Judgment — ECLI:EU:C:2009:719
Date: 2009-11-19
Language of the case: Polish
Court formation: Third Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment;Principles, objectives and tasks of the Treaties
Concepts: Direct effect, primacy and uniform application of the Community law;General
Procedure: Reference for a preliminary ruling
Origin: Poland

Summary of the Judgment 1. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Restrictions – Tax legislation – Income tax (Arts 43 EC and 49 EC) 2. Community law – Primacy – Contrary national law – Existing rules automatically inapplicable 1. Articles 43 EC and 49 EC preclude national legislation under which the possibility for a resident taxpayer to obtain, first, a deduction from the basis of assessment in the amount of social security contributions paid in the tax year and, second, a reduction of the income tax which he is liable to pay by the amount of health insurance contributions paid in that period, exists solely when those contributions are paid in the Member State of taxation, while such advantages are refused in the case where those contributions are paid in another Member State, even though those contributions were not deducted in that other Member State. Such legislation introduces a difference in the treatment of resident taxpayers. Any taxpayer who is resident in the Member State of taxation but pursues his economic activity in another Member State in which he is subject to compulsory social insurance and health insurance cannot deduct the amount of the contributions which he pays from his basis of assessment or to reduce the tax payable in the Member State of taxation by the amount of those contributions, and is therefore less favourably treated than any other taxpayer who is resident in that State but who restricts his economic activity to within the borders of that State and pays his compulsory social security and health insurance contributions to the competent public authority of that State. With regard to the taxation of their income in the Member State of taxation, however, resident taxpayers are not in objectively different situations capable of justifying such a difference in treatment according to the place in which contributions are paid, since they are subject to an unlimited tax liability in that Member State. Thus, the taxation of their income in that Member State should be carried out in accordance with the same principles and, consequently, on the basis of the same tax advantages. In those circumstances, the refusal to grant to the resident taxpayer the tax advantages in question may deter that taxpayer from taking advantage of the freedom of establishment and freedom to provide services under Articles 43 EC and 49 EC, and amounts to a restriction on those freedoms. (see paras 66-71, 74, operative part 1) 2. To the extent that Community law prevails over provisions of national law, the primacy of Community law obliges the national court to apply Community law and to refuse to apply conflicting provisions of national law, irrespective of the judgment of the national constitutional court which has deferred the date on which those provisions, held to be unconstitutional, are to lose their binding force. (see para. 85, operative part 2)