OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 9 November 2023 (1)
Case C‑387/22
Nord Vest Pro Sani Pro SRL
v
Administraţia Judeţeană a Finanţelor Publice Satu Mare,
Direcția Generală Regională a Finanţelor Publice Cluj-Napoca
(Request for a preliminary ruling from the Tribunalul Satu Mare (Regional Court, Satu Mare, Romania))
(Request for a preliminary ruling – Fundamental freedoms – Freedom to provide services or freedom of movement for workers – Special tax allowance for employees in the building sector – Inapplicability of the tax allowance for workers posted abroad – Advantage for an employer who is subject to an obligation to deduct tax from wages at source – State aid in the form of an employee income tax exemption)
I.      Introduction
1.        The present proceedings reveal the problems posed by the idea of a free internal market for the Member States as long as they have very different wage levels. In such a case, Member States with a high wage level attract the corresponding workers from the Member States with a low wage level and draw them away from the latter Member States. However, if the sectors concerned are important for the development of the Member State concerned, it is understandable that countermeasures are taken that make the sector more attractive to national workers.
2.        The wage level is often regulated by means of a statutory minimum wage. However, this depends on (usually private-sector) employers being able and willing to pay it. This is probably why, in the present case, after an increase in the minimum wage, (2) Romania put in place other additional incentives. The present case concerns above all a special income tax exemption for workers in the construction industry taxable in Romania who have not been posted abroad by their employer, that is to say, who work in the national territory.
3.        Such a worker, from whose wages income tax was originally deducted, now receives wages without a tax deduction. He or she thus ultimately obtains a wage increase from the State in the amount of income tax which has not been deducted. Thus, the construction sector on national territory becomes more attractive for workers. If the exemption were also extended to employees posted abroad, there would be no change in the difference in wage levels between the national territory and abroad. It is therefore understandable that the tax exemption was limited to employees working in the national territory. It must be determined whether this is not only understandable, but also admissible under EU law. The European Commission firmly disputes the latter assertion.
II.    Legal framework
A.      European Union law
4.        The legal framework of EU law is constituted by Articles 56 and 45 TFEU and, according to the referring court, by Directive 2006/123/EC on services in the internal market (‘the Services Directive’). (3)
5.        However, Article 2(1) and (3) of the Services Directive reads as follows:
‘1.      This Directive shall apply to services supplied by providers established in a Member State.
3.      This Directive shall not apply to the field of taxation.’
B.      Romanian law
6.        The legal basis of the contested decision is Article 60(5) of Legea nr. 227/2015 privind Codul fiscal (Law No 227/2015 regarding the Tax Code; ‘the Tax Code’). That provision reads as follows:
‘Exemptions: …
5.      Natural persons, in respect of employment income and analogous income as referred to in Article 76(1), (2) and (3), in the period between 1 January 2019 and 31 December 2028 inclusive, provided that the following cumulative conditions are met:
(a)      Employers carry on activities in the construction sector which include:
(i)      building activities as defined by CAEN code 41.42.43 – section F – Constructions;
(ii)      the fields of activity concerning the manufacturing of construction materials, defined by the following CAEN codes:...
(iii)      ... architecture, engineering, and technical consultancy services;
(b)      Employers achieve a turnover from the activities referred to in point (a) and other activities specific to the construction sector of at least 80% of total turnover. For newly established companies, that is, companies registered in the commercial register as from January 2019, the turnover is calculated cumulatively from the beginning of the year, including the month in which the exemption applies, and for companies existing on 1 January of each year, the cumulative turnover for the previous tax year is taken as the basis for calculation. For companies in existence on 1 January of each year which had a cumulative turnover from the activities referred to in point (a) above of 80% or more in the previous tax year inclusive, the tax relief shall be granted for the whole of the current year; and for companies in existence on the same date which do not achieve this minimum turnover limit the principle of newly established companies shall apply. This turnover is achieved on a contract or order basis and covers labour, materials, machinery, transport, equipment, fixtures and fittings and other ancillary activities necessary for the activities referred to in (a). Turnover shall include production carried out and not invoiced;
(c)      The gross monthly income from employment and analogous income, as referred to in Article 76(1), (2) and (3), earned by the natural persons to whom the exemption applies shall be calculated on the basis of a gross employment income for eight working hours per day of at least RON 3 000 per month. The exemption shall apply to the amounts of gross monthly income from employment and analogous income, as referred to in Article 76(1), (2) and (3), earned by the natural persons, up to a maximum of RON 30 000. Any such gross monthly income exceeding RON 30 000 shall not benefit from tax relief;
(d)      The exemption shall apply in accordance with the instructions set out in a Joint Order of the Minister for Public Finances, the Minister for Employment and Social Justice and the Minister for Health referred to in Article 147(17), and the Declaration relating to the obligations to pay social security contributions and income tax and the register of insured persons shall constitute a sworn statement of compliance with the conditions for applying the exemption; …’
7.        Two orders of the Minister for Finance (4) provide:
‘The tax relief referred to in Article 60(5) … of the Tax Code shall not be granted in respect of employment income and analogous income earned by employees on secondment.’
