Opinion of Mr Advocate General Ruiz-Jarabo Colomer delivered on 25 March 1999. - Georges Vander Zwalmen and Elisabeth Massart v Belgian State. - Reference for a preliminary ruling: Cour d'appel de Bruxelles - Belgium. - Officials and other servants of the European Communities - Personal income tax - Taxation of the spouse of a Community official. - Case C-229/98.



European Court reports 1999 Page I-07113



Opinion of the Advocate-General

1 The Cour d'Appel (Court of Appeal), Brussels, has referred to the Court of Justice for a preliminary ruling two questions on the interpretation of Article 13 of the Protocol on the Privileges and Immunities of the European Communities of 8 April 1965 (hereinafter `the Protocol') in relation to fiscal legislation which takes into account, for income tax purposes, the earned income of the officials to whom Article 13 of the Protocol refers.

The facts, the proceedings and the questions referred for a preliminary ruling

2 As stated in the order for reference, the facts in the case are as follows:

- Mr Vander Zwalmen is a Belgian official - Chief Registrar at the Cour de Cassation - and is subject to personal income tax in Belgium. His wife, Ms Massart, is an official of the European Communities; having established her residence in Belgium before being appointed an official of the European Communities, she too is subject to income tax in that country because Article 14 of the Protocol, relating to the tax domicile of officials, is not applicable to her.

- The Belgian tax authority refused to grant the spouses Vander Zwalmen and Massart the marital allowance - applicable to certain income earned by married couples who are subject to tax - on the ground that, under the amendments to the laws governing income tax, (1) for tax purposes they could no longer be regarded as spouses but had to be treated as separate taxpayers.

- In the complaints he lodged against that decision, Mr Vander Zwalmen claimed that the tax had been determined in breach of Article 13 of the Protocol, since that tax was, to the extent to which Belgian law excluded him from the benefit of the marital allowance, levied indirectly on the exempted income of Ms Massart.

3 When those claims were rejected, the spouses lodged an appeal before the Cour d'Appel, Brussels, which, in view of the doubts surrounding the interpretation of Article 13 of the Protocol, referred the following questions to the Court of Justice for a preliminary ruling:

`Must Article 13 of the Protocol on the Privileges and Immunities of the European Communities be interpreted as:

(1) prohibiting the Member States, under fiscal legislation applicable to personal tax, from creating, for the taxation of married couples and their children, a distinct category of taxpayers by reason of the fact that one of them is a European official, receiving as such earned income which is exempted under a convention, without reservation as to progressive rates of tax, and from making for that category two separate assessments whereby the tax is determined for each of them on the basis of his own income and that of his children which is available to him by operation of law, whilst at the same time, where appropriate, each remains jointly and severally liable for the tax debt of the household (2) whereas, for married couples in which one spouse does not receive taxable earned income or receives insignificant earned income, under national law the assessment is made in the name of both spouses, and, with the exception of earned income, the income of the spouses is aggregated with the income of the spouse who receives more, and, where the income of a spouse is less than 30% of the aggregate earned income of both spouses, there is attributed to him a portion of the earned income of the other spouse which, together with his own earned income, enables him to attain 30% of that income, subject to a maximum of BEF 270 000 (indexed), which may result, by virtue of the progressive nature of tax rates, in a reduction of the tax payable by the spouses?

(2) prohibiting a Member State from refusing, by recourse to the separate taxation described under No 1, the benefit of the marital allowance for the spouse of a European official, with the exception of those who declare that they receive earned income which is exempted under a convention, without reservation as to progressive rates of taxation, of less than BEF 270 000 (indexed), who does not receive non-exempted income of a sufficient amount for the benefit of the marital allowance to be totally offset by the tax due by virtue of the aggregation of the spouses' income and the progressive nature of the tax rates?'

Legal provisions

4 Article 13 of the Protocol provides:

`Officials and other servants of the Communities shall be liable to a tax for the benefit of the Communities on salaries, wages and emoluments paid to them by the Communities ...

