-law, territorial tax incentives adopted by Member States are most likely to be considered as violating the freedoms of movement of the TFEU, as well as the prohibition of State aid, there are strong arguments – as the renewed concept of fiscal cohesion – in favor of a more cautious approach concerning the need under Eu Standards to systematically extend them to cross-borders activities. Having regard to the present division of powers between the EU and its Members States, the latter should not be disproportionately hindered when using taxation in the framework of their social and/or economic policies, in comparison with other policy instruments. Moreover, the analysis of the European treatment of territorial tax incentives shows that the Court should avoid applying simultaneously, whenever possible, EU Treaty freedoms and EU Treaty provisions on State aid. Priority should be given to the analysis of the compatibility under EU freedoms, except if the application of State aid provisions give an added value, for example when it concerns a different aspect of the national scheme brought under the Court’s scrutiny