III. The dispute in the main proceedings
8.        The tax authorities carried out a tax inspection of Nord Vest Pro Sani Pro SRL (‘the applicant company’) as a result of which a tax assessment notice was issued, concerning the principal tax liabilities of that company. That notice stated that, ‘in the case of employees providing services in Germany and Austria, the company is not entitled to the tax exemption, provided for by Article 60(5) of the Tax Code, relating to the tax on employment income’. On the contrary, the applicable rate was 10%, resulting in a discrepancy of RON 59 065, that is to say approximately EUR 3 200.
9.        To that same effect, the defendant authorities held that, in respect of employees providing services in Germany and Austria, the company was not entitled to the exemptions provided for in Article 154(1)(r) of the Tax Code, and that the rate of health insurance contribution was 10%, resulting in a discrepancy of RON 194 882, that is to say approximately EUR 39 000. It was held that the same applied to the rate of social security contributions, which was therefore 25%. For that reason, a discrepancy of RON 77 959 – approximately EUR 15 500 – was established. The applicant company brought an action against that decision.
10.      The defendant authorities found that the applicant company had wrongly applied the tax relief for the construction sector, in respect of employees who were working in Germany and Austria. In essence, all of these corrections were made because the defendant authorities were of the view that the explanatory memorandum to the Ordonanța de urgență a Guvernului n. 114/2018 (Government Emergency Order No 114/2018) indicated that the aim of those exemptions was to support the construction sector in Romania and that the legislature’s intention had therefore been to grant tax relief for construction work carried out within the national territory.
11.      According to the referring court, it is obvious that, under Romanian legislation, Romanian companies which conduct business in Romania are treated differently, from a tax perspective, from those which conduct business in other Member States. The referring court held that the approach taken in the relevant Romanian legislation runs counter to one of the principal objectives of the European Union, the creation of an internal market, since any company that carries on business outside Romania bears a far heavier tax burden than companies that carry on business in Romania. It considers that a fiscal policy which discourages companies in the construction sector from providing services outside Romania constitutes, in practice, a major obstacle to the creation of a common market.
IV.    Proceedings before the Court of Justice
12.      Consequently, the Tribunalul Satu Mare (Regional Court, Satu Mare, Romania), before which the dispute was brought, referred the following question to the Court of Justice for a preliminary ruling:
Are [Articles 28 and 56 TFEU as well as Article 20 of Directive 2006/123/EC] to be interpreted as precluding or not precluding a legal situation such as that at issue in the present case, in which the Romanian legislature may treat differently, from a tax perspective, Romanian companies which conduct business on the territory of the Romanian State and those which conduct business on the territory of other Member States, with the result that the applicant company, which has provided services principally in Austria and Germany, does not benefit from the tax exemptions enjoyed by other companies in the construction sector that conduct their businesses in Romania?
13.      In the proceedings before the Court, Romania and the Commission submitted written observations on this question and took part in the hearing on 6 July 2023.
V.      Legal assessment
A.      The question referred and the course of the investigation
14.      According to the question referred for a preliminary ruling, the referring court raises the question of the ‘differing tax treatment’ of Romanian companies according to the place where, with their employees, they provide services in the construction sector. However, the difference in tax treatment provided for by Romanian law is limited to an exemption from tax on workers’ employment income. Other tax exemptions do not arise from the facts set out above.
15.      It follows that the subject matter of the question referred for a preliminary ruling is solely the exemption provided for in Article 60(5) of the Tax Code for monthly gross income up to a certain amount deriving from the employment income of natural persons. The social security privileges may therefore be excluded from the examination (although they may share the same fate, since, according to Romania’s statements at the hearing, they concern only the employees’ contributions (5) which the employer also withholds and pays from the wages).
16.      In that regard, the referring court’s question concerns only the fundamental freedoms of employers and the Services Directive. However, according to Article 2(3), the Services Directive does not apply to the field of taxation. This exception covers all areas of taxation, without drawing any distinction between the types of duties or taxes concerned, but also all aspects of taxation, whether material rules or procedural rules, including, therefore, the detailed arrangements for the collection of taxes of whatever kind. (6) Therefore, any different tax treatment of the profits of Romanian service providers (undertakings) can only be measured against the yardstick of the fundamental freedoms.