They shall be exempt from national taxes on salaries, wages and emoluments paid by the Communities.'

5 The applicable Belgian law, as stated in the order for reference, is the following:

- Law of 7 December 1988 making changes regarding income tax and taxes assimilated to stamp tax

Article 1

`For the application of this law, the following terms shall have the following meanings:

1. spouses: married persons whose circumstances are not any of those referred to in Article 75(1) of the Income Tax Code;

2. separate taxpayers: taxpayers not referred to in paragraph 1.'

Article 4

`1. Where only one of the spouses receives earned income, a portion shall be attributed to the other spouse.

That portion shall be equal to 30% of such income, but may not exceed BEF 270 000.

2. Where the earned income of one of the spouses, within the meaning of Articles 2 and 3, is less than 30% of the aggregate earned income of both spouses, there shall be attributed to him a portion of the earned income of the other spouse which, together with his owned earned income, enables him to attain 30% of that total, subject to a maximum of BEF 270 000.'

- Law of 28 December 1990 concerning various fiscal and non-fiscal provisions

Article 21

`Article 1 of the Law of 7 December 1988 making changes regarding income tax and taxes assimilated to stamp tax shall be supplemented by the following paragraph:

There shall also be regarded as separate taxpayers those taxpayers whose spouses receive earned income which is exempted under a convention and is not taken into account for calculation of the tax levied on other income of the household, as regards any amount in excess of BEF 270 000.'

- 1992 Income Tax Code

Article 87

`Where the assessment is made in the name of both spouses and only one of them receives earned income, a portion thereof shall be attributed to the other spouse.

That portion shall be equal to 30% of such income, subject to a maximum of BEF 270 000.'

Article 88

`Where the assessment is made in the name of both spouses and the earned income of one spouse is less than 30% of the aggregate earned income of both spouses, there shall be attributed to that spouse a portion of the earned income of the other spouse which, together with his own earned income, enables him to attain 30% of that total, subject to a maximum of BEF 270 000.'

Article 128

`For the application of this section and calculation of the tax, married persons shall be regarded not as spouses but as separate taxpayers:

...

4. Where a spouse receives earned income which is exempt under a convention and is not taken into account for calculation of the tax levied on the other income of the household, as regards any amount exceeding BEF 270 000.

In such cases, there shall be two distinct levies and the amount of tax shall be determined, for each of the persons concerned, on the basis of his own income and that of his children which is available to him by operation of law.'

Case-law of the Court of Justice concerning the exemption at issue (Article 13 of the Protocol and related provisions)

6 The Court of Justice has given seven judgments (3) on the scope of the exemption from national taxes contained in Article 13 of the Protocol (or in equivalent previous provisions) and its relation to certain national taxes. Rather than listing the cases chronologically, I shall group them together on the basis of their content.

(i) Judgments in which the Court has taken the view that the exemption did not preclude the levying of certain national taxes

7 In its judgment of 8 February 1968 in Van Leeuwen, (4) the Court considered the exemption at issue (5) in relation to a Dutch school levy, the amount of which varied according to the amount of income tax paid by the parents. The Court stated that the exemption provided for in the Protocol referred to all national taxes on salaries, no matter what form such taxes took or whatever they were called, but not to `the charges and dues required as a consideration for a given service supplied by public authorities'. That was the case even if `the amount of the charge to be paid is determined by reference to the income of the person concerned.' Therefore, the Dutch authorities could take into account the salary paid to an EEC official when calculating his liability for the charge.

8 In its judgment of 3 July 1974 in Brouerius van Nidek, (6) the Court stated that death duties do not constitute `national taxes on salaries, wages and emoluments paid by the Communities' as referred to in Article 13 of the Protocol. Therefore, succession duty may be levied in a Member State on the survivor's pension paid by the Community to an official's widow, even if that pension is considered to be an emolument paid by the Community.

