The Side-by-Side Arrangement under EU Law: A Constitutional Catch-22

This article explores the constitutional and democratic challenges posed by the European Union’s adoption of the OECD’s Side-by-Side (SbS) arrangement under the EU Minimum Taxation Directive (2022/2523). The SbS arrangement forces Member States to compromise core legal principles, such as the legality of taxation and democratic accountability. The delegation of normative power via article 32 of the Directive weakens EU constitutional democratic safeguards. This raises concerns under the delegation doctrine (Meroni) and EU State aid law. Ultimately, the SbS arrangement exposes the limits of the European Union’s constitutional coherence, offering no solution that aligns political goals with constitutional requirements.