17.      By contrast, first, in so far as the Commission, in its observations, insists that prohibited aid exists, that goes beyond the question referred for a preliminary ruling and the request for a preliminary ruling. The referring court does not raise that question and, as Romania rightly points out, it has not, logically, provided any details in order to be able to verify the existence of prohibited aid in the present case. (7)
18.      As will be explained in more detail (paragraph 21 et seq.), the exemption from income tax of natural persons who derive income from employment does not benefit the companies which employ them. In that regard, the measure reducing the employees’ contributions is addressed solely to the employees in the construction sector, who are the sole actual beneficiaries thereof. (8) Ultimately, this merely amounts to a kind of increased minimum wage that is specific to the sector. Therefore, there is already no selective advantage in favour of an undertaking. The applicant company has not claimed, and the referring court has not stated in its request for a preliminary ruling, that there is any other indirect advantage on the part of particular Romanian construction companies.
19.      Secondly, an examination in the light of Articles 107 and 108 TFEU is not necessary in any event in order to resolve the dispute in the main proceedings. Thus, according to the Court’s settled case-law, as the Commission has rightly pointed out, those liable to pay a tax cannot rely on the argument that the exemption enjoyed by other businesses constitutes State aid in order to avoid payment of that tax. (9) Exceptions only apply when the revenue from the tax is necessarily allocated to the financing of the aid and has a direct impact on the amount of the aid. (10) That is not the case here, however. Even if the exemption from income tax of employees not posted abroad were therefore aid, the applicant company could not require that it – still less that other third parties (that is to say, its employees) – also benefit from that aid (thus also be exempt).
20.      Consequently, it is necessary only to examine whether the tax advantage enjoyed by construction employees working on national territory is contrary to the fundamental freedoms. To that end, it is necessary first of all to examine the operation of the tax advantage (see B below), in order to be able to find a limitation of a particular fundamental freedom. Since the fundamental freedoms in tax law are limited to a prohibition of discrimination, it is then necessary to consider whether there is a disadvantage to the cross-border situation. This in turn presupposes, according to the Court, the very existence of an objectively comparable situation (see C below). If an objectively comparable situation exists, the question arises as to whether the unequal treatment is justified. By means of the tax advantage in question, Romania intends to increase the level of wages in the national construction sector in order to ensure the existence of an efficient construction sector on national territory (see D below).
B.      Operation of the tax exemption
21.      The applicable fundamental freedom is determined by reference to the purpose of the legislation concerned. (11) The tax exemptions referred to in the question referred for a preliminary ruling result from Article 60(5) of the Tax Code. It governs taxpayers exempt from income tax. These are only natural persons in receipt of employment income, that is to say, employed persons. The beneficiary of that exemption is therefore not an undertaking but an employee. He or she must be employed by an employer carrying out certain activities in the construction sector. In addition, the amount of the tax exemption is limited. In conclusion, it seems that this is a kind of special tax allowance for employees working in the construction sector who are liable to Romanian income tax and who are not posted abroad, that is to say, who carry out their activities on national territory.
22.      Thus, on the one hand, workers in the construction sector are treated differently under tax law depending on whether they carry on an activity in Romania or whether they are posted by their employer to another Member State. On the other hand, taxpayers with the same amount of employment income are taxed differently depending on the sector in which they work within the national territory. The latter may appear problematic in the light of the generally accepted principle of equal taxation. However, that principle is not a principle of EU law, at least as regards Member States’ income tax. The question whether that difference in treatment is consistent with the Romanian Constitution can only be decided by the Romanian Constitutional Court, and not by the Court of Justice.
23.      It is therefore only the difference in tax treatment of employees in the construction sector that must be examined here, depending on whether they work in Romania or whether they were posted by their employer to another Member State. The applicant company in the present case, however, is a legal person which cannot have income from employment. Normally, a legal person is not liable to income tax but to corporation tax. The applicant company cannot therefore benefit from that exemption from income tax. It appears that the action is the result of a tax assessment notice which the applicant company received because it withheld too little tax on wages (and social security contributions) from the wages of its posted workers. The Court has already observed that it is not decisive whether national rules formally addressed to employers in reality concern employees. (12)
24.      A tax on wages, which was determined in the tax assessment notice in respect of the applicant company as an employer, is normally only an advance payment of the employee’s income tax debt and is therefore merely a special method of collecting the employee’s income tax. Its objective is normally to ensure that the tax creditor receives a continuous transfer of income tax before the actual taxpayer (the employee) can otherwise spend that amount. That is why the employer retains part of the salary immediately at source and does not pay it to the employee but to the State Treasury. In doing so, however, the employer does not pay that tax on its own account, but on behalf of the employee when it discharges its obligation to pay wages tax.
