Opinion of the Advocate General — ECLI:EU:C:2008:362
Date: 2008-06-25
Language of the case: Dutch
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Free movement of capital;Free movement of workers
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary of the Judgment 1. Freedom of movement for persons – Workers – Provisions of the Treaty – Scope ratione personae (Art. 39 CE) 2. Freedom of movement for persons – Workers – Equal treatment – Remuneration – Income tax (Art. 39 EC) 1. The situation of a Community national who, following the transfer of his residence from one Member State of which he is a citizen to another State, works in a Member State other than that of his residence falls, after that transfer, within the scope of Article 39 EC. (see para. 37) 2. Article 39 EC must be interpreted as precluding national legislation pursuant to which a Community national who is not resident in the Member State in which he receives all or almost all of his taxable income cannot, for the purposes of determining the basis of assessment of that income in that Member State, deduct negative income relating to a house owned by him and used as a dwelling in another Member State, whereas a resident of the first Member State may deduct such negative income for the purposes of determining the basis of assessment of taxation of his income. In relation to direct taxation, the situation of residents and the situation of non-residents in a given Member State are not generally comparable, since there are objective differences between them, both from the point of view of the source of the income and from the point of view of their ability to pay tax or the possibility of taking account of their personal and family circumstances. However, in the case of a tax advantage which is not available to a non-resident, a difference in treatment as between the two categories of taxpayer may constitute discrimination where there is no objective difference between the situations of the two which would justify different treatment in that regard. Such is the case particularly where a non-resident taxpayer receives no significant income in his Member State of residence and derives the major part of his taxable income from an activity pursued in the Member State of employment, so that the Member State of residence is not in a position to grant him the advantages which follow from the taking into account of his personal and family circumstances, the discrimination arising from the fact that those circumstances are taken into account neither in the State of residence nor in the State of employment. To the extent that, although residing in one Member State, a person derives most of his taxable income from salaried employment in another Member State and has no significant income in his Member State of residence, he is, for the purposes of taking into account his ability to pay tax, in a situation objectively comparable, with regard to his Member State of employment, to that of a resident of that Member State who is also in salaried employment there. Where a Member State takes into consideration, in determining the basis of assessment of income tax payable by resident taxpayers, negative income from immovable property located in another Member State, it is also required, with regard to residents of the latter Member State who receive all or almost all of their income in the first Member State and who do not have significant income in their Member State of residence, to take into account that negative income for the same purposes. Otherwise the situation of non-resident taxpayers would not be taken into consideration in that regard in either of the two Member States concerned. The difference in treatment at issue in the main proceedings does not arise simply from the disparity between the national tax rules concerned. Even if the Member State of residence allowed losses such as those at issue in the main proceedings to be taken into account for determination of the basis of assessment of income tax of its residents, a taxpayer who receives all or almost all of his income in the Member State of employment would be unable, in any event, to take advantage thereof. With regard to the risk that losses related to a non-resident taxpayer’s immovable property could be taken into account twice, the national legislation in question seeks to avoid that risk becoming reality with regard to resident taxpayers who suffer losses of income relating to a property located in the other Member State, whose situation may be compared with that of a non-resident taxpayer who derives all or most of his income in the Member State concerned. In addition, that Member State may, in cases where the operations of a taxpayer are carried out in part in the territory of a Member State other than that in which he carries out his employed activity, seek from the competent authorities of the other Member State all the information enabling it to establish income taxes correctly, or all the information it considers necessary to ascertain the correct amount of the income tax payable by a taxpayer under the legislation which it applies. Accordingly, such a difference in treatment, which is based on residence, is discriminatory since, while negative property-related income relating to immovable property located in another Member State is taken into consideration by the Member State concerned in determining the basis of assessment of income, in particular work-related income, of taxpayers working and residing in the latter Member State, it cannot be taken into account in the case of a taxpayer who derives all or almost all of his taxable income from salaried activity carried out in that Member State but does not live there. Consequently, such national legislation constitutes an obstacle to the freedom of movement for workers which is, in principle, prohibited by Article 39 EC. (see paras 59-62, 66, 71, 75, 77-80, 84, operative part)