Provisional text
OPINION OF ADVOCATE GENERAL
EMILIOU
delivered on 23 April 2026 (1)
Case C‑275/25 [Kolwager] (i)
Finanzamt B
v
A
(Request for a preliminary ruling from the Bundesfinanzhof (Federal Fiscal Court, Germany))
( Reference for a preliminary ruling — Protocol on the privileges and immunities of the European Union — Article 13 — Gift tax — Domicile for tax purposes of officials and other servants of the Union — Additional residence — Article 21 — Staff members of the European Investment Bank )
I.      Introduction
1.        The present request for a preliminary ruling from the Bundesfinanzhof (Federal Fiscal Court, Germany) concerns the interpretation of Article 13 of Protocol (No 7) on the privileges and immunities of the European Union (‘the PPI’). (2)
2.        That provision occupies a particular position within the PPI, as it grants neither a privilege nor an immunity per se; (3) rather, it lays down a rule on the determination of tax domicile for Union officials. (4) More specifically, Article 13 of the PPI creates a legal fiction whereby an official of the Union who, solely by reason of the performance of his or her duties, establishes a residence in a Member State other than the Member State of his or her tax domicile is deemed, in both Member States, to have maintained that original tax domicile, for the purposes of income tax, wealth tax and death duties.
3.        The referring court’s request has arisen in the context of a dispute between German tax authorities and A., a staff member of the European Investment Bank (EIB), who, while working and residing in Luxembourg and maintaining his original tax domicile in Austria by virtue of Article 13 of the PPI, established an additional residence in Germany. Following the receipt of a substantial monetary gift from a relative residing in Austria, the German tax authorities imposed a gift tax on A., on the ground that he was tax resident (5) in Germany at the material time. A. successfully challenged that assessment at first instance, relying on Article 13 of the PPI (which applies to EIB staff members by virtue of Article 21 PPI), (6) in order to argue that he must be regarded, for tax purposes, as domiciled solely in Austria, where he resided prior to joining the service of the EIB.
4.        Hearing the case on appeal, the Bundesfinanzhof (Federal Fiscal Court) now seeks clarification on the precise scope of Article 13 of the PPI. It asks, in particular, whether that provision applies in the case of a gift tax and, if so, whether it precludes the recognition of an additional tax domicile in a Member State other than that of employment or of the original tax domicile.
II.    Legal framework
A.      European Union law
5.        The first sentence of the first paragraph of Article 13 of the PPI (hereafter referred to simply as ‘Article 13 of the PPI’) provides as follows:
‘In the application of income tax, wealth tax and death duties and in the application of conventions on the avoidance of double taxation concluded between Member States of the Union, officials and other servants of the Union who, solely by reason of the performance of their duties in the service of the Union, establish their residence in the territory of a Member State other than their country of domicile for tax purposes at the time of entering the service of the Union, shall be considered, both in the country of their actual residence and in the country of domicile for tax purposes, as having maintained their domicile in the latter country provided that it is a member of the Union.’
6.        The first paragraph of Article 21 PPI reads as follows:
‘This Protocol shall also apply to the European Investment Bank, to the members of its organs, to its staff and to the representatives of the Member States taking part in its activities, without prejudice to the provisions of the Protocol on the Statute of the Bank.’
B.      German law
7.        The Erbschaftsteuer- und Schenkungsteuergesetz (Law on inheritance and gift tax), in the version applicable at the material time, provides in Paragraph 1, under the heading ‘Taxable events’:
‘(1) Inheritance tax (gift tax) shall apply to:
1. transfers on death;
2. gifts inter vivos;
3. restricted gifts;
…
(2) Unless provided otherwise, the provisions of the present Law relating to the transfer of assets on death shall apply also to gifts and restricted gifts …’.
8.        According to Paragraph 2 of the same law, unlimited tax liability (in respect of the entirety of the assets transferred) applies, inter alia, where the acquirer, at the time of the taxable event, is a resident for tax purposes. Persons deemed to be residents for tax purposes include natural persons whose place of residence or habitual abode is in Germany.
9.        Under Paragraph 8 of the Abgabenordnung (Fiscal Code), in the version applicable at the material time, ‘a person has a place of residence where he or she occupies a dwelling under circumstances that indicate that he or she will maintain and use that dwelling’.
III. The dispute in the main proceedings and the questions referred for a preliminary ruling
10.      A., the respondent in the main proceedings (‘the respondent’), has been an EIB staff member since 1995. In order to take up his duties at the EIB, he moved from Austria, where he previously resided, to Luxembourg. In 2010, the respondent established a joint household with his spouse, another EIB staff member, at her house in Germany. He nevertheless also continued to use his apartment in Luxembourg.
11.      On 27 December 2013, the respondent received a gift of cash in the amount of EUR 300 000 from his brother, who resides in Austria.
12.      By notice of 13 April 2017, the Finanzamt B (Tax Office B, Germany; ‘the Tax Office’) imposed gift tax on the respondent, in respect of that gift, amounting to EUR 56 000.