25.      This is a very effective tax recovery procedure through the (usually private-sector) employer. The fact remains that the employee’s income tax is collected via the wage tax the employer is required to deduct. The Court holds that the employer, to that extent, acts as an intermediary and, therefore, the measure reducing the employees’ contributions at issue in the main proceedings remains neutral in relation to that employer. (13) In such a case, that obligation to deduct tax from wages at source also exists for all employers, since the legislation is limited to a supplementary allowance to be taken into account. It follows that a calculation of the wages tax must continue to be carried out in respect of employees working on the national territory. (14)
26.      Thus, even if the applicant company was the subject of a tax assessment, the amount of tax on wages to be withheld does not constitute a disadvantage for the applicant company as an employer, but at most a disadvantage for its workers posted to other Member States. This is decisive for the fundamental freedom to be examined.
C.      Restriction of a fundamental freedom
1.      Restriction on freedom of movement for workers versus restrictions on freedom to provide services
27.      Since the exemption provided for in Article 60(5) of the Tax Code is an exemption from employees’ income tax, it does not constitute a direct restriction on the employer’s freedom to provide services under Article 56 TFEU. Only a restriction on freedom of movement for workers resulting from Article 45 TFEU can therefore be envisaged. (15) By contrast, in so far as the Commission contends that there is also an indirect restriction on the applicant company’s freedom to provide services, that is not convincing.
28.      First, neither the referring court nor the applicant company has argued that, because of the tax exemption, it is now more difficult to find employees in the Romanian construction sector who could be posted abroad. That is, moreover, unlikely here because, in the present case, the applicant company has seconded employees to Germany and Austria. Even with Romania’s exemption from income tax (10% of RON 3 000 minimum wage, that is approximately EUR 60 per month, resulting in a net minimum wage of RON 3 000 instead of RON 2 700, that is approximately EUR 600), an appreciable difference in remuneration remains in comparison with those two countries. According to the information provided by Romania, the minimum wage in Germany in 2022 was EUR 1 621. Secondment to that Member State therefore seems to remain attractive.
29.      Secondly, that argument would mean that any increase in the minimum wage, for example in the construction sector in France, would constitute an indirect restriction on the freedom to provide services of construction undertakings established in France. According to that logic, it would be more difficult for them to post workers to other Member States. It is difficult to argue that a change in the minimum wage in a Member State currently requires justification under EU law, however. On the contrary, differences in pay levels between different Member States are currently an integral part of the European Union. Consequently, a change in the minimum wage in one Member State cannot be regarded as an indirect restriction on fundamental freedoms for those who wish to work with national workers in other Member States (see also Article 153(5) TFEU).
30.      Consequently, it remains to be concluded that, because of the special income tax exemption for construction sector employees carrying on their activity in the national territory, ‘only’ a restriction on freedom of movement for workers deriving from Article 45 TFEU can be envisaged in the present case.
2.      Restriction of freedom of movement for workers
31.      Article 45(2) TFEU prohibits any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment. In the present case, however, the tax-free allowance makes no distinction on the basis of nationality.
32.      Nevertheless, there may be an obstacle to the free movement of workers prohibited by Article 45(1) TFEU. In that context, nationals of the Member States have in particular the right, which they derive directly from the Treaty, to leave their Member State of origin to enter the territory of another Member State and reside there in order to pursue an activity there.
33.      According to the Court’s case-law, Article 45 TFEU precludes any national measure which is capable of hindering or rendering less attractive the exercise by EU nationals of the fundamental freedoms guaranteed by that article. (16) In so far as the income tax allowance reduces the difference in wage between employees pursuing an activity in Romania and those pursuing an activity in other Member States, their secondment abroad becomes less attractive. If the allowance is considered in isolation, there could therefore be a restriction of freedom of movement for workers in the present case.
34.      However, the Court has already held on many occasions – mainly in the context of the freedom of establishment and the freedom to provide services – that the Member States’ rules on the conditions and the level of taxation fall within the fiscal autonomy of the Member States, on condition that they do not discriminate against the cross-border situation in relation to the internal situation. (17)
35.      However, the special tax-free allowance introduces a difference in treatment between income from employment in the construction sector, according to the Member State in which it is generated. Income received abroad by a ‘posted worker’ is not eligible for the tax allowance, whereas income generated in the national territory is eligible for the tax allowance. That difference in treatment of the cross-border situation is, in abstract terms, capable of rendering less attractive the exercise of the free movement of workers through work carried out abroad (if workers abroad continue to be liable to pay tax in Romania).