9 In its judgment of 22 March 1990 in Tither, (7) the Court held that Article 13 of the Protocol did not preclude a national provision which made the grant of a subsidy (in that case a subsidy for the acquisition or improvement of private dwellings) conditional on its beneficiaries having a taxable income lower than a certain tax band, which might include the earned income of Community officials. Article 13 of the Protocol does not require Member States to grant officials and other servants of the Community the same subsidies as those paid to beneficiaries determined in accordance with the relevant national provisions. Article 13 merely requires that, whenever such persons are subject to certain taxes, they are able to enjoy any tax advantage normally available to taxable persons, so as to prevent those persons from being subject to a greater tax burden.

10 Finally, in its judgment of 25 May 1993 in Kristoffersen, (8) the Court of Justice held that the second paragraph of Article 13 of the Protocol must be interpreted as meaning that the application of income tax on the basis of the rental value of the home belonging to the official or servant of the Communities, in relation to immovable property owned by him, does not constitute indirect taxation of salaries, wages and emoluments paid by the Communities.

(ii) Judgments in which the Court has taken the view that the exemption did preclude the levying of certain national taxes

11 In its judgment of 16 December 1960 in Humblet v Belgian State, (9) the Court examined a Belgian surtax which was levied on the combined income of the spouses and which, in the case of Mr Humblet, who was an ECSC official, meant that his net income was added to his wife's income for the purpose of calculating her tax liability. The Court of Justice held that this was contrary to the provision in question, (10) which indicated `clearly and unambiguously exemption from any fiscal charge based directly or indirectly on the exempted remuneration.' The Court considered that it was necessary for the Community to be able to determine the net income of its officials, because only then could the institutions evaluate the services of their officials and the officials assess the post offered to them. Moreover, exemption from national taxes was indispensable in order to guarantee the equality of remuneration for officials of equal rank but different nationality. The judgment concluded by stating that `any taxation, direct or indirect, of income which is not within the jurisdiction of the Member States' must be excluded.

12 In its judgment of 13 July 1983 in Forcheri v Belgian State, (11) the Court of Justice stated that enrolment fees for vocational courses required by the Belgian authorities only from foreign students (amongst them the spouses of Community officials because those officials do not `pay taxes to the Belgian Treasury') constituted discrimination by reason of nationality, which is prohibited by Article 7 of the Treaty. With relevance to the present case, paragraph 19 added: `As regards the special position of an official of the Communities and his family it must be remembered that the official is bound by Article 20 of the Staff Regulations normally to reside in the place in which he is employed. Moreover, although under the second paragraph of Article 13 of the Protocol [...] he is exempt from national taxes on salaries, wages and emoluments paid by the Communities, he is liable on the other hand, under the first paragraph of the same article, to a tax for the benefit of the Communities on salaries, wages and emoluments from which the host Member State, as a member of the Communities, benefits indirectly.'

13 In its judgment of 24 February 1988 in Commission v Belgium, (12) the Court examined whether a Belgian law which levied a direct tax on income generated by immovable assets situated in Belgium was compatible with Article 13 of the Protocol. The tax was borne by the owner but the tenant's circumstances were taken into account and could lead to a reduction in the tax rate. In actual fact, the amount of the tax was passed on to the tenant. However, the reductions granted depending on the tenant's circumstances (which were deducted from the rent regardless of any agreement to the contrary) were not applicable if the residence was occupied `by a tenant who, either himself or on account of his spouse, is exempt from the tax on natural persons by virtue of international conventions' (which was the case when the tenant or his spouse was a Community official). The Court held that that legislation was not compatible with Article 13 of the Protocol which `precludes any national tax, regardless of its nature and the manner in which it is levied, which is imposed directly or indirectly on officials and other servants of the Communities by reason of the fact that they are in receipt of remuneration paid by the Communities, even if the tax in question is not calculated by reference to the amount of that remuneration.' So, if the tenant or his spouse were Community officials but, on the other hand, were entitled to a reduction, they had to bear an additional financial burden `for the precise reason that they are in receipt of remuneration which is exempt from national taxes.'

