Opinion of the Advocate General — ECLI:EU:C:2003:154
Date: 2003-03-13
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment 
1. Freedom to provide services — Restrictions — Tax legislation — Income taxes — 
Exclusion of non-residents from the right to deduct business expenses — Not 
permissible 
(EC Treaty, Art. 59 (now, after amendment, Art. 49 EC) and Art. 60 (now Art. 50 EC)) 
I - 5933 
SUMMARY — CASE C-234/01 
2. Freedom to provide services — Restrictions — Tax legislation — Income taxes — 
Rate of taxation fixed in relation to the income of non-residents and progressive in 
relation to the income of residents — Whether permissible — Conditions 
(EC Treaty, Art. 59 (now, after amendment, Art. 49 EC) and Art. 60 (now Art. 50 EC)) 
1. Article 59 of the Treaty (now, after 
amendment, Article 49 EC) and 
Article 60 of the Treaty (now 
Article 50 EC) preclude a national 
provision which, as a general rule, 
takes into account gross income when 
taxing non-residents, without deduct­
ing business expenses, whereas resi­
dents are taxed on their net income, 
after deduction of those expenses. 
(see para. 55, operative part) 
2. Article 59 of the Treaty (now, after 
amendment, Article 49 EC) and 
Article 60 of the Treaty (now 
Article 50 EC) do not preclude a 
national provision which, as a general 
rule, subjects the income of non-resi­
dents to a definitive tax at the uniform 
rate of 25%, deducted at source, whilst 
the income of residents is taxed accord­
ing to a progressive table including a 
tax-free allowance, provided that the 
rate of 25% is not higher than that 
which would actually be applied to the 
person concerned, in accordance with 
the progressive table, in respect of net 
income increased by an amount cor­
responding to the tax-free allowance. 
(see para. 55, operative part) 
I - 5934