Short answer
A national tax, fee, deposit, or formality is likely to breach EU law when it falls within EU law, disadvantages a person, company, service, or product because it comes from another Member State, and cannot pass the legal test applicable to that type of measure. Discrimination can be direct—for example, a deposit demanded only from foreign companies—or indirect, where a residence, registered-office, local-bank, or prior-registration condition mainly disadvantages cross-border actors.
The analysis is not one generic fairness test. The rule may come from a specific free-movement provision, specialist legislation such as the Services Directive, or, residually, Article 18 TFEU. First identify what moves across the border, what triggers the burden, and which domestic comparator receives better treatment.
A charge imposed because goods cross an internal EU frontier can be prohibited even if small. Conversely, direct-tax treatment of residents and non-residents is not automatically discriminatory: their situations must be comparable for the tax burden.
Start with the specific EU rule, not a general sense of unequal treatment
Article 18 TFEU supplies a general nationality rule, but its wording contains two important limits:
“Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.”
—
The measure must therefore be within the material scope of EU law. A cross-border economic activity, movement of an EU citizen, or exercise of another Treaty right may establish that connection. The words “without prejudice to any special provisions” also mean that the specific freedom normally controls. Article 49 TFEU addresses establishment; Article 56 addresses temporary cross-border services; Article 45 addresses workers; and Articles 30 and 110 contain specialised rules for fiscal burdens on goods.
This classification affects the evidence and possible defence. Nationality or a company's registered office creates direct discrimination. Residence, a local bank account, domestic registration, or a local-document condition can be indirect discrimination if formally neutral but mainly burdens cross-border actors. Other measures may be restrictions even if they burden domestic and foreign operators alike.
Border charges and internal taxes on goods follow different tests
For goods, first ask why the payment arises. Article 30 TFEU states:
“Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States.”
—
In Commission v Italy (statistical levy), Case 24/68, the Court of Justice held that a pecuniary charge imposed unilaterally because goods cross a frontier can be a prohibited charge having equivalent effect, however small and whatever its name or method. It need not protect domestic production or discriminate. A payment proportionate to a specific service actually rendered may fall outside that concept, but a general statistical benefit to the economy was not such a service.
An internal tax belongs instead under Article 110 TFEU. A Member State may not tax products from another Member State more heavily than similar domestic products, or structure taxation to protect competing domestic products indirectly. The court examines the tax system, products, rates, taxable basis, and protective effect—not merely the label “administrative fee”.
Direct taxation requires a careful comparison
Member States retain substantial competence over direct taxation, but they must exercise it consistently with EU free-movement law. Residence is particularly important because non-residents are often nationals of another Member State. It is therefore capable of producing indirect nationality discrimination, but it does not do so automatically.
In Schumacker, Case C-279/93, the Court explained that residents and non-residents are not generally comparable for personal tax benefits: the residence State usually sees worldwide income and personal and family circumstances. The result changed where a non-resident earned all or almost all income in the employment State and could not obtain those allowances at home. For that benefit, there was no objective difference justifying worse treatment.
Identify the precise advantage or burden, ask which State has the relevant information and taxing capacity, and determine whether the person can realistically obtain equivalent treatment elsewhere. A residence distinction is unlawful when it masks comparable circumstances and penalises free movement, unless a justification applies and the measure is proportionate.
Deposits and access-to-court conditions can be direct discrimination
A payment does not become neutral merely because it is called security rather than a fee. In Data Delecta and Forsberg, Case C-43/95, Swedish procedure required a foreign legal person—but not a Swedish one—to lodge security for litigation costs. The underlying action concerned payment for supplied goods.
“Since Community law guarantees such traders free movement of goods and services in the common market, it is a corollary of those freedoms that they must be able ... to bring actions in the courts of a Member State in the same way as nationals of that State.”
