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Taxation and Customs Union

General information

Compliance with the rules is the cornerstone of any community based on the rule of law and is fundamental to building the future. Enforcing the acquis communautaire is therefore one of the key tasks conferred by the Treaty on the Commission, as the guardian of the Treaties and secondary legislation.

The European Commission's Taxation and Customs Union Directorate General performs this task in its sphere of competence, namely Articles 21, 28, 29, 30, 45, 49, 56, 63, 110 and 111 of the TFEU (Treaty on the Functioning of the European Union) and secondary legislation on customs, direct taxation (taxation of companies, dividends, etc.) and indirect taxation (VAT, excise duties, motor vehicle taxation, etc.).

The Commission acts on its own initiative (where it detects a failure to comply with Community law) or in response to complaints. It first attempts to bring about compliance by contacting the Member State in question. If need be, it takes the matter to the Court of Justice, which delivers a judgment providing a definitive interpretation of the Community law. Most differences of opinion are settled during the first stage: in most cases Member States bring their legislation into line with Community law early in the procedure, before the matter goes to the Court.

The Commission also contributes to the interpretation of Community law by submitting its observations on questions referred by national courts to the Court of Justice for a preliminary ruling (Article 267 of the TFEU).

Anyone can challenge a Member State by lodging a complaint (see special form) against a measure (legislative, regulatory or administrative) or widespread administrative practice they consider incompatible with Community law. If the complaint appears to be founded, the Commission may initiate infringement proceedings. However, such proceedings can only result in a declaration that a provision or practice is indeed incompatible. It is therefore in the interests of complainants to use the remedies available at national level in order to uphold their rights and obtain redress in their personal cases, national courts being the only ones competent, for example, to award damages or grant an injunction against the administration.

Infringement procedure

Where it detects a failure to comply with Community law, the Commission may initiate the procedure for failure to fulfil an obligation provided for in Article 258 of the TFEU (See page 210).

In the first stage of the procedure, the Commission sends the Member State a letter of formal notice inviting it to submit its observations within two months. This exchange of views is not normally publicised.

Where the observations submitted by the Member State fail to persuade the Commission to change its point of view or where the Member State fails to respond to the request, the Commission may issue a reasoned opinion, allowing the Member State an additional two-month period within which to comply. At this stage the Commission issues a press release informing the EU's citizens of the purpose of the procedure.

If the Member State fails to conform with Community law, the Commission can take the case to the Court of Justice, whose judgment is binding.

If the Member State fails to comply with Court's judgment, the Commission may, after sending a further letter of formal notice and reasoned opinion, bring the matter before the Court of Justice a second time, seeking the imposition of a penalty payment under Article 260 of the TFEU (See page 211).