13.      The respondent lodged an administrative appeal claiming that, by virtue of Article 13 of the PPI, he should be treated as having his tax domicile solely in Austria and thus accordingly not be subject to the gift tax in question in Germany. The Tax Office dismissed that appeal on 1 August 2019, holding that, at the time of receipt of the gift, the respondent had a place of residence in Germany (within the meaning of Paragraph 8 of the Fiscal Code) and, on that basis, was considered a tax resident subject to unlimited tax liability, pursuant to Paragraph 2 of the Law on inheritance and gift tax. It took the view that Article 13 of the PPI governs solely the allocation of tax domicile between the Member State of original tax domicile and the Member State where the official performs his or her duties (‘the State of employment’), and does not cover a situation, such as the one at issue, in which an official establishes an additional residence in a third Member State, for purely private reasons. Essentially, the Tax Office considered that, by taking up a residence in Germany, the respondent had established a tax domicile there, which existed in parallel to the fictitious domicile in Austria provided for under Article 13 of the PPI. Since Austria does not levy gift tax, the Tax Office concluded that the gift could be taxed in full in Germany, as there was no competing taxation. (7)
14.      The respondent subsequently lodged an action before the Finanzgericht Rheinland-Pfalz (Finance Court, Rhineland-Palatinate, Germany) against the Tax Office’s decision. By judgment of 16 September 2021, that court upheld the action. It held, in particular, that the decisive factor for determining a Union official’s tax domicile under Article 13 of the PPI is the situation of the official at the time of entering the service of the Union. Accordingly, it is sufficient that, at that point, the official established a residence in another Member State solely by reason of the performance of his or her duties. Subsequent developments, such as the establishment of an additional residence for private reasons, were considered immaterial, provided that the official remained in the Union’s service and the actual residence retained a geographical connection to the place of employment. On that basis, the respondent – who remained an EIB staff member and resided approximately 55 kilometres from his place of work in Luxembourg – was deemed to be domiciled for tax purposes exclusively in Austria, the Member State of his original tax domicile, pursuant to Article 13 of the PPI. (8)
15.      The Tax Office appealed against that judgment before the referring court. By its appeal, the Tax Office claims that Article 13 of the PPI is not applicable in the present case, because (i) it does not cover gift tax and (ii) it governs only the allocation of taxing powers between the State of employment and that of original tax domicile, excluding situations, such as the one at issue, where an additional residence has been set up in a third Member State for private reasons.
16.      Against that background, the referring court, entertaining doubts as to the interpretation of Article 13 of the PPI, decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)      Does [Article 13 of the PPI] apply to the levying of gift tax?
(2)      If the first question referred is answered in the affirmative: does [Article 13 of the PPI] preclude an official or other servant of the Union who establishes his or her residence in the territory of a Member State other than his or her Member State of origin solely by reason of the performance of his or her duties in the service of the Union from establishing an additional domicile for tax purposes in a Member State other than the State in which he or she performs his or her duties if, at the same time, he or she retains an actual residence in the State in which he or she performs his or her duties?’
17.      The respondent, the German Government and the European Commission submitted written observations. No hearing was held.
IV.    Analysis
18.      By its two questions, the referring court seeks clarification as to the scope of Article 13 of the PPI, as regards both the types of taxes covered and the situations of residence falling within its ambit. I shall examine these questions in turn, concluding, as regards the first question, that Article 13 of the PPI must be interpreted as covering gift tax (B) and, as regards the second question, that said provision is applicable in the event of an additional residence outside the State of employment only in so far as that residence was established solely by reason of the performance of the official’s duties (C).
19.      Before entering into that analysis, however, I consider it useful to make certain preliminary remarks regarding Article 13 of the PPI (A).
A.      Preliminary remarks on Article 13 of the PPI
20.      At the outset, it should be recalled that, as a Protocol to the EU Treaties, the PPI forms an integral part thereof and thus constitutes primary law of the Union. Moreover, although direct taxation remains, in principle, within the competence of the Member States, those States have, in essence, through the tax-related provisions of the PPI, conceded a partial restriction of their fiscal sovereignty in the interests of ensuring the proper functioning of the Union. (9) In relation to Union officials in particular, this is notably the case with Articles 12 and 13 of the PPI.
21.      Under Article 12 PPI, Union officials are exempt from national taxes on their salaries, wages and emoluments paid by the Union and are instead subject to a tax levied at Union level.
22.      With respect to other taxes, however, Union officials remain, in principle, subject to taxation by Member States. In that regard, Article 13 of the PPI lays down what is essentially a double taxation rule (10) that determines the tax domicile of officials.
23.      More precisely, as noted above, Article 13 of the PPI establishes, in respect of certain taxes, a legal fiction whereby officials are deemed to have remained tax residents in the Member State of their original tax domicile (‘the State of origin’), notwithstanding the fact that they have established an actual residence in another Member State by reason of their employment (‘the State of residence for employment purposes’). As such, that provision does not determine and divide taxation powers per se between the Member States concerned. Nevertheless, since tax domicile constitutes, in many respects, the primary nexus for the imposition of taxation (notably as regards worldwide income and overall tax liability), it inevitably exerts a decisive influence on the allocation of the relevant powers of taxation between those States. (11)
24.      In practical terms, this generally entails that, save for salaries, wages and emoluments paid by the Union, the State of origin retains, in principle, unlimited tax liability, (12) with respect to – in the terms of Article 13 of the PPI – income tax, wealth tax and death duties (which I shall hereafter refer to as ‘inheritance tax’). (13)
25.      That said, it must be emphasised – particularly in the light of certain apparent misunderstandings in the written observations submitted to the Court – that the foregoing does not mean that, under Article 13 of the PPI, the State of origin has exclusive competence to levy the aforementioned taxes. Tax residence is but one of several connecting factors employed by Member States in the exercise of their fiscal jurisdiction. Accordingly, Article 13 does not preclude Union officials from being subject to taxation in the State of residence for employment purposes (or in other Member States) on the basis of other connecting factors, such as the source of income or the situs of assets. (14) Where that could give rise to double taxation, relief would, in principle, be secured through applicable double taxation conventions or, as the case may be, through national unilateral measures.
26.      Against that background, I shall now turn to the substance of the questions referred.
B.      Does Article 13 of the PPI apply to gift tax?
27.      As stated above, by its first question the referring court asks whether Article 13 of the PPI applies to gift tax.
28.      According to the wording of that provision, the legal fiction which it creates takes effect ‘in the application of income tax, wealth tax and [inheritance tax] and in the application of conventions on the avoidance of double taxation’. As noted by the referring court, gift tax is not expressly referred to therein. The German Government accordingly submits that the provision is clear and unambiguous in excluding gift tax from what it regards as an exhaustive enumeration of taxes, such that the Court cannot depart from that interpretation.