The first question referred for a preliminary ruling

14 I shall begin by pointing out that the problem is a difficult one and that there are sound arguments for and against each solution. This is illustrated, in particular, in the approach taken by the Commission which, after maintaining officially that the Belgian law was incompatible with Article 13 of the Protocol, (13) is now upholding the opposite view before this Court.

15 The fundamental difficulty lies in the fact that the Belgian legislation has adopted a tax mechanism which, although not levied directly on the salaries of Community officials (a point on which all the parties are agreed), nevertheless takes them into consideration for income tax purposes, with adverse effects for the tax burden which those officials or their spouses have to bear. We therefore need to consider whether the Belgian tax system has thereby imposed an indirect levy on the salaries received by Community officials.

16 I think it is important to remember the ratio legis of Article 13 of the Protocol. At first, (14) the Court of Justice linked the exemption to the equality of remuneration for officials, irrespective of their nationality or domicile, and to the Community's exclusive power to determine the conditions of work - amongst them the financial conditions - of its officials and servants. The judgment in Humblet, in which this argument is developed, was given at a time when the Communities had not yet introduced their own specific tax on the salaries of Community officials.

17 The provisions of Article 13 of the Protocol in respect of that tax having now been implemented, the exemption from national taxes takes on its full significance, because it is no longer linked only to the above two objectives but also to the existence of a single levy on the salaries of officials.

18 This line of argument is clearly explained in the judgment in Brouerius van Nidek, when the close connection between the first and second paragraphs of Article 13 of the Protocol is examined:

`... This second paragraph cannot be read in isolation from the first, which provides that ... officials and other servants of the Communities shall be liable to a tax for the benefit of the Communities on salaries, wages and emoluments paid to them by the Communities.

It is as a result of this liability that the second paragraph exempts salaries, wages and emoluments from national taxes, so that the article taken as a whole ensures a uniform treatment of the said salaries, wages and emoluments for all the officials and servants of the Communities, preventing, firstly and chiefly, their effective remuneration from differing according to their nationality or fiscal domicile as a result of the assessment of different national taxes, and secondly preventing this remuneration from being inordinately taxed as a result of double liability.' (15)

19 In my opinion, this is the key to understanding the exemption at issue. We often tend to forget that the remuneration of Community officials is subject, at source, to a specific, progressive tax (16) which is paid into the Community's resources and, to that extent, benefits each and every one of the Member States. (17) For their part, the Member States have undertaken not to subject that income again, either directly or indirectly, to taxes similar to the Community tax. Obviously, that does not prevent the Member States from levying tax on any other income, whether earned income or not, of Community officials or members of their family.

20 Having described the ratio legis of the provision, I think it is necessary to define its scope. Although the term applied to the officials by Article 13 of the Protocol is `exempt', a more appropriate fiscal term would be `not liable' (or excluded from the scope of the national tax law), because the specific objective of Article 13 of the Protocol is to keep the remuneration of Community officials outside the scope of national laws governing the taxation of earned income.

21 At first glance the differences between the two expressions may seem insignificant from a practical point of view, but I believe they are relevant. Even the Belgian Government acknowledges, in its written observations, that the case-law of the Court of Justice prevents it from `taking into account' Community remuneration. Indeed, for the reasons already stated, such remuneration is removed and immune from the fiscal authority of the Member States as far as income tax is concerned. The States cannot draw - either from the fact that it exists or from the amount of it - any fiscal consequences in respect of income tax, for the purposes of which that remuneration does not, in fact, exist. Therefore the most appropriate term to describe this fiscal phenomenon is non-liability.

22 Starting from that premiss we need to analyse the Belgian tax regulations described above. In that regard, it may be stated that the parties are agreed on the following points:

(a) The `marital allowance' scheme constitutes a tax relief or benefit for its beneficiaries (taxpayers liable to Belgian income tax), whose income tax assessments are consequently reduced.

