Opinion of the Advocate General — ECLI:EU:C:1997:556
Date: 1997-11-20
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Anti-discrimination;Non-discrimination on grounds of nationality
Procedure: Reference for a preliminary ruling
Origin: France

Summary of the Judgment
1. EC Treaty — Article 220, second indent — Direct effect — None
(EC Treaty, Art. 220)
2. Freedom of movement for persons — Workers — Equal treatment — Remuneration —
Income tax — Income received in one Member State by nationals of another Member State
— Frontier workers — Application of the provisions of a bilateral convention for the avoid­
ance of double taxation — Permissible
(EC Treaty, Arts 48 and 220)
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SUMMARY — CASE C-336/96
3. Freedom of movement for persons — Workers — Equal treatment — Remuneration —
Income tax — Income received in one Member State by nationals of another Member State
— Application of a tax credit mechanism provided for by a bilateral convention for the avoid­
ance of double taxation — Permissible
(EC Treaty, Art. 48)
1. Article 220 is not intended to lay down a
legal rule directly applicable as such, but
merely defines a number of matters on
which the Member States are to enter into
negotiations with each other 'so far as is
necessary'. Its second indent merely indi­
cates the abolition of double taxation
within the Community as an objective of
any such negotiations.
Thus, although the abolition of double
taxation within the Community is
included among the objectives of the
Treaty, it is clear from the wording of that
provision that it cannot itself confer on
individuals any rights on which they
might be able to rely before their national
courts.
Consequently, the second indent of
Article 220 of the Treaty does not have
direct effect.
2. On a proper construction, Article 48 of
the Treaty does not preclude the applica­
tion of provisions such as those in
Articles 13(5)(a), 14(1) and 16 of the Con­
vention signed in Paris on 21 July 1959
between the French Republic and the
Federal Republic of Germany for the
avoidance of double taxation, as amended
by the protocols signed in Bonn on 9
June 1969 and 28 September 1989, under
which the tax regime applicable to fron­
tier workers differs depending on
whether they work in the private sector
or the public sector and, where they work
in the public sector, on whether or not
they have only the nationality of the State
of the authority employing them, and the
regime applicable to teachers differs
depending on whether their residence in
the State in which they are teaching is for
a short period or not.
The differentiation embodied in such pro­
visions cannot — even though it relates,
as regards public-service remuneration, to
nationality — be regarded as constituting
discrimination prohibited under Article
48 of the Treaty. It flows, in the absence
of any unifying or harmonising measures
adopted in the Community context
under, in particular, the second indent of
Article 220 of the Treaty, from the con­
tracting parties' competence to define the
criteria for allocating their powers of
taxation as between themselves, with a
view to eliminating double taxation.
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GILLY v DIRECTEUR DES SERVICES FISCAUX DU BAS-RHIN
3. On a proper construction, Article 48 of
the Treaty does not preclude the applica­
tion of a tax credit mechanism such as
that provided for in Article 20(2)(a)(cc) of
the Convention between the French
Republic and the Federal Republic of
Germany for the avoidance of double
taxation.
The object of such a provision is simply
to prevent the same income from being
taxed in each of the two States party to
the convention. It is not to ensure that
the tax to which the taxpayer is subject in
one State is no higher than that to which
he or she would be subject in the other. It
is not disputed that any unfavourable
consequences entailed in certain cases by
the tax credit mechanism set up by the
bilateral convention, as implemented in
the context of the tax system of the State
of residence, are the result in the first
place of the differences between the tax
scales of the Member States concerned,
and, in the absence of any Community
legislation in the field, the determination
of those scales is a matter for the Member
States.
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