This article analyses how the ECJ applies the proportionality principle in respect of direct taxation, as well as the consequences flowing therefrom. Part 1, published in European Taxation 9 (2017), addressed the proportionality principle and its application by the ECJ, while Part 2 covers the impact of the proportionality principle on justifications and the sovereignty of Member States in direct tax matters, as well as the consequences of the ECJ’s approach towards proportionality.