(b) Community officials are denied the benefit of the scheme for the precise and sole reason that they receive a Community salary of more than BEF 270 000: this circumstance is taken into account by Belgian law to exclude them from the married couple's tax scheme and regard them as separate or independent taxpayers and, therefore, as not qualifying for the marital allowance.

(c) In the present case, as the order for reference states, `It is undisputed that the result of applying Article 128(4) of the 1992 Income Tax Code and of taking account of the exempted income of Ms Massart is that a heavier tax is levied on the income of Mr Vander Zwalmen than the tax to which he would have been liable had the exempted income not been received.'

23 The Commission maintains that Article 13 of the Protocol does not preclude a refusal to grant Community officials a tax benefit or relief in the nature of a marital allowance if those officials do not `satisfy the objective conditions for qualifying for it.' That argument might be accepted if it were not the case that the specific cause of the exclusion under Belgian Law is the fact of being a Community official earning a salary from the Community of more than BEF 270 000.

24 The fact of the matter is that Belgian law is creating a specific category (18) of taxpayers (to whom it gives the inconcise description of recipients of `income that is exempted under a convention, in excess of BEF 270 000 [...]'), introduced ad hoc for Community officials or similar people, by reason of their exempted incomes. By so doing it modifies, in relation to them, the objective conditions which it usually requires to be met by taxpayers who receive the marital allowance.

25 That modification derives from the Law of 28 December 1990 and is clearly apparent in Article 88 of the 1992 Income Tax Code which lays down two conditions for the granting of the marital allowance: the couple must be spouses and one of them must not receive earned income of more than 30% of the total earned income of both spouses, subject to a maximum of BEF 270 000. As the `ordinary' application of those conditions could not include the exempted income of the spouse who was a Community official, the Belgian legislation alters, in their respect, the often mentioned `objective conditions' and opts for the tax fiction of deeming not to be spouses people who actually are. It thus solves the problem by abolishing, for this situation, the general category (spouses) and creating a fictitious, sui generis category (married people who are not spouses) for Community officials or other people in an equivalent situation.

26 The direct result of that legislative mechanism is that Community officials, merely because they receive their salaries from the Community, are denied the opportunity of receiving a tax benefit or relief which they otherwise could receive (and which, in fact, they had been receiving without question until the law was amended in 1990).

27 The arguments put forward by the Belgian Government, by the Commission and, partly, by the national court seek to present this amendment to Belgian law as made in deference to the principle of equality: if the `marital allowance' is not granted to married couples subject to Belgian tax, in which one of the spouses receives earned income of more than BEF 270 000, why should it be granted to married couples in which one of the spouses is a Community official who, in that capacity, receives earned income of more than that amount?

28 I admit that, at first glance, this argument is attractive and seems to support the application of the principle of progressive income tax, whereby the person who earns more must pay more. However, the semblance of equality fades when we consider the following key point: a married couple subject to Belgian tax, in which one of the spouses receives earned income of more than BEF 270 000, has not already had tax levied directly on that income. On the other hand, in a married couple made up of a Community official and his spouse, the former's earned income has already been subject to a specific Community tax, also with a progressivity component, which is equivalent to national income tax. Taking this income, which has already been taxed, into account again as a decisive factor for refusing its recipient a tax benefit to which he would otherwise be entitled constitutes double taxation with regard to one type of tax (income tax). It is precisely to avoid this undesired effect that Article 13 of the Protocol provides that such income is to be exempt from national taxes.