29.      I must observe here, first of all, that ‘gift tax’ is understood differently across the Member States. In certain Member States, it is considered a subcategory of income tax; (15) in many others, it is treated akin to inheritance tax and regarded as an anticipatory form thereof or as an inextricable complement thereto. (16) In several jurisdictions, gifts made within a specified period prior to the donor’s death are re-characterised, for tax purposes, as inheritances. (17) From that perspective, whilst the inclusion of gift tax within the scope of Article 13 of the PPI may not be immediately apparent from the wording of that provision, its exclusion is far from unequivocally dictated by that wording.
30.      This leads me to a second point: the German Government has argued against the inclusion of gift tax within the scope of Article 13 of the PPI, by reference to the concept and nature of that tax under German law. (18) However, the diversity of approaches in the various Member States as regards the classification and denomination of taxes (including gift tax) demonstrates, in my view, that Article 13 of the PPI cannot be interpreted by reference to national law.
31.      It is true that, in one of its relatively few judgments concerning – what is now – Article 13 of the PPI, the Court appeared to look to national law in identifying whether a tax was covered by that provision. It held, in particular, that ‘with regard to income tax … what constitutes income tax for the purpose of [Article 13 of the PPI] must be determined according to the criteria of the national law applicable.’ (19) Nonetheless, I respectfully submit that an interpretation grounded in national classifications would give rise to considerable difficulties.
32.      Firstly, it is unclear which national law should be determinative: that of the State of origin or that of the State of residence for employment purposes, where those laws differ in their understanding and classification of a given tax. If, for example, the legal system of one of those States considers gift tax to be a type of income tax, while the other regards it as wholly distinct, the applicability of Article 13 of the PPI, with respect to the same Union official, would differ depending on which domestic classification is followed.
33.      Secondly, and in any event, reliance on national law (be it of the State of origin or of the State of residence for employment purposes) would result in the scope of Article 13 of the PPI varying from one Member State to another. As the Commission has correctly observed, this would undermine the uniform application of the primary law that is Article 13 of the PPI, the need for which has been expressly recognised by the Court. (20) It would also lead to Union officials being treated differently, with that article applying for some but not for others, depending on the specificities of the national tax systems at issue. (21) From a practical standpoint, this approach would also entail significant complications for national tax authorities, which would be required to determine tax domicile differently for each official depending on the tax in question and on potentially competing national classifications – raising, moreover, delicate questions as to competence in that regard.
34.      Thirdly, as Advocate General Jacobs observed in his Opinion in Kristoffersen, (22) an interpretation of Article 13 of the PPI that is dependent on national law would leave ample room for circumvention. For instance, a State of origin could seek to bring a tax within the scope of Article 13 of the PPI (and thus claim tax residence), merely by designating it as one of the taxes expressly referred to therein. Conversely, a State of residence for employment purposes could evade the application of that provision by artificially classifying as a distinct category a tax which nevertheless essentially functions as income, wealth or inheritance tax.
35.      In view of the foregoing, I agree with the Commission – and with what was stated in the Opinion in Kristoffersen – that the terms ‘income tax’, ‘wealth tax’ and ‘[inheritance tax]’ in Article 13 of the PPI cannot depend on national law, but must be interpreted autonomously in accordance with their general understanding and in the light of the purpose of that provision.
36.      The general understanding of those terms does not conclusively resolve the present question. As the referring court has observed, gift tax displays both similarities to, and differences from, the taxes listed in Article 13 of the PPI. It is, in particular, a tax on enrichment arising from a gratuitous transfer, thereby sharing features with both income tax (in the broad sense of taxing increases in economic wealth) and inheritance tax (as a tax on transfers without consideration). It, however, differs from the former, notably in that it is not linked to the creation of value in the market, and from the latter, in that it concerns inter vivos transfers, the precise timing of which can be arranged, contrary to mortis causa transfers.
37.      The purpose of Article 13 of the PPI is therefore decisive in determining whether gift tax falls within the scope of that provision.
38.      In that regard, I note that the overarching objective of the PPI, as reflected in its sole recital and in Article 343 TFEU, (23) as well as in Article 17 PPI, (24) is to ensure that the Union benefits from the privileges and immunities that are necessary for the performance of its tasks.
39.      In line with that objective, Article 13 of the PPI must be understood as also pursuing two specific purposes, both of which stem from the fact that, whilst Union officials are recruited from all Member States, their places of employment are located in specific Member States, concentrated notably in Belgium and Luxembourg, where most EU institutions have their seat.
40.      First, Article 13 of the PPI seeks to prevent the host Member States from acquiring an undue fiscal advantage through the exercise of unlimited powers of taxation (save for consumption and other locally linked taxes) over Union officials, who would not be residing in their territory were it not for their official duties. Conversely, it ensures that the States of origin are not unduly deprived of their taxation powers over individuals who would have otherwise remained fiscally domiciled there. (25)
41.      Secondly, as regards Union officials themselves, Article 13 of the PPI seeks to ensure neutrality, so that their entry into the service of the Union places them neither at a disadvantage nor at an advantage, in terms of tax domicile. By preserving their pre-existing fiscal status quo, the provision facilitates mobility, mitigates the risk of double taxation linked to residence, and removes administrative complexities linked to relocation for the purposes of serving the Union.
42.      That logic finds a close parallel in public international law, notably in the Convention on the Privileges and Immunities of the United Nations, (26) the most prominent multilateral instrument in the field of the privileges and immunities of international organisations, their officials and representatives already in force at the time of the adoption of the PPI in 1957. Section 13 of that convention provides that ‘where the incidence of any form of taxation depends upon residence, periods during which the representatives of Members to the … organs of the United Nations and to conferences convened by the United Nations are present in a state for the discharge of their duties shall not be considered as periods of residence’ (emphasis added). That provision, which has been replicated in numerous subsequent international instruments, (27) has, in principle, the same effect as Article 13 of the PPI of precluding the establishment of a tax domicile in the host State and maintaining the tax domicile in the State of origin. The underlying rationale is identical: presence in a host State by reason of official duties should not give rise to a change in tax residence. (28)
43.      Having regard to the above, the ratio legis of Article 13 of the PPI is, in my view, to prevent the establishment of a tax domicile in the host Member State, in respect of those taxes which depend, primarily or to a significant extent, on residence, considering that officials are not present in that State by personal choice but merely due to their employment in the service of the Union.
