Cauza C-196/04, Cadbury Schweppes
Case C-196/04, Cadbury Schweppes

Summary/Abstract: The Cadbury Schweppes jurisprudence illustrates the complexity and challenges associated with combatting tax base erosion and profit shifting in the context of efforts to ensure the proper functioning of the internal market, where the exercise of the four fundamental freedoms is guaranteed. The establishment of secondary headquarters in Member States with a more favorable tax regime was considered part of the exercise of the freedom of establishment, without the possibility of presuming the existence of tax evasion. The decision also contributed to clarify the meaning of the notion of abuse of law in the context of the exercise of fundamental freedoms. Thus, only the creation of a secondary establishment without carrying out of a real economic activity was considered abusive.

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