3.      Objectively comparable situation
36.      However, according to the case-law of the Court, such a difference in treatment is incompatible with the fundamental freedoms only if it relates to objectively comparable situations. In that regard, the comparability of a cross-border situation with an internal situation must be examined having regard to the objective pursued by the national provisions at issue. (18)
37.      The objective of the tax allowance is to increase the level of wages for the national construction sector. It appears that an increase in the minimum wage had reached its limits in Romania. That is why the Romanian State decided to increase wages further by waiving the corresponding income tax. In the light of that objective, as Romania points out, workers posted to other Member States are already not comparable to workers pursuing their activity on national territory. The minimum wage in a Member State relates to the territory of that Member State, while the first subparagraph, letter (c) of Article 3(1) of Directive 96/71/EC (‘the Posting Directive’) (19) specifies that, for posted workers in the construction sector, the rules on pay in the Member State where the work is carried out apply. In the absence of comparability, an infringement of the freedom of movement for workers cannot therefore be envisaged.
38.      On the other hand, the Commission justifies the comparability in the present case by the fact that workers carry out the same activity – only in the one case within national territory and in the other case abroad – but are subject to different taxation. The divergent views indicate that the criterion of objective comparability overlaps with the justification for the difference in treatment.
39.      Moreover, as I have already stated elsewhere, (20) the criterion of comparability is very vague. Given that all situations are comparable in some respect, if they are not identical, (21) affirming or denying the existence of objective comparability appears to be arbitrary and should only be used, if at all, in obvious cases.
40.      This is indicative of recent developments in the Court’s case-law on so-called final losses. Thus, the Bevola ruling, (22) unlike the ruling in W, (23) affirmed the existence of objective comparability between permanent establishments abroad and those in national territory. The only difference between the two cases lies in the fact that a failure to take into account losses attributable to a permanent establishment in another Member State resulted in one case from a double taxation convention (DTC) and in the other case from unilateral legislation. The question whether establishments in national territory and in other Member States may be treated differently is, however, a matter of justification. (24)
41.      Consequently, if the criterion of objective comparability is waived here, it is necessary only to examine whether the difference in taxation between workers in the construction sector, depending on whether or not they are posted abroad, can be justified.
D.      Justification of the restriction
42.      A restriction on fundamental freedoms may be justified by overriding reasons in the public interest if it is capable of ensuring achievement of the objective in question and does not go beyond what is necessary for that purpose. (25)
43.      To date, the Court has regarded as overriding reasons in the public interest, in respect of the free movement of workers, rewarding professional experience in pay policy (26) and guaranteeing the effectiveness of fiscal supervision. (27)
44.      By contrast, in the context of the freedom to provide services, (28) the social protection of workers, (29) the prevention of unfair competition on the part of undertakings which pay their posted workers at a rate less than the minimum rate of pay, in so far as that objective includes protecting workers by combating social dumping (30) and combating fraud, in particular social security fraud, and preventing abuse, (31) have been held to be overriding reasons in the public interest. In the context of freedom of establishment, the Court has recognised the protection of workers, (32) but also the encouragement of employment and recruitment, as part of social policy. (33)
45.      According to settled case-law, protecting the national economy, an objective of a purely economic nature, cannot justify restrictions. (34) However, under certain circumstances, considerations relating to the maintenance of employment may be justified. (35) For example, in the context of the free movement of capital, the objective of limiting systemic risks on the real estate market was held to constitute an overriding reason in the public interest. (36)
46.      The grounds of justification listed here do not, prima facie, include the maintenance of an efficient building sector. However, a catalogue of possible justifications established at the judicial level is per se not exhaustive. Consequently, other comparable grounds of justification may also be envisaged. The maintenance of employment in the construction sector is the most conceivable one in the present case. Combating systemic risks in this sector, in particular the loss of this sector due to a lack of workers resulting from too low a level of pay, is another very similar ground of justification.
47.      As Romania observed at the hearing, the tax exemption is intended to increase the wages of workers in that sector (construction industry), since the increase in the minimum wage has not been considered sufficient, in itself, to combat labour emigration. In addition, there is social protection of workers on account of an improvement in the hitherto low wage structure. It is legitimate to regard the mere guarantee of sufficient workers on national territory by means of a kind of minimum wage specific to the sector as an overriding reason in the public interest.
48.      This applies a fortiori to the sectors necessary for a society. Every modern society depends on an efficient infrastructure. The construction sector is essential for maintaining and developing this. Ensuring the proper functioning of the national construction industry by increasing the level of wages in this sector in order to avoid further emigration of workers in this sector must therefore also be recognised as an overriding reason in the public interest.