44.      In the light of the foregoing, the reference in Article 13 of the PPI to ‘income tax’, ‘wealth tax’ and ‘[inheritance tax]’ must, in my view, be understood not as a rigid enumeration of three narrowly defined taxes, but as a broad reference to the three principal categories of direct taxation on earning, holding and transfer of wealth, the incidence of which is linked to residence. By contrast, taxes lacking such a connection – such as consumption taxes or certain transaction-based levies – fall outside the scope of Article 13 of the PPI.
45.      Within that taxonomy of residence-based direct taxation, it is, to my mind, evident that gift tax, as a direct tax on the gratuitous transfer of wealth that is typically linked to the residence of the donor or the beneficiary, belongs to the same conceptual framework and therefore falls squarely within the abovementioned categories of tax covered by Article 13 of the PPI. For the purposes of that provision, and having regard to its objectives, gift tax is, in my view, best understood as forming part of the broader category of taxation of gratuitous transfers, alongside inheritance tax. Both taxes share an identical economic function, namely the taxation of transfers of wealth without consideration; gift tax may thus be seen as the inter vivos counterpart of inheritance tax, forming part of a coherent functional unity.
46.      In the light of the above, I am of the view that gift tax must be regarded as falling within the scope of Article 13 of the PPI. There is, in my opinion and having regard to the ratio legis of that provision, no persuasive reason to exclude a tax which, like inheritance tax, is levied on gratuitous transfers of assets and whose incidence is closely tied to residence. To do so would introduce a distinction that is not based on any relevant objective factors and would lead to a fragmentation of tax domicile, with the result that a Union official would be subject to one domicile specifically for gift tax and to another for other taxes. Such an outcome would be inefficient for both officials and tax authorities and thus contrary to the objective of facilitating the work of officials and thereby the functioning of the Union.
47.      For the sake of completeness, I would observe that the absence of any express reference to gift tax in Article 13 of the PPI appears to be attributable primarily to historical considerations. The wording of that provision has remained unchanged in substance since its adoption in 1957 – as is largely the case with the PPI as a whole. It is understood that, at that time, gift tax was either less prevalent or was subsumed under income or inheritance tax, like it is today. (29) Moreover, the early model conventions on the avoidance of double taxation in force at the time of the adoption of the PPI – designed, inter alia, to resolve conflicts of tax residence – concerned precisely the three broad categories of taxation referred to in Article 13 of the PPI. (30)
48.      As a final point, I would add that the interpretation of Article 13 of the PPI set out above is arguably corroborated by the reference therein to ‘the application of conventions on the avoidance of double taxation’. That reference appears intended to ensure that the legal fiction established by Article 13 of the PPI is respected also in the operation of such conventions. I note, in that regard, that double taxation conventions between Member States are largely based on the OECD Tax Convention Models (31) and primarily concern taxes on income and capital and, more rarely, inheritance and gift taxes. (32) Therefore, where, for instance, the State of origin and the State of residence for employment purposes have concluded a double taxation convention which covers gift tax, the State of origin would, in the application of that convention, be regarded as the State of tax domicile also with respect to such tax. It would, however, in my view, be incoherent to conclude that gift tax generally falls outside the scope of Article 13 of the PPI, yet might nonetheless be brought within it indirectly through bilateral conventions which happen to expressly include such tax. Such an approach would render the scope of the provision contingent upon the existence and content of bilateral agreements, thereby undermining its uniform application.
49.      In view of all the foregoing considerations, I propose that the Court answer the first question to the effect that Article 13 of the PPI must be interpreted as applying to gift tax.
C.      Does Article 13 of the PPI apply to an additional residence situated in a Member State other than the State of employment which has been established for private reasons?
50.      Should Article 13 of the PPI be interpreted as applying to gift tax, then the referring court also asks whether that provision precludes the establishment of an additional tax domicile in a Member State other than the State of origin or the State of employment, if the official concerned also maintains an actual residence in the State of employment. In essence, the referring court seeks to ascertain whether a Union official, who maintains a notional tax domicile in his or her State of origin under Article 13 of the PPI and an actual residence in the State of employment, may nevertheless establish an additional tax domicile in a third Member State and thereby become subject to taxation there.
51.      It is worth noting how differently the interested parties which have submitted observations approach this question.
52.      The German Government argues that Article 13 of the PPI governs only the relationship between the State of origin and that of residence for employment purposes, and that it therefore does not preclude the establishment of an additional tax domicile elsewhere.
53.      By contrast, the respondent contends that said provision establishes a single, exclusive tax domicile in the State of origin and thus precludes the emergence of any other tax domicile within the European Union for the entire duration of an official’s career.
54.      The Commission, for its part, adopts an intermediate position. It submits that Article 13 of the PPI precludes the establishment of an additional tax domicile in a Member State other than the State of origin, provided however that the Union official concerned resides at such a distance from the place of employment that he or she is not hindered in the performance of his or her duties.
55.      In order to provide a useful answer to the question referred, I shall first explain why, in my view, Article 13 of the PPI precludes the establishment of a tax domicile only in a Member State where residence was established solely by reason of the performance of the official’s duties, and not in other Member States (1). I shall then examine more precisely how that condition – namely, that the residence must have been established solely by reason of the performance of those duties – is to be interpreted (2). Lastly, I shall set out the implications of that interpretation for residences established in addition to an existing residence in the Member State of employment (3).
1.      Article 13 of the PPI as a rule of allocation of taxation powers between specific Member States
56.      According to the wording of Article 13 of the PPI, officials are to be regarded as maintaining their original tax domicile ‘both in the country of their actual residence and in the country of domicile for tax purposes’. It follows, as the Court has previously indicated, (33) that that provision is meant to govern the relationship and allocation of taxation powers only between those two Member States, namely the State of origin and the State of residence for employment purposes.