29 That is, essentially, why the Court of Justice held, in its judgment of 16 December 1960 in Humblet v Belgian State, that `if the Member States were able to include the remuneration of Community officials in the total taxable income for the purpose of determining the rate applicable to other income, the abovementioned differentiation would be the result not only of variations between the tax scales under the different national laws, that is of factors outside the Community, but also of the application of different national laws to incomes which are covered by Community law and which Community law intended to be treated alike.' (19) The Court of Justice therefore concludes, in that case, `it is therefore an infringement of the Treaty to take into account the remuneration referred to in Article 11(b) of the Protocol (20) in order to calculate the rate applicable to other income of the person concerned.' (21)

30 To put it another way: if, as used to happen until the Belgian law was amended, the system of `marital allowance' applied to married couples in which one of the spouses was a Community official, that was because his earned income, as a Community official, could not be taken into account, in accordance with the exemption from national taxation provided by Article 13 of the Protocol. The amendment to Belgian law, which retains the system for taxpayers subject to income tax, refuses to apply it to Community officials by using the fiction of not considering them to be married for the purposes of that tax. The consequence of this fiction is not in fact to standardise the tax system for taxpayers in similar situations but to create a specific category of taxpayers characterised only by the fact that they receive earned income from the Community (or because they are in a similar situation), who are deprived of a tax benefit only for that reason.

31 It is not difficult to conclude that this situation is extremely similar to the one condemned by the Court of Justice in its judgment in Commission v Belgium, cited above. In that case, too, the Belgian legislation:

(a) created a specific tax category represented by a tenant `who, either himself or on account of his spouse, is exempt from the tax on natural persons by virtue of international conventions,' using an almost identical expression to the one used in the present case;

(b) abolished, for that category of taxpayers, a specific tax advantage or reduction which Community officials, as tenants, could be granted if, under Article 13 of the Protocol, their earned income was considered exempt.

32 In that judgment the Court replied that the fact that a person received Community remuneration, which is not subject to national taxes, could not mean that he had to bear `an additional charge, namely the difference between the amount resulting from the application of the normal rate of tax and that resulting from the application of the reduced rate ... .' If we transpose that principle to the present case, once the tax factor `rate of tax' has been replaced by the factor `tax reduction or advantage', the same reasoning is wholly applicable.

33 In fact, if the remuneration which the Communities pay to their officials, and on which they are already taxed at source, were likely to have an adverse impact (either by raising tax rates or by abolishing reductions) on the total amount of tax which they or their spouses have to pay on the rest of their income, the effectiveness of Article 13 of the Protocol would be seriously undermined. Once the process had started, there would be nothing to prevent the gradual introduction of legal provisions relating to `income exempted under a convention' in order to apply an ad hoc tax system to its recipients ... the ultimate result of which would be to bring their final (national) tax burden into line with that of all the other taxpayers subject to (national) tax. National tax on that remuneration, pushed out through the door of Article 13 of the Protocol, would come in again through the window of the individual provisions of each of the Member States.

34 For the rest, I have to admit that, in this case, we are only talking about a possible infringement of Community law and it is pointless to analyse aspects such as the social, economic or cultural factors (22) which have been the decisive cause of the refusal to grant the `marital allowance' to married couples in which one of the spouses is a Community official. Indeed, the Belgian authorities have referred ad nauseam to the decisive nature of those factors at various points in their documents and arguments but have not defined their character, scope or content, which is surprising.

35 Oddly enough, this point remains unresolved following judgment 2/95 of 12 January 1995, (23) in which the Belgian Tribunal d'Arbitrage (Court of Arbitration) considers whether the rule at issue is consistent with Articles 10 and 11 of the Belgian Constitution, (24) and the aforementioned economic and social factors are raised, amongst others. That legal decision is concerned with a problem identical to the one in this case. The applicant, Mr Micha, refers to the unwarranted discrimination introduced by the aforementioned rule between taxpayers married to officials of supranational institutions and other taxpayers. The applicant also mentions that the Belgian authorities have failed to explain the factors which give rise to that discrimination. However, the authorities' reply is far from convincing. The Council of Ministers has said in this regard: `First, it cannot be maintained that, in 1988, the legislature wished to grant the marital allowance in cases such as Mr Micha's. Nevertheless, and even if that were the position, there is nothing to preclude the legislature, if it is in possession of more detailed information, from subsequently adopting the contrary decision'. (25)