49.      In so far as the Commission objects that these are purely economic reasons, that is not convincing. This is not so much to promote the national construction sector, but to ensure that there is still a construction sector at all in the national territory. Without an increase in the minimum wage, there is also no reason to expect that workers from other Member States will fill that gap. The advantage benefits not only the economy, but primarily workers and society.
50.      The measure (special tax allowance) is appropriate – in view of the scope offered to the national legislature – to achieve the objective it pursues. It is not manifestly inconceivable that that measure encourages more workers in the construction sector to pursue an activity in Romania. As a result, their net salary increases and the activity carried out on national territory becomes more attractive.
51.      Nor does the measure at issue go beyond what is necessary to achieve that objective, since the fundamental freedoms aim to protect the freedom of EU citizens. When viewed in specific terms, the waiver of tax by the Romanian State does not limit the individual’s freedom, but increases it overall. Compared with the previous situation, the activity abroad does not become less attractive to an employee who is liable to pay tax in Romania (in the present case, the status quo remains applicable). Only activity carried out on national territory becomes more attractive. Thus, it merely reduces the advantage of an activity abroad in comparison with an activity carried out on national territory. Equally appropriate and less onerous measures to adapt the different wage levels are not visible, especially as Romania had already previously increased the minimum wage.
52.      Finally, in addition to appropriateness and necessity, the third issue to be examined is proportionality sensu stricto. (37) According to that principle, measures must not, even if they are appropriate and necessary for achieving legitimate objectives, give rise to any disadvantages which are disproportionate to the objectives pursued.
53.      Interference or unequal treatment for a person wishing to continue to pursue an activity in the construction sector abroad is not serious in the present case. Any employee subject to tax in Romania may, if the conditions are agreeable to him or her, continue to work abroad under the same conditions as before. It merely becomes somewhat more attractive to work in the national territory, as the level of domestic wages increases as a result of the tax allowance. Moreover, the measures are limited here in their amount (by the tax rate and the allowance), in time (the income tax exemption applies from 1 January 2019 to 31 December 2028 inclusive) and, moreover, merely increase a wage level that is lower than the EU average.
54.      As Romania correctly observes, the creation of a comparable wage level within the European Union (in the sense of an approximation of living conditions) is not inappropriate. In striking a balance between the two legal assets concerned (ensuring an operational construction sector and free movement of workers), the objective of the Romanian measure, which is to be recognised, takes priority due to the low level of interference and the importance of the sector concerned. The measure is therefore appropriate from the point of view of EU law (proportionate in the strict sense) and therefore proportionate overall. It follows that the difference in tax treatment between posted workers and non-posted workers receiving taxable income in Romania in the construction sector is not contrary to EU law.
VI.    Conclusion
55.      Thus, I propose that the question referred for a preliminary ruling by the Tribunalul Satu Mare (Regional Court, Satu Mare, Romania) be answered as follows:
Free movement of workers (Article 45 TFEU) does not preclude national legislation, as in this case, which grants workers taxable in the national territory who are employed by an employer carrying out activities in the construction industry for profit in the national territory and who have not been posted abroad a special allowance in respect of income tax, with a view to reducing the outward migration of workers from the domestic construction industry due to a minimum wage that is lower than the EU average.
1      Original language: German.
2      According to the information provided by Romania at the hearing, in 2018 the minimum wage was increased from 1 900 Romanian lei (RON) (approximately EUR 380) to RON 3 000 (approximately EUR 600).
3      Directive of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36).
4      No 611/2019 of 31 January 2019 and No 2165/2019 of 10 May 2019, Annex 6, point 8.
5      Although a reduction in employers’ contributions has been planned, it has not yet entered into force, since, according to Romania, the procedure of notification to the Commission has not yet been completed.
6      See judgments of 27 April 2022, Airbnb Ireland
(C‑674/20, EU:C:2022:303, paragraph 27), and of 29 April 2004, Commission v Council
(C‑338/01, EU:C:2004:253, paragraph 66).
7      In addition, according to Romania, another part of the package of measures (the planned reduction in employers’ contributions), which is not concerned in the present case, was notified to the Commission with a view to increasing the minimum wage in the construction sector. If that were the case – according to the Commission’s statement, the notification was not received, however – the Commission’s line of argument already verges on inconsistent behaviour here. See, as regards the principle venire contra factum proprium, judgment of 6 November 2014, Italy
v Commission
(C‑385/13 P, not published, EU:C:2014:2350, paragraph 67). Already to that effect, judgment of 15 June 2023, Bank M. (Consequences of the annulment of the contract)  (C‑520/21, EU:C:2023:478, paragraph 81).