57.      That reading is also borne out by the purpose of Article 13 of the PPI, which, as explained above, is essentially to neutralise the tax consequences – both for Union officials and for the Member States concerned – of the relocation of residence required by employment in the service of the Union. It follows that, as will further be discussed below, that provision is confined to situations arising from such employment-related relocation and does not concern residences established independently of it.
58.      It follows that, as the German Government has argued, Article 13 of the PPI cannot be construed as regulating, still less as precluding, the exercise of taxation powers by a third Member State and the establishment of a tax residence under the criteria of its domestic law.
59.      That is not to suggest that the legal fiction created by that provision is devoid of relevance with respect to other Member States. Since that fiction operates both in the State of origin and in the State of residence for employment purposes, those States must also maintain that fiction vis-à-vis third Member States, with the result that, as between the two, the State of origin alone is to be regarded as the official’s tax domicile, to the exclusion of the State of residence for employment purposes. That does not, however, preclude those third Member States from also considering the official to be their own tax resident pursuant to their domestic rules, just as they would with respect to any other (non-notional) tax resident in the State of origin. As the referring court has observed, any conflicts arising in that regard fall, where appropriate, to be resolved through conventions on the avoidance of double taxation or comparable mechanisms.
60.      The above reading is not called into question by the case-law relied upon by the respondent and by the Commission. In particular, in its judgment in X, (34) the Court held that the division of taxation powers established by Article 13 of the PPI would be compromised if an official had the free choice to move his tax domicile to a State other than that of his or her original tax domicile. On that basis, the Court concluded that, under Article 13 of the PPI, an official’s tax domicile cannot depend on his or her volition.
61.      Both the respondent and the Commission (and, provisionally, also the referring court) infer from that case-law that the establishment of any tax domicile other than in the State of origin is categorically precluded, meaning that that State remains, in all circumstances and irrespective of the establishment of other residences, the sole tax domicile of the official.
62.      However, that reading overlooks the context and precise scope of the Court’s ruling. In the judgment in X, (35) the question at issue was, in essence, whether an official could choose to be domiciled in the State of residence for employment purposes, rather than in the State of origin, thereby setting aside the legal fiction established by Article 13 of the PPI. The Court correctly rejected such a possibility, considering that that provision is a rule laid down solely in the interests of the Union (36) – and hence not a personal privilege capable of being waived by the official concerned.
63.      Properly understood, that case-law establishes, on the one hand, that the tax domicile in the State of origin cannot be displaced by the will of the official, who remains bound by the fiction of Article 13 of the PPI, (37) and, on the other hand, that the State of employment cannot acquire the status of tax domicile, where residence there is solely employment-related. It does not follow, however, that outside the sphere of that employment-related residence which Article 13 of the PPI concerns, an official is precluded from establishing genuine links with other Member States that may, under those States’ domestic law, give rise to an additional tax domicile.
64.      Furthermore, contrary to the Commission’s submissions, the possibility of establishing a further tax domicile in a third Member State would not deprive Article 13 of the PPI of its purpose. The Commission argues in that regard that an official could change their tax domicile, thus discarding the fiction established by that provision, simply by establishing a supplementary residence. However, as explained above, the notional tax residence under Article 13 of the PPI would not be replaced, but would continue to exist in parallel with the additional tax domicile. (38) The Commission’s reasoning appears, implicitly, to rest on the premiss that an individual may have only a single tax domicile. That, however, does not reflect the reality of international tax law. Situations in which several States simultaneously assert tax residence in respect of the same individual, on the basis of their respective domestic criteria, are neither rare nor anomalous; they are, rather, the very situations which conventions for the avoidance of double taxation are, inter alia, designed to address.
65.      It must therefore be concluded that Article 13 of the PPI precludes the establishment of a tax domicile only in the Member State that constitutes the official’s State of residence for employment purposes, and not in any other Member State. Accordingly, that provision does not prevent a Member State other than the State of residence for employment purposes from treating a Union official as its own tax resident under its domestic law.
66.      With respect to the present case, this means that the establishment of a tax domicile for the respondent in Germany on the basis of the residence he has set up there would be precluded only if that residence constitutes a residence for employment purposes or, to use the wording of Article 13 of the PPI more precisely, if it was established solely by reason of the performance of his duties in the service of the Union.
2.      A residence ‘solely by reason of the performance of [the official’s] duties in the service of the Union’
67.      Bearing the above in mind, I must, therefore, now turn to the crucial condition for the application of Article 13 of the PPI: whether a residence in a Member State other than the State of origin has been established ‘solely by reason of the performance of [the official’s] duties in the service of the Union’. It is only where that condition is satisfied that the Member State is precluded from treating the official as a tax resident. That condition calls for a number of clarifications, which I shall address in turn below.
(a)    State of employment or of residence for employment purposes?
68.      It is first necessary to clarify, in case it has not already become apparent, that Article 13 of the PPI does not require, in order for the notional tax domicile in the State of origin to apply, that the official establish his or her residence in the territory of the State of employment per se (that is to say, the State in which the seat or other offices of the employing institution or body are located). That provision merely refers to a residence established ‘in the territory of a Member State other than [the official’s original] country of domicile for tax purposes’ (emphasis added).
69.      Certainly, the effective performance of one’s duties will ordinarily – and at least where a role is not fully digitalised – require a degree of geographical proximity to the place of employment. Nonetheless, where that requirement is satisfied, particularly in the light of short cross-border commuting distances, it cannot be ruled out that an official may establish residence in a Member State other than the State of employment. That is notably so in relation to Luxembourg, where it is in fact commonplace for officials to reside in the border regions of neighbouring Member States (Belgium, Germany or France) while performing their duties in Luxembourg.
70.      That reading is further supported by the rules governing the employment of officials. Notably, Article 20 of the Staff Regulations of Officials of the European Union (‘the EU Staff Regulations’) requires officials to ‘reside either in the place where [they are] employed or at no greater distance [therefrom] as is compatible with the proper performance of [their] duties’ (emphasis added). Likewise, the EIB Staff Regulations, which apply in the case of the respondent, provide in Article 10 that ‘save with special permission, members of staff shall be required to reside at or near their place of employment’ (emphasis added).
