Judgment — ECLI:EU:C:2009:527
Date: 2009-09-10
Language of the case: German
Court formation: Second Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Citizenship of the Union;Free movement of workers;Anti-discrimination;Non-discrimination on grounds of nationality
Concepts: Equal treatment;Citizenship of the Union
Procedure: Action for failure to fulfil obligations - successful
Origin: Germany

Summary of the Judgment 1. Freedom of movement for persons – Workers – Equal treatment – Social advantages – Concept (Council Regulation No 1612/68, Art. 7(2)) 2. Freedom of movement for persons – Workers – Equal treatment – Social advantages – Savings‑pension bonus designed to compensate for the future reduction in the level of the statutory pension – Limitation on the grant of the bonus to taxpayers who are fully liable to tax (Art. 39 EC; Council Regulation No 1612/68, Art. 7(2)) 3. Freedom of movement for persons – Workers – Equal treatment – Social advantages – Savings‑pension bonus designed to compensate for the future reduction in the level of the statutory pension – Use of capital built up under a savings-pension contract for the acquisition or construction of an owner-occupied dwelling restricted to property situated in the national territory (Art. 39 EC; Council Regulation No 1612/68, Art. 7(2)) 4. Freedom of movement for persons – Workers – Equal treatment – Social advantages – Savings‑pension bonus designed to compensate for the future reduction in the level of the statutory pension – National legislation providing that the bonus be reimbursed on termination of full liability to tax in the Member State concerned (Arts 18 EC and 39 EC; Council Regulation No 1612/68, Art. 7(2)) 1. The concept of social advantage referred to in Article 7(2) of Regulation No 1612/68 on freedom of movement for workers within the Community covers all the advantages which, whether or not linked to a contract of employment, are generally granted to national workers primarily because of their objective status as workers or by virtue of the mere fact of their ordinary residence on the national territory, and the extension of which to migrant workers therefore seems likely to facilitate their mobility within the Community. That concept covers a saving‑pensions bonus created to compensate for the future reduction in the level of the statutory pension and, to that end, constitutes financial aid designed to encourage the persons concerned to build up a complementary pension throughout their working lives. The bonus is granted principally to salaried workers who are insured under the statutory pension insurance scheme and is granted independently of the beneficiary’s income, its amount depending both on the contributions made under the savings‑pension contract and on the number of children for whom the beneficiary receives family allowances. (see paras 39, 41-43) 2. A Member State which introduces and maintains provisions for complementary retirement pensions fails to fulfil its obligations under Article 39 EC and Article 7(2) of Regulation No 1612/68 on freedom of movement for workers within the Community in so far as those provisions deny cross-border workers and their spouses the right to the savings-pension bonus unless they are fully liable to tax in that Member State. Unless it is objectively justified and proportionate to the aim pursued, a provision of national law must be regarded as indirectly discriminatory if it is intrinsically liable to affect migrant workers more than national workers and if there is a consequent risk that it will place the former at a particular disadvantage. As regards cross‑border workers whose income is taxed exclusively in their State of residence pursuant to bilateral conventions to prevent double taxation, those workers do not have the possibility, in the Member State of employment, of being treated in the same way as fully‑liable taxpayers. In those circumstances, the requirement of being fully liable to tax in the Member State of employment amounts to a residence requirement. Consequently, the cross‑border workers in question, who, by definition, have their residence in another Member State, are denied the benefit of the savings‑pension bonus. Accordingly, making the grant of the savings‑pension bonus subject to a condition amounting to a residence requirement constitutes an infringement of Article 39 EC and Article 7(2) of Regulation No 1612/68. The same applies where the national legislation in question makes the grant of the savings-pension bonus for spouses subject to the requirement that they be fully liable to tax in the Member State of employment. Such a national measure cannot be justified by the coherence of the tax system of the Member State concerned since the latter is ensured on the basis of bilateral conventions to prevent double taxation concluded by that Member State with other Member States. (see paras 54, 56-57, 59, 63, 65-69, operative part) 3. A Member State which introduces and maintains provisions for complementary retirement pensions fails to fulfil its obligations under Article 39 EC and Article 7(2) of Regulation No 1612/68 on freedom of movement for workers within the Community in so far as those provisions prohibit cross-border workers from using the subsidised capital for the acquisition or construction of an owner-occupied dwelling unless it is situated in the Member State of employment. By affording cross‑border workers less favourable treatment than that enjoyed by workers resident in the Member State of employment, such legislation constitutes indirect discrimination on grounds of nationality, since it is not capable of being justified by the aim of ensuring an adequate supply of housing and of preserving the national social security regime. As regards, in the first place, the aim of ensuring an adequate supply of housing, on the assumption that such an aim constitutes an overriding reason in the public interest, the requirement that the dwelling to be acquired or constructed must be situated in the Member State of employment on any view goes beyond what is necessary to achieve the desired objective since that objective could be just as easily attained if cross‑border workers continue to establish their residence in another Member State rather than in the Member State of employment. As regards, in the second place, protection of the national social security system, that objective can be attained in the same way if the capital of the savings‑pension is able to be used for the acquisition of a dwelling outside the Member State of employment. (see paras 80-82, 84-85, operative part) 4. A Member State which introduces and maintains provisions for complementary retirement pensions fails to fulfil its obligations under Article 39 EC and Article 7(2) of Regulation No 1612/68 on freedom of movement for workers within the Community and Article 18 EC in so far as those provisions provide that the savings-pension bonus be reimbursed on termination of full liability to tax in that Member State. Since those provisions require the beneficiary of the bonus who leaves his domicile or habitual residence in the Member State concerned, and who is therefore no longer fully liable to tax, to reimburse the savings‑pension bonus, migrant workers, who are generally non‑nationals, are more likely to leave the Member State of employment to work and establish their residence in another Member State and thus more likely to cease being fully liable to tax in the Member State of employment. Foreign workers are therefore more likely to be the subject of a disadvantage than national workers. It follows that the provisions at issue discriminate indirectly against migrant workers. Moreover, such an obligation to reimburse has a deterrent character in relation to nationals of the Member State concerned. Since the provisions at issue require beneficiaries to reimburse, on termination of full liability to tax in that State, the savings-pension bonus, any worker who is a national of that Member State wishing to avail himself of his right to freedom of movement pursuant to Article 39 EC, and, in particular, his right to establish himself in another Member State, finds himself in a less favourable position than a worker who maintains his residence in the national territory and continues to be fully liable to tax in that Member State. That difference of treatment is likely to discourage workers who are nationals of that Member State from exercising a professional activity outside the national territory and is therefore liable to impede freedom of movement for workers. The same conclusion applies in respect of persons who are not economically active, for the same reasons, in respect of infringement of Article 18 EC. Such an impediment cannot be justified by the coherence of the tax system of the Member State concerned since that coherence is ensured on the basis of bilateral conventions to prevent double taxation concluded by that Member State with other Member States. (see paras 101-102, 104, 109, 112-113, 115-116, operative part)