8      It is to that effect that the Court has already ruled on the measure reducing the employees’ contributions in the case of fisheries undertakings; see judgment of 17 September 2020, Compagnie des pêches de Saint-Malo
(C‑212/19, EU:C:2020:726, paragraph 46).
9      Judgments of 3 March 2020, Tesco-Global Áruházak (C‑323/18, EU:C:2020:140, paragraph 36); of 6 October 2015, Finanzamt Linz (C‑66/14, EU:C:2015:661, paragraph 21); of 15 June 2006, Air Liquide Industries Belgium (C‑393/04 and C‑41/05, EU:C:2006:403, paragraph 43 et seq.); of 27 October 2005, Distribution Casino France and Others
(C‑266/04 to C‑270/04, C‑276/04 and C‑321/04 to C‑325/04, EU:C:2005:657, paragraph 42 et seq.); and of 20 September 2001, Banks (C‑390/98, EU:C:2001:456, paragraph 80 and the case-law cited).
10      To that effect: judgments of 20 September 2018, Carrefour Hypermarchés and Others (C‑510/16, EU:C:2018:751, paragraph 19); of 10 November 2016, DTS Distribuidora de Televisión Digital v Commission (C‑449/14 P, EU:C:2016:848, paragraph 68); and of 22 December 2008, Régie Networks (C‑333/07, EU:C:2008:764, paragraph 99).
11      Settled case-law; see judgments of 19 June 2014, Strojírny Prostějov and ACO Industries Tábor
(C‑53/13 and C‑80/13, EU:C:2014:2011, paragraph 24); of 28 February 2013, Petersen (C‑544/11, EU:C:2013:124, paragraph 28); and, in particular, judgments of 13 November 2012, Test Claimants in the FII Group Litigation (C‑35/11, EU:C:2012:707, paragraph 90), and of 12 September 2006, Cadbury Schweppes and Cadbury Schweppes Overseas (C‑196/04, EU:C:2006:544, paragraphs 31 to 33).
12      This has been expressly stated with regard to employers’ contributions for trainee workers: judgment of 21 November 1991, Le Manoir (C‑27/91, EU:C:1991:441, paragraph 9).
13      Judgment of 17 September 2020, Compagnie des pêches de Saint-Malo (C‑212/19, EU:C:2020:726, paragraph 43).
14      This distinguishes the situation from the judgment of 19 June 2014, Strojírny Prostějov and ACO Industries Tábor (C‑53/13 and C‑80/13, EU:C:2014:2011, paragraph 30), in which a particular obligation to withhold tax at source was regarded as a restriction on the freedom to provide services.
15      Concerning a tax exemption for employees depending on where their employer is established, see also judgment of 28 February 2013, Petersen (C‑544/11, EU:C:2013:124, paragraph 32).
16      Judgments of 10 October 2019, Krah (C‑703/17, EU:C:2019:850, paragraph 41); of 18 July 2017, Erzberger
(C‑566/15, EU:C:2017:562, paragraph 33); of 28 February 2013, Petersen (C‑544/11, EU:C:2013:124, paragraph 36); and of 26 January 1999, Terhoeve
(C‑18/95, EU:C:1999:22, paragraphs 37 to 39).
17      See, to that effect, judgments of 26 May 2016, NN (L) International (C‑48/15, EU:C:2016:356, paragraph 47); of 14 April 2016, Sparkasse Allgäu (C‑522/14, EU:C:2016:253, paragraph 29); and of 6 December 2007, Columbus Container Services (C‑298/05, EU:C:2007:754, paragraphs 51 and 53); and order of 4 June 2009, KBC-bank (C‑439/07 and C‑499/07, EU:C:2009:339, paragraph 80).
As regards specifically the freedom to provide services, see, inter alia, judgments of 18 October 2012, X (C‑498/10, EU:C:2012:635, paragraph 20), and of 11 June 2009, X and Passenheim-van Schoot (C‑155/08 and C‑157/08, EU:C:2009:368, paragraph 32 and the case-law cited).
18      Judgments of 4 July 2018, NN (C‑28/17, EU:C:2018:526, paragraph 31); of 12 June 2018, Bevola and Jens W. Trock (C‑650/16, EU:C:2018:424, paragraph 32); of 22 June 2017, Bechtel (C‑20/16, EU:C:2017:488, paragraph 53); of 12 June 2014, SCA Group Holding and Others
(C‑39/13 to C‑41/13, EU:C:2014:1758, paragraph 28); and of 25 February 2010, X Holding (C‑337/08, EU:C:2010:89, paragraph 22).
19      Directive of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (OJ 1997 L 18, p. 1), as last amended by Directive 2018/957 of the European Parliament and of the Council of 28 June 2018 (OJ 2018 L 173, p. 16).