71.      The Commission appears to consider that what constitutes a residence for employment purposes should be determined in the light of the aforementioned residence requirements for officials. For the Commission, therefore, a residence for employment purposes, in respect of which Article 13 of the PPI applies, would be any residence situated at such a distance from the official’s place of employment as does not hinder the proper performance of his or her duties.
72.      I agree with the Commission that the residence requirements imposed upon officials are relevant in determining whether a residence is connected to the performance of duties. Nevertheless, in my view, a geographical criterion of proximity is neither sufficient nor always necessary. A residence may be geographically close yet unrelated to employment, or conversely more distant yet authorised under specific arrangements – as appears possible, for example, under the EIB Staff Regulations, which allow, by way of exception, residence elsewhere with special permission. Moreover, a vague criterion of proximity risks being difficult for national authorities to apply in a consistent manner and may give rise to divergent interpretations of the PPI.
73.      Hence, in my view, in order for a residence to be regarded as a residence for employment purposes it is necessary that it be the residence declared to and recorded by the employing institution or body as the place of residence of the official for the purposes of compliance with the relevant Union employment requirements. (39) That criterion provides a more objective and administrable basis for assessment, the implementation of which would be facilitated by Article 18 PPI, a provision that requires Union institutions to cooperate with national authorities for the implementation of the PPI.
74.      That said, Article 13 of the PPI does not merely require that residence be connected to employment, but more specifically, that it were established ‘solely by reason of the performance of duties’ (emphasis added). It is therefore necessary to examine the nature and intensity of that condition.
(b)    The meaning of ‘solely by reason of the performance of [the official’s] duties’
75.      In order to properly construe the meaning of the condition ‘solely by reason of the performance of [the official’s] duties’, reference must again be made to the objective of the PPI in general and the purpose of Article 13 thereof specifically (see points 38 to 41 above). In that regard, I note that the Court has consistently held that the privileges and immunities under the PPI have a purely functional character, inasmuch as they are intended to avoid any interference with the functioning and independence of the Union. This entails, in particular, that the privileges, immunities and facilities accorded to officials are done so solely in the interests of the latter. (40) In that framework, as mentioned above, Article 13 of the PPI seeks to neutralise the tax consequences of mobility that is necessitated by employment in the service of the Union, and nothing more.
76.      In that context, the expression ‘solely by reason of the performance of [the official’s] duties’ must be understood as referring to situations in which the official would not have established residence in another Member State but for the requirements of his or her duties, that is to say, were it not for his or her employment in the service of the Union.
77.      A clarification is, however, warranted. In my opinion, the term ‘solely’ cannot be interpreted as requiring a form of absolute or pure causation, devoid of any ancillary considerations. Such a reading would render the provision largely inoperative, given that decisions concerning employment and relocation are, in reality, almost always informed by a range of personal, financial or practical considerations.
78.      What matters, rather, is whether the performance of duties constitutes the decisive and determining reason for the establishment of residence. In my view, the presence of additional considerations – such as the cost of living, family or social ties, or personal convenience – does not, in itself, displace the application of Article 13, provided that the official would not have established residence in that Member State but for his or her employment with the Union. That, in my opinion, is the crucial ‘test’. Admittedly, such an assessment may prove difficult in practice. That is why, in its judgment in X, the Court held that mere intentions of an official with respect to residence cannot be taken into account, but rather what is required is objective proof that the official concerned would have transferred his or her domicile to the Member State at issue ‘irrespective of entering the service of the [Union]’. (41) To my mind, such objective proof might consist, for example, in the prior acceptance of an alternative offer of employment in that Member State, accompanied by concrete steps towards relocation, such as the making of housing arrangements, before the official ultimately chose instead to enter the service of the Union.
79.      On that point, I note that the German Government has stressed that the respondent in the present case established his residence in Germany for private reasons. However, no information has been provided in the observations or the order for reference in that regard, other than that the respondent established a joint household with his spouse at her house in Germany. The relevant determination would be for the referring court to make, in the light of all the factual circumstances before it. Nonetheless, I must note that, in view of what has been analysed above, I see no principled basis for distinguishing between officials who choose to reside in a neighbouring Member State for reasons of cost or personal preference and those who do so in view of the convenience of a spouse’s existing house in a nearby location, if in both cases the decisive factor was the need to reside within a reasonable distance of the place of employment so as to enable the proper performance of duties. The relevant criterion, in both situations, is whether the residence would have been established in the absence of those duties. To hold otherwise would risk introducing unequal treatment between officials without objective justification, as has been argued, in essence, by the respondent and the Commission.
(c)    The temporal scope of that condition
80.      I turn now to the temporal dimension of that condition. The respondent, and to a certain extent also the referring court and the Commission, appear to consider that the condition of establishment of a residence ‘solely by reason of the performance of [the official’s] duties’ need only be satisfied at the time of entry into service and that any subsequent residences established, irrespective of the reason, would nevertheless fall within the scope of Article 13 of the PPI, so long as the official continues to be employed in the service of the Union.
81.      In support of that view, reliance is placed notably on the reference in Article 13 of the PPI to the ‘time of entering the service of the Union’. However, that reference is used therein merely to identify the State of origin, that is to say, the ‘country of domicile for tax purposes at the time of entering the service of the Union’ (emphasis added) and thus serves solely to determine which Member State’s tax domicile is to be preserved by virtue of the legal fiction established by that Article 13. It does not imply that any and all subsequent residences in other Member States established during the official’s career automatically fall within the scope of that provision. On the contrary, subsequent residences established in other Member States during a staff member’s career must still be assessed against the criterion of whether they were established ‘solely by reason of the performance of [the official’s] duties’ in order for Article 13 of the PPI to apply. This holds true both for changes of residence (for example, where an official changes posts and moves from Luxembourg to Belgium) and for additional residences, to which I shall now turn more specifically.
