Europeanization of (Tax) Law and Federalism. An Introduction

The chapter uses a recent Italian reform — the 2023 amendment to the Charter of Taxpayers' Rights, which now frames the Charter's provisions as "general principles" implementing EU law principles — as a springboard to examine what "Europeanization of law" actually means and how it operates in tax law. It first distinguishes several senses of the term: as a bidirectional process by which domestic and supranational legal materials shape each other, as a broader phenomenon that can also occur horizontally (states borrowing from one another), and, more narrowly, as the "spillover effect" whereby EU law reaches areas nominally left to national competence. The core of the chapter then analyzes the EU as a federation with a "dual structure of democratic legitimacy," resting on both EU citizens and national peoples. It identifies two paradigms through which Europeanization of tax law occurs: first, the direct application of the fundamental freedoms and State aid rules, which constrains national tax sovereignty even in areas (like direct taxation) formally left to Member States, drawing a comparison to the U.S. "Dormant Commerce Clause"; and second, the extension of fundamental rights protection, where the CJEU has held that fundamental rights form part of the general principles of EU law, inspired by Member States' shared constitutional traditions. The chapter concludes that under EU Charter Articles 51(1)–(2), supranational rights protection tracks the EU's conferred competences while national protection remains grounded in domestic constitutions, but that Europeanization can still occur indirectly when national systems voluntarily align with the EU Charter's higher protective standard.