Opinion of the Advocate General — ECLI:EU:C:2023:882
Date: 2023-11-16
Language of the case: German
Subject matter: External relations;Free movement of workers
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary C-627/22 – 1 
Case C-627/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
4 October 2022 
Referring court: 
Finanzgericht Köln (Germany) 
Date of the decision to refer: 
20 September 2022 
Applicant: 
AB 
Defendant: 
Finanzamt Köln-Süd 
  
Subject matter of the main proceedings 
National income tax law – Restriction of a tax benefit to employees residing or 
having their habitual abode in Germany or in EU/EEA States to the exclusion of 
employees residing in Switzerland – Compatibility with the Agreement on the 
Free Movement of Persons between the European Union and Switzerland 
Subject matter and legal basis of the request 
Interpretation of EU law, Article 267 TFEU 
Question referred for a preliminary ruling 
Are the provisions of the Agreement between the European Community and its 
Member States, of the one part, and the Swiss Confederation, of the other, on the 
free movement of persons (OJ 2002 L 114, p. 6), which entered into force on 
1 June 2002 (‘the Agreement on the Free Movement of Persons’; ‘the AFMP’), in 
particular Articles 7 and 15 of the AFMP, read in conjunction with Article 9(2) of 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-627/22 
 
2  
Annex I to the AFMP (right to equal treatment), to be interpreted as precluding 
legislation of a Member State under which employees who are nationals of an EU 
or EEA Member State (including Germany) and who reside (with their place of 
residence or habitual abode) in Germany or in EU/EEA States may voluntarily 
apply for an assessment of income tax that takes into account income from 
employment that is taxable in Germany (‘voluntary assessment’), in particular in 
order to receive an income tax refund allowing for expenses (income-related 
expenses) and crediting German wage tax withheld as part of the tax deduction 
procedure, but that right is denied to German and Swiss nationals residing in 
Switzerland? 
Provisions of international law relied on 
Agreement between the Swiss Confederation and the Federal Republic of 
Germany on the avoidance of double taxation with respect to taxation of income 
and assets (‘the DTA Germany-Switzerland’). 
Provisions of European Union law relied on 
Agreement between the European Community and its Member States, of the one 
part, and the Swiss Confederation, of the other, on the free movement of persons, 
specifically Article 7 and Article 15 in conjunction with Article 9(2) of Annex I 
Provisions of national law relied on 
Einkommensteuergesetz (Law on income tax, ‘the EStG’) 
Succinct presentation of the facts and procedure in the main proceedings 
1 The legal dispute concerns the assessment of the applicant’s income tax for the 
years 2017 to 2019 (the years in dispute). It is disputed whether the applicant, who 
at the time resided in Switzerland, is to be granted the right to voluntary 
assessment of his income from employment, contrary to the provision in the EStG, 
on grounds of European law in application of the AFMP. 
2 The applicant is a German national and worked as a manager for a company 
having its registered office in Germany during the years in dispute. He earned 
income from employment from this activity. His sole place of residence and 
habitual abode were located in Switzerland during this period. The applicant 
worked for his German employer both in the field and at his (Swiss) home office. 
In the course of his work, he looked after his German clients partly on site in 
Germany and partly from his place of residence. His employer withheld wage tax 
from his total gross salary and paid the sums to the German tax administration. 
During the years in dispute, the tax authorities did not register a tax relief for the 
applicant as an ‘attribute relating to the deduction of wage tax’. 
FINANZAMT KÖLN-SÜD 
 