3.      Applying Article 13 of the PPI to additional residences
82.      In view of the foregoing considerations, it remains to be examined, more specifically, for the purposes of the second question referred, whether Article 13 of the PPI applies in situations where an official maintains more than one residence, in particular where an additional residence is established alongside a residence in the State of employment.
83.      In that regard, it follows from the interpretation set out above that Article 13 of the PPI is capable of applying to any residence which serves as a residence for employment purposes – or, more precisely, satisfies the condition of having been established solely by reason of the performance of duties. That provision does not, in my view, limit such a residence to a single Member State. Accordingly, where an official maintains more than one residence and several of them meet that condition, each of those residences may fall within the scope of Article 13 of the PPI. Consider, for example, the case of an EIB staff member who, in addition to residing in Luxembourg, establishes a residence in Madrid solely because he is frequently required to work on projects in Spain or at the EIB office there. In such a case, both residences would, in my view, fall within the scope of Article 13 of the PPI.
84.      By contrast, a residence established for reasons unrelated to the performance of duties falls outside the scope of Article 13 of the PPI and could thus give rise to an additional tax domicile.
85.      By way of illustration, one may consider the situation of an official employed in Luxembourg who, in view of part-time work and periods of leave, is able to spend a substantial portion of the year at a residence located in another Member State, such as Spain. If, in those circumstances, that person satisfies the conditions for tax residence in that second Member State, it cannot be maintained that, merely by virtue of being a Union official employed in Luxembourg, that residence can never be recognised for tax purposes.
86.      To accept such a proposition would run counter to the objective of the PPI, which is to ensure the proper functioning and independence of the Union, as well as to the functional nature of Article 13 thereof, whose scope is expressly confined to residences necessitated by duties in the service of the Union. Such a proposition would also, to a certain extent, amount to shielding an individual from the tax jurisdiction of a Member State, in respect of a situation wholly unrelated to the performance of his or her duties and thus not governed by the PPI.
87.      Accordingly, where a residence is established for private reasons, Article 13 of the PPI does not apply and, in that respect, the individual must be treated in the same manner as any other taxpayer. The Member State concerned thus remains free to determine, under its national law, whether, and to what extent, such a residence gives rise to tax liability.
88.      In the light of the foregoing, I propose that the Court reply to the second question referred to the effect that Article 13 of the PPI must be interpreted as precluding the establishment of an additional tax domicile on the basis of a residence in a Member State other than that of the official’s place of employment only where that residence has been established solely by reason of the performance of duties in the service of the Union. In determining whether that condition is satisfied, account must be taken, in particular, of whether the residence is recognised by the employing institution or body as the official’s residence for the performance of those duties, as well as of objective factors demonstrating whether that residence would have been established irrespective of Union employment.
V.      Conclusion
89.      Having regard to all the foregoing considerations, I propose that the Court answer the questions referred by the Bundesfinanzhof (Federal Fiscal Court, Germany) as follows:
(1) The first sentence of the first paragraph of Article 13 of Protocol (No 7) on the Privileges and Immunities of the European Union must be interpreted as applying to gift tax.
(2) Article 13 of Protocol (No 7) on the Privileges and Immunities of the European Union must be interpreted as precluding the establishment of an additional tax domicile on the basis of a residence in a Member State other than that of the official’s place of employment only where that residence has been established solely by reason of the performance of duties in the service of the Union. In determining whether that condition is satisfied, account must be taken, in particular, of whether the residence is recognised by the employing institution or body as the official’s residence for the performance of those duties, as well as of objective factors demonstrating whether that residence would have been established irrespective of Union employment.
1      Original language: English.
i      The name of the present case is a fictitious name. It does not correspond to the real name of any party to the proceedings.
2      OJ 2016 C 202, p. 266.
3      See Athen, M. and Dörr, O., ‘Article 343 TFEU’, in Grabitz, E., Hilf, M., and Nettesheim, M. (eds), Das Recht der Europäischen Union, 73rd Supplement, May 2021, C.H. Beck, Munich, paragraphs 108 to 114.
4      For the sake of simplicity, I shall herein use the term ‘official’ to encompass also other servants of the Union, as well as staff members of the European Central Bank and the European Investment Bank, to whom Article 13 of the PPI likewise applies.
5      For the purposes of the present Opinion, the terms ‘tax residence’ and ‘tax domicile’ will be used interchangeably, the distinction drawn between them in certain national legal systems not being material in the present context.
6      The first paragraph of Article 21 PPI provides that ‘[the] Protocol shall also apply to the European Investment Bank, to the members of its organs, to its staff and to the representatives of the Member States taking part in its activities …’.
7      Austria abolished inheritance and gift tax as of 2008 and the German-Austrian double taxation convention on inheritance and gift taxes was consequently also terminated.
8      See judgment of the Finanzgericht Rheinland-Pfalz (Finance Court, Rhineland-Palatinate, Germany) of 16 September 2021, Case 4 K 1762/19.
9      See, in that regard, the Opinion of Advocate General Darmon in X (C‑88/92, EU:C:1993:129, point 20).
10      See Athen, M. and Dörr, O., footnote 3, op. cit., paragraph 110.
11      See judgment of 17 June 1993, X (C‑88/92, ‘the judgment in X’, EU:C:1993:246, paragraph 11).
12      See judgment of 28 July 2011, Gistö (C‑270/10, ‘the judgment in Gistö’, EU:C:2011:529, paragraph 17 and the case-law cited).
13      ‘Death duties’ is a broad term used historically, notably in the United Kingdom, to denote what would more commonly be referred to today as ‘inheritance tax’; see also Commission Recommendation 2011/856/EU of 15 December 2011 regarding relief for double taxation of inheritance (OJ 2011 L 336, p. 81), which employs ‘inheritance tax’ as the more up-to-date term.
