WRITTEN QUESTION E-1745/96 by Cristiana Muscardini (NI) to the Commission (3 July 1996)

Subject: Tax refunds

The Community professes that there should be equal treatment between men and women in work-related and social security matters, although in practice such equality is often severely compromised.

For example, in the case of a joint income declaration, any refund is paid to the husband alone, which contradicts the principle of equal pay enshrined in Article 119 of the Treaty.

The ban on discrimination between men and women is a general principle of Community law which also applies indirectly to taxation.

How does the Commission intend to settle disputes of a fiscal nature, such as in the case of refunds based on joint income declarations, when they heavily penalize women, women's independence and the principle of equal opportunities?

Answer given by Mr Flynn on behalf of the Commission (18 September 1996)

In her question the Honourable Member highlights the fact that in the case of joint income declarations any refund is granted only to the husband and she emphasises that this contradicts the principle of equal pay enshrined in Article 119 of the EC Treaty.

Article 119 provides a global definition of pay which comprises the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer. Moreover the Court of Justice held that the concept of pay, within the meaning of Article 119, comprises any other consideration, whether in cash or in kind, whether immediate or future, provided that the worker receives it, albeit indirectly, in respect of his employment from his employer ((Barber, 262/88. ECR 1990, p. 1949. )).

Taxation does not come directly within the scope of Article 119. However, the taxation of income from work, in various forms (deduction, tax reductions, exemptions, deducted at source, refunds of taxes paid in excess) may directly affect the pay received by the worker. This reasoning has already been expounded by the Court in Biehl (Case C-175/88, ECR 1990, p. 1779). In this case, the Court stated that the principle of equal treatment with regard to remuneration would be rendered ineffective if it could be undermined by discriminatory national provisions on income tax. Hence, as regards Article 119, it can be assumed to apply to tax provisions that can be shown to directly affect the remuneration of female workers with the result that they do not receive the same as male workers in the same employment.

It is useful to recall that the Commission has devoted particular attention to taxation. Thus in 1984 it adopted a memorandum on income taxation and equal treatment for men and women ((Doc. COM(84) 695 final. )). Notably, this memorandum argued that the most neutral system with regard to the equality principle is separate taxation. The Commission intends to continue its actions in this domain and to this end it has already launched studies on the individualisation of rights in the context of social security, taxation and other related areas, drawing on the experience gained by the Member States. In the light of the findings, the Commission intends to adopt a communication on the individualisation of rights in 1995 which will analyse the impact of the existing systems on women's independence and their repercussions on equal opportunities.