—
The Court characterised the foreign-only security rule as direct nationality discrimination and rejected the argument that equal treatment could depend on international enforcement agreements. The lesson is broader than litigation costs: identify who must provide the deposit, whether an equivalent domestic risk exists, and whether the rule uses nationality, establishment, or residence as a shortcut rather than assessing the actual risk through a less restrictive method.
The Services Directive sets concrete rules for charges, guarantees, and formalities
For service activities within its scope, Directive 2006/123/EC adds detailed requirements. Article 13 governs authorisation procedures:
“They shall be easily accessible and any charges which the applicants may incur from their application shall be reasonable and proportionate to the cost of the authorisation procedures in question and shall not exceed the cost of the procedures.”
—
Article 14 prohibits direct or indirect nationality and registered-office requirements, including local residence requirements. It also prohibits an obligation to obtain a financial guarantee or insurance from a provider established in the host State. That does not ban guarantees as such; it bans the local-provider tie. Articles 15 and 16 require covered restrictions to be non-discriminatory, necessary, and proportionate, while Article 20 protects service recipients against nationality or residence discrimination.
Scope must be checked before relying on those provisions. The Directive excludes taxation and sectors including financial services, transport, healthcare, gambling, private security, and certain social services. A more specific EU act can also prevail. Exclusion from the Directive does not create a safe harbour: the Treaty freedoms and relevant sector legislation may still prohibit the measure.
A form can be a restriction even without a fee
Administrative burden matters in substance. In Commission v Belgium, Case C-577/10, self-employed providers established in other Member States had to register and submit information before temporarily providing services in Belgium. Non-compliance carried criminal penalties. The Court found that even the simplified declaration impeded cross-border services.
“A general presumption of fraud is not sufficient to justify a measure which compromises the objectives of the FEU Treaty.”
—
Combating fraud, undeclared work, and social-security abuse can be legitimate public-interest objectives. The problem was proportionality: the declaration applied generally, demanded detailed advance information, and was not confined to cases presenting a real compliance concern. The Member State had not convincingly shown why all that information was necessary.
Host authorities may still perform checks. Objective differences between locally established and temporary foreign providers can justify targeted information. The authority should show the risk, the information lacking, why home-state records or cooperation are insufficient, and why a narrower declaration or later inspection would not work.
A practical decision checklist
When assessing a tax, fee, deposit, or formality, ask:
- What EU right is being exercised? Identify goods, work, establishment, services, capital, or citizenship and the cross-border element.
- What triggers the burden? Nationality, residence, registered office, foreign establishment, border crossing, imported status, or a neutral criterion?
- Who is the comparator? Check whether domestic and cross-border situations are objectively comparable for this precise burden or benefit.
- What is the correct legal category? Distinguish an Article 30 border charge, Article 110 internal tax, direct tax, authorisation charge, financial guarantee, and procedural deposit.
- Does specialist EU legislation apply? Check the Services Directive's scope, sector-specific measures, and national transposition.
- What evidence supports the objective? General assertions about fraud, cost, or enforcement are not enough.
- Is the design proportionate? Test amount, frequency, information demanded, deadlines, penalties, recognition of equivalent controls, and less restrictive alternatives.
- Is there an effective remedy? Review procedures, repayment, interest, and access-to-court rules can themselves create unequal burdens.
Conclusion
EU law is breached when a cross-border tax or administrative burden uses nationality or a proxy for it to impose worse treatment in comparable circumstances, or restricts a protected freedom without a valid and proportionate justification. The exact test depends on classification. Border charges on goods face an especially strict prohibition; internal taxes require product comparison; direct taxes require comparability analysis; and covered service charges and formalities must meet detailed Treaty and Services Directive safeguards. Labels do not decide the issue. The trigger, comparator, actual cost or risk, and availability of less restrictive measures do.
Sources
This article provides general legal information, not advice for a specific matter. Laws, facts and procedural deadlines may change the result. Follow the linked primary sources and obtain local advice before acting.