The reasons given are not at all satisfactory. The Belgian authorities give no valid grounds to support such a significant legislative change, nor do they specify the nature of the information they received subsequently, which caused them to adopted a decision contrary to the previous one. This lack of clarity casts doubt on the Belgian authorities' true intention in undertaking the fiscal reform which is being analysed in this case, especially if the measure at issue is placed in the historical context of the judgments in Humblet v Belgian State, Forcheri v Belgian State and Commission v Belgium, which have revealed several attempts on the part of the Kingdom of Belgium to increase the tax burden on officials of the European Communities in breach of the privileges and immunities conferred on them by Community law.

36 I therefore suggest that the Court of Justice replies to the first question referred for a preliminary ruling by stating that Article 13 of the Protocol, by establishing the exemption from national taxes on the salaries, wages and emoluments paid by the Communities to their officials and servants, precludes the refusal by a national law to grant those officials and servants, or their spouses, a tax reduction or advantage for the sole reason that they receive that income, or that such income is of a certain amount. This conclusion is applicable to a tax law which, in order to achieve the same result, treats a married couple in which one member receives income of that kind as comprising `separate taxpayers' and not spouses.

The second question referred for a preliminary ruling

37 By the second question on which it seeks a preliminary ruling, the Cour d'Appel, Brussels, seeks to create a connection between two tax consequences, for the purpose of a possible `set-off': could the removal of the `benefit of the marital allowance' from Community officials, who are regarded, by operation of law, as separate taxpayers, not be offset by the final reduction in the assessment arising out of the fact that the incomes of the spouses are not combined and that, given the progressive nature of the tax, the application of a higher rate is therefore avoided?

38 In my view, this argument is vitiated by a fundamental flaw, which is that it disregards the personal situation of each taxpayer in relation to the nature of his taxable income. Depending on the income, on the combined or separate treatment prescribed by the tax laws and on the other features peculiar to each case, separate taxation will be more or less advantageous for any given couple. Sometimes, but not always, the `tax saving' made by keeping spouses' incomes separate and therefore subject to lower tax rates is greater than the result of applying the `marital allowance'. Clearly, this was not the case for the applicants, as the order for reference acknowledges.

39 The decisive point, however, is that the removal of even the opportunity of applying the marital allowance, which is a tax advantage denied to Community officials by reason of their exempted incomes, is contrary to Article 13 of the Protocol.

40 On that premiss, and in the absence of de minimis rules on the matter - because what is involved is an infringement of primary Community law - a possible set-off against other hypothetical `tax savings', arising out of separate taxation, is not enough to change the fact that the national tax law is incompatible with Article 13 of the Protocol. That follows clearly from the judgment of 28 January 1986 in Commission v France (26) which, although concerned with a point of company law, could, by analogy, be applied to the present case. (27)

41 In my opinion, therefore, the preclusion by Community law of a tax law such as the one examined here is not affected by the fact that the separate taxation of the spouses, imposed by that law, may, in some cases, result in a reduction in the final tax assessment.

Conclusion

42 I therefore propose that the Court of Justice should reply to the questions on which a preliminary ruling is sought by the Cour d'Appel, Brussels, as follows:

Article 13 of the Protocol, on the Privileges and Immunities of the European Communities, which exempts the salaries, wages and emoluments paid by the Communities to their officials and servants from national taxes, precludes a national law which deprives those officials and servants, or their spouses, of a tax reduction or advantage for the sole reason that they receive such income, or a certain level of such income. This conclusion is applicable to a tax law which, in order to achieve the same result, regards a married couple in which one member receives income of that kind as comprising `separate taxpayers' rather than spouses, and preclusion by Community law of the said rule is unaffected by the fact that, in some cases, separate taxation gives rise to a reduction in the final tax assessment.

(1) - See point 5 below.