20      See, in this respect, my Opinions in Nordea Bank Danmark (C‑48/13, EU:C:2014:153, points 21 to 28) and, on that basis, Memira Holding (C‑607/17, EU:C:2019:8, point 46), as well as Holmen (C‑608/17, EU:C:2019:9, point 38) and AURES Holdings (C‑405/18, EU:C:2019:879, point 30).
21      There is a German proverb that says that one should not compare apples with pears. However, apples and pears do have some common features (both are pome fruit) and are therefore comparable in that respect.
22      Judgment of 12 June 2018, Bevola and Jens W. Trock (C‑650/16, EU:C:2018:424, paragraphs 30 to 40).
23      Judgment of 22 September 2022, W (Deductibility of final losses by a non-resident permanent establishment) (C‑538/20, EU:C:2022:717, paragraphs 18 to 22).
24      Thus, the system of bilateral treaties may rather justify unequal treatment of taxpayers – see Kokott, J., EU Tax Law, Munich, 2022, § 5, marginal note 98.
25      Judgments of 10 October 2019, Krah (C‑703/17, EU:C:2019:850, paragraph 55); of 8 May 2019, Österreichischer Gewerkschaftsbund (C‑24/17, EU:C:2019:373, paragraph 84); of 5 December 2013, Zentralbetriebsrat der gemeinnützigen Salzburger Landeskliniken Betriebs
(C‑514/12, EU:C:2013:799, paragraph 36); of 28 February 2013, Petersen
(C‑544/11, EU:C:2013:124, paragraph 47); of 8 November 2012, Radziejewski (C‑461/11, EU:C:2012:704, paragraph 33); and of 16 March 2010, Olympique Lyonnais (C‑325/08, EU:C:2010:143, paragraph 38).
26      Judgments of 10 October 2019, Krah (C‑703/17, EU:C:2019:850, paragraph 57), and of 3 October 2006, Cadman (C‑17/05, EU:C:2006:633, paragraph 34).
27      Judgment of 28 February 2013, Petersen (C‑544/11, EU:C:2013:124, paragraph 50 and the case-law cited).
28      Judgment of 3 December 2014, De Clercq and Others (C‑315/13, EU:C:2014:2408, paragraph 65).
29      Judgments of 7 October 2010, Santos Palhota and Others
(C‑515/08, EU:C:2010:589, paragraph 47 and the case-law cited); of 18 July 2007, Commission
v Germany
(C‑490/04, EU:C:2007:430, paragraph 70); and of 12 September 2019, Maksimovic and Others. (C‑64/18, C‑140/18, C‑146/18 and C‑148/18, EU:C:2019:723, paragraph 37).
30      See to that effect, judgment of 12 October 2004, Wolff & Müller (C‑60/03, EU:C:2004:610, paragraphs 35, 36 and 41).
31      Judgment of 12 September 2019, Maksimovic and Others (C‑64/18, C‑140/18, C‑146/18 and C‑148/18, EU:C:2019:723, paragraph 37).
32      Judgment of 21 December 2016, AGET Iraklis
(C‑201/15, EU:C:2016:972, paragraph 73 and the case-law cited).
33      Judgment of 21 December 2016, AGET Iraklis
(C‑201/15, EU:C:2016:972, paragraph 74 and the case-law cited).
34      Judgment of 21 December 2016, AGET Iraklis (C‑201/15, EU:C:2016:972, paragraph 72). See also, to that effect, judgments of 5 June 1997, SETTG (C‑398/95, EU:C:1997:282, paragraphs 22 and 23); of 6 June 2000, Verkooijen (C‑35/98, EU:C:2000:294, paragraphs 47 and 48); and of 4 June 2002, Commission
v Portugal (C‑367/98, EU:C:2002:326, paragraph 52 and the case-law cited). The same applies in the area of the free movement of capital, see judgment of 16 December 2021, UBS Real Estate (C‑478/19 and C‑479/19, EU:C:2021:1015, paragraph 70).
35      Judgment of 21 December 2016, AGET Iraklis (C‑201/15, EU:C:2016:972, paragraph 75). See also, to that effect, judgment of 25 October 2007, Geurts and Vogten
(C‑464/05, EU:C:2007:631, paragraph 26).
36      Judgment of 16 December 2021, UBS Real Estate
(C‑478/19 and C‑479/19, EU:C:2021:1015, paragraph 73).
37      See my Opinions in PrivatBank and Others
(C‑78/21, EU:C:2022:738, point 88) and in G4S Secure Solutions (C‑157/15, EU:C:2016:382, point 112).