Case C‑20/16
Wolfram BechtelandMarie-Laure Bechtel
v
Finanzamt Offenburg
(Request for a preliminary ruling from the Bundesfinanzhof)
(Reference for a preliminary ruling — Freedom of movement of workers — Income received in a Member State other than the Member State of residence — Method of exemption with maintenance of progressivity in the Member State of residence — Pension and health insurance contributions levied on income received in a Member State other than the Member State of residence — Deduction of those contributions — Condition relating to the absence of a direct link with exempted tax revenues)
Summary — Judgment of the Court (Tenth Chamber), 22 June 2017
Freedom of movement for persons—Workers—Equal treatment—Exceptions—Posts in the public service—Limits
(Art. 45 TFEU)
Freedom of movement for persons—Workers—Equal treatment—Income tax—Bilateral convention for the avoidance of double taxation making provision for the method of exemption with maintenance of progressivity in the Member State of residence—Taxpayer residing in one Member State and working for the public administration of another Member State—Not possible for that taxpayer to deduct from the income tax basis of assessment in the Member State of residence the pension and health insurance contributions deducted from the income received in the Member State of employment—Not permissible—Justification—None
(Art. 45 TFEU)
See the text of the decision.
(see paras 33-35)
Article 45 TFEU must be interpreted to the effect that it precludes legislation of a Member State, such as that at issue in the main proceedings, under which a taxpayer residing in that Member State and working for the public administration of another Member State may not deduct from the income tax basis of assessment in her Member State of residence the pension and health insurance contributions deducted from her wages in the Member State of employment, in contrast to comparable contributions paid to the social security fund of her Member State of residence, where, under the Convention for the avoidance of double taxation between the two Member States, the wages must not be taxed in the worker’s Member State of residence and merely increase the tax rate to be applied to other income.
The refusal to grant a resident taxpayer the advantages arising from the fact that her personal and family circumstances are taken into account in the form of deductions of additional pension and health insurance contributions, such as those at issue in the main proceedings, as special expenses cannot therefore be justified either for reasons connected with the balanced allocation of powers of taxation or the maintenance of fiscal cohesion.
(see paras 79, 80, operative part)