(2) - See Article 295 of the 1964 Income Tax Code and Article 394 of the 1992 Income Tax Code.

(3) - I am not including here the judgment in Case 23/68 Klomp [1969] ECR 43, because in that case the Court was asked to decide whether Article 11(b) of the Protocol on the Privileges and Immunities of the ECSC was applicable when the official was required to pay contributions to a national social security scheme which were not in the nature of a tax.

(4) - Case 32/67 [1968] ECR 43.

(5) - The exemption was at that time contained in Article 12 of the Protocol on the Privileges and Immunities incorporated as an annex to the EEC Treaty.

(6) - Case 7/74 [1974] ECR 757.

(7) - Case C-333/88 [1990] ECR I-1133.

(8) - Case C-263/91 [1993] ECR I-2755.

(9) - Case 6/60 [1960] ECR 559.

(10) - This case related to Article 11(b) of the Protocol on the Privileges and Immunities of the ECSC.

(11) - Case 152/82 [1983] ECR 2323.

(12) - Case 260/86 [1988] ECR 955.

(13) - The fact that infringement proceedings were brought against Belgium in respect of this matter, after a letter of formal notice, is mentioned in two of the Annual Reports (the ninth and eleventh) on monitoring the application of Community law, submitted by the Commission to the European Parliament (OJ 1992 C 250, p. 1 et seq., especially p. 42, and OJ 1994 C 154, p. 1 et seq., especially p. 55). In a written reply to a parliamentary question, the Commission also stated that it had informed `the Belgian Government that it considers that the law in question ... appears to be incompatible with the second paragraph of Article 13 of the Protocol ... . The law might therefore constitute an infringement of Community law' (OJ 1991 C 259, p. 24). In the Thirteenth Report to the European Parliament on monitoring the application of Community law (OJ 1996 C 303, p. 1 et seq., especially p. 60) the Commission stated that it had terminated the infringement proceedings because the `Belgian Court of Arbitration held in a case decided on in January 1994 [to determine whether the law was compatible with the Belgian Constitution] that the relevant provisions were not unconstitutional.'

(14) - In this connection, see the judgment in Humblet, cited above, in which the reasoning I have mentioned appeared for the first time.

(15) - Emphasis added.

(16) - See Regulation (EEC, Euratom, ECSC) No 260/68 of the Council of 29 February 1968, laying down the conditions and procedure for applying the tax for the benefit of the European Communities (OJ, English Special Edition 1968 (I), p. 37), as amended.

(17) - See, in this connection, the statements made by the Court of Justice in the Forcheri judgment, transcribed in point 12.

(18) - In the order for reference, the Cour d'Appel, Brussels refers to the creation of a `distinct category of taxpayers by reason of the fact that one of them is a European official ... .'

(19) - At p. 580.

(20) - This refers to the Protocol on the Privileges and Immunities of the ECSC, mentioned in footnote 10.

(21) - At p. 580.

(22) - According to the Belgian authorities, the system is intended to support families and children and to recognise the value of a spouse's work in the home.

(23) - Moniteur Belge, 3 March 1995, p. 4862.

(24) - It is maintained that Article 21 of the Law of 28 December 1990, concerning various fiscal and non-fiscal provisions, might constitute an infringement of Articles 10 and 11 of the Constitution by making an unwarranted and unreasonable distinction between taxpayers.

(25) - Paragraph A.3 of the judgment of 12 January 1995, cited in footnote 23. Unofficial translation.

(26) - Case 270/83 [1986] ECR 273.

(27) - [1986] ECR 305, paragraph 21. `Notwithstanding the French Government's argument to the contrary, the difference in treatment also cannot be justified by any advantages which branches and agencies may enjoy vis-à-vis companies and which, according to the French Government, balance out the disadvantages resulting from the failure to grant the benefit of shareholders' tax credits. Even if such advantages actually exist, they cannot justify a breach of the obligation laid down in Article 52 ...'.