3 
3 The applicant was indisputably subject to a tax liability in Germany, limited to 
just his domestic income, during the years in dispute. As well as income from 
employment, he earned income from the rental of two properties located in 
Germany. 
4 In his tax returns for the years in dispute, the applicant applied for an assessment 
of German income tax and argued that limiting this voluntary assessment to 
employees residing in a Member State of the EU or the EEA was unlawful on the 
basis of the AFMP. 
5 The notices of assessment issued by the defendant for the years in dispute only 
took into account the applicant’s rental income when calculating German income 
tax, but not his income from employment. As a result, the German wage tax 
already paid was not credited against the income tax, nor were the income-related 
expenses claimed by the applicant taken into account. The objections filed against 
these notices were unsuccessful. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
National legislative framework 
6 In the German tax system, tax is withheld from wages (‘wage tax’) for income 
from employment, particularly with a domestic employer. The employer must 
withhold wage tax from the employee’s salary on the latter’s account each time 
the salary is paid; the amount withheld is, in principle, based on their gross salary. 
7 For any employee subject to a limited income tax liability, including those who 
reside in a third country, as the applicant did at the time, a tax relief amounting to 
the income-related expenses incurred for income from employment can be 
registered voluntarily, resulting in a lower amount of wage tax being withheld. 
This voluntary assessment must be applied for before the end of the respective 
assessment period and results in a compulsory assessment procedure being carried 
out, during which the income tax that is ultimately payable is calculated by 
crediting the wage tax already paid. This procedure can lead to both back taxes 
and tax refunds. 
8 If no application to register a tax relief is made, an income tax assessment is 
nevertheless possible, which is again voluntary. This application can be made 
within a period of four years. However, it is only nationals of a Member State of 
the EU or the EEA who have their place of residence or habitual abode in the 
territory of one of these states that are entitled to such a voluntary assessment. The 
applicant is therefore not eligible. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-627/22 
 
4  
Doubts under European Union law 
Scope of application and protection of the AFMP 
9 The applicant falls within the scope of application and protection of the AFMP. 
Under the AFMP, he has the right to be accorded the same living, employment 
and working conditions as those accorded to nationals, that is, persons residing in 
Germany. According to the case-law of the Court of Justice on the AFMP, 
nationals of a contracting party may also claim rights under the Agreement against 
their own country, in certain circumstances and in accordance with the provisions 
applicable (judgment of 28 February 2013, Ettwein, C-425/11, EU:C:2013:121, 
paragraph 33). The Court of Justice has interpreted the AFMP as also being 
intended to prevent a national of a contracting party being placed at a 
disadvantage in his country of origin solely for having exercised his right of 
movement (judgment of 28 February 2013, Ettwein, C-425/11, EU:C:2013:121, 
paragraph 51). The Court of Justice argued along the same lines in the judgment 
of 26 February 2019, Wächtler (C-581/17, EU:C:2019:138). In the present case, 
the German provision on voluntary assessment could lead to a taxpayer not 
making use of his or her right to establish a residence in Switzerland due to 
adverse tax consequences. 
10 The DTA Germany-Switzerland is not relevant to the decision in the present case 
because the applicant does not seek equal treatment under the DTA and this is not 
necessary due to the rights granted to him by the AFMP. 
Difference in treatment despite objective comparability 
11 Pursuant to Article 15 of the AFMP in conjunction with Article 9(2) of Annex I to 
the AFMP, the applicant – who resided in Switzerland at the time – should, in 
principle, be treated in the same way as a domestic employee, that is, an employee 
residing in the State of employment (Germany). 
12 While employees residing in Germany or in an EU/EEA State can claim the tax 
advantages associated with a voluntary assessment, the applicant, who resided in 
Switzerland at the time, is denied this right. 
13 Pursuant to Article 21(2) of the AFMP, no provision of this Agreement may be 
interpreted in such a way as to prevent the Contracting Parties from 
distinguishing, when applying the relevant provisions of their fiscal legislation, 
between taxpayers whose situations are not comparable, especially as regards their 
place of residence. 
14 In its judgment of 14 February 1995, Finanzamt Köln-Altstadt v Schumacker 
(C-279/93, EU:C:1995:31, paragraph 3 of the operative part), the Court of Justice 
confirmed that non-resident EU/EEA nationals should be treated the same as 
nationals when it comes to the right to voluntary assessment. The judgment of 
28 February 2013, Ettwein (C-425/11, EU:C:2013:121) previously extended 
FINANZAMT KÖLN-SÜD 
 