14      See, to that effect, judgment of 24 February 1988, Commission v Belgium (260/86, EU:C:1988:91, paragraph 13).
15      That is, for example, the case in the Czech Republic, Latvia and Lithuania; see Organisation for Economic Co-operation and Development (‘OECD’), ‘Inheritance Taxation in OECD Countries’, OECD Tax Policy Studies, No 28, OECD Publishing, Paris, 2021, p. 115.
16      That is, for instance, the case in Greece, Spain, France and Italy. A comparative analysis shows that a large number of Member States treat gifts and inheritances within an integrated fiscal framework, the distinction between gift tax and inheritance tax being largely technical rather than conceptual. See also Study on Inheritance Taxes in EU Member States and Possible Mechanisms to Resolve Problems of Double Inheritance Taxation in the EU, commissioned by the Directorate-General for Taxation and Customs Union of the Commission and produced by Copenhagen Economics in 2011, which notes that most Member States levy a gift tax in order to prevent inheritance tax from being circumvented through gifts inter vivos, p. 16.
17      See OECD, Inheritance Taxation in OECD Countries, footnote 15, op. cit., pp. 115 to 117.
18      It should be noted, however, that the referring court, while highlighting distinctions under German law, also recognised the similarities between gift tax and both income tax and inheritance tax.
19      Judgment of 25 May 1993, Kristoffersen, (C‑263/91, EU:C:1993:207, paragraph 12).
20      See judgment in X, paragraph 14.
21      It should be noted that, once the applicable tax domicile has been determined based on a uniform interpretation of Article 13 of the PPI, officials may nevertheless face different substantive outcomes, depending on whether – and to what extent – that domicile levies certain taxes.
22      See Opinion of Advocate General Jacobs in Kristoffersen (C‑263/91, ‘the Opinion in Kristoffersen’, EU:C:1992:462, point 10).
23      Article 343 TFEU reads: ‘The Union shall enjoy in the territories of the Member States such privileges and immunities as are necessary for the performance of its tasks, under the conditions laid down in the [PPI]. The same shall apply to the European Central Bank and the [EIB]’. The sole recital of the PPI refers to the wording of Article 343 TFEU.
24      The first paragraph of Article 17 PPI provides that ‘privileges, immunities and facilities shall be accorded to officials and other servants of the Union solely in the interests of the Union’.
25      See, by analogy, the Opinion of Advocate General Darmon in X (C‑88/92, EU:C:1993:129, point 9).
26      Adopted on 13 February 1946, United Nations Treaty Series, Vol. 1, p. 15.
27      See, for example, Headquarters Agreement between the International Criminal Court and the Host State, 1 March 2008 (ICC-BD/04-01-08), which provides for an equivalent rule in respect of staff of that court.
28      See also, mutatis mutandis, Denza, E., Diplomatic Law ‑ Commentary on the Vienna Convention on Diplomatic Relations, fifth edition, Oxford University Press, Oxford, 2025, p. 299, who notes that tax privileges for diplomats are, inter alia, justified by the need to ensure the independent exercise of official functions and, as a matter of administrative convenience, to maintain diplomats within the tax system of the sending State rather than subject them to successive host-State regimes.
29      See point 29 above and, inter alia, OECD, ‘Part I – Introductory Report by the Committee on Fiscal Affairs’, Model Double Taxation Convention on Estates and Inheritances and on Gifts, OECD Publishing, Paris, 1982.
30      See, in that respect, League of Nations Fiscal Committee, Model Bilateral Convention on the Prevention of the Double Taxation of Income and Property (the French-language version using the term ‘fortune’, as in the PPI) and Model Bilateral Convention for the Prevention of the Double Taxation of Estates and Successions; available at: https://archives.ungeneva.org/fiscal-committee-london-and-mexico-model-tax-conventions-commentary-and-text.
It may be noted, in that regard, that the London draft of the latter model convention was, according to its commentary, ‘drafted in such a way so as to enable negotiators of the bilateral treaties based on the model to include gifts inter vivos’, notwithstanding its title referring only to estates and successions. It was only at a much later stage, with the evolution of the OECD Model Double Taxation Convention on Estates and Inheritances and on Gifts, in 1982, that the term ‘gift tax’ was expressly introduced alongside ‘inheritance tax’, in order to reflect the development, in national tax systems, of the former as an anti-avoidance complement to the latter, and also considering their close interconnection.
31      The OECD presently provides two relevant models: the Model Tax Convention on Income and on Capital and the Model Double Taxation Convention on Estates and Inheritances and on Gifts.
32      Detailed information on the double tax conventions concluded by EU Member States is available at: https://taxation-customs.ec.europa.eu/taxation/tax-transparency-cooperation/double-taxations-conventions_en
33      See the judgment in X, paragraph 11.
34      Ibid., paragraphs 12 and 13; see also the judgment in Gistö, paragraph 18.
35      Comparable considerations were at issue in the judgment in Gistö.
36      See the judgment in X, paragraph 10.
37      Even though, as pointed out in the Opinion in Kristoffersen (point 11), this approach may appear highly artificial, in particular where the State of origin is one in which the person concerned resided only for a relatively short period prior to entering the service of the Union.
38      While such a situation may, in practice, affect the exercise of taxation powers by the State of origin, that effect does not result from the official’s employment in the service of the Union and therefore is not precluded by Article 13 of the PPI.
39      In that regard, the second sentence of Article 20 of the EU Staff Regulations expressly provides that ‘official[s] shall notify the Appointing Authority of [their] address and inform it immediately of any change of address’. In the EIB legal framework, it is understood that a declaration of residence may also be relevant with respect to the grant of certain allowances, notably the expatriation allowance provided for under Article 2.1.2 of the EIB Staff Rules.
40      See judgment of 30 November 2021, LR Ģenerālprokuratūra (C‑3/20, EU:C:2021:969, paragraph 57 and case-law cited); see also, regarding the principle of functional necessity of privileges and immunities, Bekker, P.H.F., The Legal Position of Intergovernmental Organizations: A Functional Necessity Analysis of Their Legal Status and Immunities, second revised edition, Brill, Leiden, 2025.
41      See the judgment in X, paragraphs 14 to 16 and the operative part.