Opinion of the Advocate General — ECLI:EU:C:2005:290
Date: 2005-05-12
Language of the case: Dutch
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Free movement of capital;Social security for migrant workers
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary of the Judgment Free movement of capital — Restrictions — Tax on income from savings and investments — National law allowing entitlement to tax credits in respect of national insurance only to resident taxpayers insured under the national social security system — Whether permissible (Arts 56 EC and 58 EC) Articles 56 EC and 58 EC must be interpreted as not precluding a law of a Member State under which a non-resident taxpayer who receives income in that State only from savings and investments and who is not insured under the social security system of that Member State cannot claim entitlement to tax credits in respect of national insurance, whereas a resident taxpayer who is insured under that social security system is entitled to those credits when his taxable income is calculated, even if he receives only income of that same kind and does not pay social security contributions. Although such legislation is capable of hindering the free movement of capital inasmuch as less favourable tax treatment for non-residents only might deter the latter from investment in that Member State giving income considered to come from savings and investments, it can however be justified, in the light of Article 58(1)(a) EC, by the objective difference between the situation of a person who is insured under the national social security system and that of a person who is not so insured. Further, since Community law does not detract from the power of the Member States to organise their own social security systems, in the absence of harmonisation at Community level it is for the legislation of the Member State concerned to determine the range of insured persons and the level of contributions payable by insured persons to the national social security system and the respective reductions. Further, it falls within the internal process of such a system to allow entitlement to reductions in contributions only to persons liable to pay them, that is to say, persons insured under that system. (see paras 39, 49-51, operative part)