5 
paragraph 2 of the operative part of the judgment in Schumacker to include cases 
involving Swiss nationals. This militates in favour of now also extending 
paragraph 3 of the operative part of this judgment to cases involving the AFMP. 
There are no obvious and convincing arguments as to why the applicant is not in a 
comparable situation to nationals or EU/EEA foreigners, nor have any been 
explicitly presented by the parties. 
15 In addition, in the case in dispute, the applicant seeks only equivalence for 
Switzerland with the EU/EEA States as concerns the voluntary assessment and no 
‘national rights’ beyond that. However, Article 21(2) of the AFMP only allows for 
a differentiation to be made between resident and non-resident taxpayers, but not a 
discrimination of non-resident taxpayers residing in Switzerland compared to non-
resident taxpayers residing in the EU/EEA area. The provision in the first sentence 
of Article 16(2) of the AFMP does not change this, because the judgment in 
Schumacker was handed down before the AFMP was signed. 
Justifying circumstances 
– Admissibility of the difference in treatment under Article 21(3) of the 
AFMP 
16 Pursuant to Article 21(3) of the AFMP, no provision of this Agreement is to 
prevent the Contracting Parties from adopting or applying measures to ensure the 
imposition, payment and effective recovery of taxes or to forestall tax evasion. 
17 In the present case, there is no obvious reason within the meaning of Article 21(3) 
of the AFMP that would warrant the applicant being excluded from the voluntary 
assessment. In particular, the payment and effective recovery of taxes is not 
affected. If persons subject to limited tax liability from third countries are allowed 
to have a tax relief registered as an attribute relating to the deduction of wage tax, 
there is no reasonable ground why a person subject to limited tax liability from a 
third country should not also be able to choose a voluntary assessment. The 
referring court does not consider the judgments of the Court of Justice on tax 
deduction cited by the defendant (judgments of 3 October 2006, FKP Scorpio 
Konzertproduktionen, C-290/04, EU:C:2006:630, of 15 February 2007, Centro 
Equestre da Lezíria Grande, C-345/04, EU:C:2007:96, and of 22 December 2008, 
Truck Center, C-282/07, EU:C:2008:762) to be relevant to the decision. They 
were not issued in relation to the right to voluntary assessment, nor do they allow 
any conclusions to be drawn in that respect. 
18 The fact that the applicant could have obtained a subsequent voluntary assessment 
by applying for a tax relief cannot justify an exclusion of the right to voluntary 
assessment, as, in its judgment of 14 February 1995, Finanzamt Köln-Altstadt v 
Schumacker (C-279/93, EU:C:1995:31, paragraph 53 et. seq.), the Court of Justice 
previously ruled that hypothetical alternative facts could not serve as justification 
and because the procedure for registering a tax relief with subsequent mandatory 
assessment can have varied negative effects. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-627/22 
 
6  
– ‘Standstill’ clause in Article 13 of the AFMP 
19 Pursuant to Article 13 of the AFMP, the Contracting Parties undertake not to 
adopt any further restrictive measures vis-à-vis each other’s nationals in fields 
covered by this Agreement. Conversely, the defendant considers the restrictions in 
place at the time the Agreement was concluded to be admissible. 
20 That argument is unconvincing. It is clear from its wording that the provision does 
not regulate the justification of existing restrictions, but rather the prohibition on 
the introduction of new restrictions. It is also questionable whether the reverse is 
even admissible from a legal and methodical point of view. The clause in the first 
sentence of Article 16(2) of the AFMP also militates against the defendant’s view. 
If, as argued by the defendant, Article 13 of the AFMP were to ‘perpetuate’ a 
legal situation for cross-border cases with Switzerland that existed at the time the 
Agreement was concluded, this would be contrary to the objectives of the AFMP 
and the planned adoption of the case-law of the Court of Justice on the 
interpretation of the AFMP. The Member States could then always invoke the 
‘standstill’ clause against the transfer of the fundamental freedoms developed by 
the Court of Justice to the AFMP. 
21 That notwithstanding, the previous decisions of the Court of Justice on the AFMP 
do not indicate that the ‘standstill’ clause constitutes a justifying circumstance. 
Thus, in its judgment of 28 February 2013, Ettwein (C-425/11, EU:C:2013:121), 
the Court of Justice extended the judgment of 14 February 1995, Finanzamt Köln-
Altstadt v Schumacker (C-279/93, EU:C:1995:31), to include cases involving 
Swiss nationals. The fact that no corresponding rights for Swiss citizens were 
provided for in the EStG when the AFMP was concluded did not, in the Court’s 
view, constitute an obstacle or justifying circumstance. It ruled along the same 
lines in the judgments of 21 September 2016, Radgen (C-478/15, EU:C:2016:705) 
and of 26 February 2019, Wächtler (C-581/17, EU:C:2019:138). 
22 Moreover, various provisions of the EStG have been extended by the German 
legislature to include Switzerland in recent years, with no supporting decision 
from the Court of Justice.