WRITTEN QUESTION E-3846/02 by Ieke van den Burg (PSE)and Wilfried Kuckelkorn (PSE) to the Commission. European law aspects of German benefits to promote home ownership (Eigenheimzulagen).
Date: 2003-01-09
Institutions: European Parliament, Provisional data
Subjects: Germany, acquisition of property, equal treatment, free movement of workers, frontier worker, interpretation of the law, residence, social-security benefit, tax relief

6.2.2004

EN

Official Journal of the European Union

C 33 E/27

(2004/C 33 E/025)

WRITTEN QUESTION E-3846/02

by Ieke van den Burg (PSE)
and Wilfried Kuckelkorn (PSE) to the Commission

(9 January 2003)

Subject: European law aspects of German benefits to promote home ownership (‘Eigenheimzulagen’)

1.
In Germany, there are a number of benefits which have the purpose of promoting home ownership.
These are known as the ‘Eigenheimzulage’ (including a supplement for children, the ‘Kinderzulage’). Do
they constitute social and/or tax advantages pursuant to Regulation No 1612/68 (1) (Article 7(2)/(4))?

2.
If so, to which of these advantages is a frontier worker entitled who works in Germany while
residing in another Member State where he has his home and where he is not entitled to tax advantages to
promote home ownership if he is liable to tax without restriction and is covered by social insurance in
Germany?

Is a frontier worker who is liable to tax to a limited extent and has social

3.
Germany pursuant to Regulation No 1408/71 (2) entitled to the ‘Kinderzulage’ and/or ‘Eigenheimzulage’?

insurance cover in

If a frontier worker who is liable to tax either without restriction or to a limited extent is entitled to
is it permissible to terminate the benefit if the worker resigns from his job, is

4.
the ‘Eigenheimzulage’,
dismissed for any reason, is declared unfit for work or retires?

(1) OJ L 257, 19.10.1968, p. 2.
(2) OJ L 149, 5.7.1971, p. 2.

Answer given by Mr Bolkestein on behalf of the Commission

(27 March 2003)

Under Articles 12, 39 and 43 of the EC Treaty, migrant workers and self-employed persons have the

1.
right to equal tratment with workers of the host Member State.

The ‘Eigenheimzulage’ (and its component Kinderzulage) are not granted specifically for workers, but for
everybody. It is a general promotion scheme for home ownership. These benefits to encourage home
ownership (cid:1) currently subject to modification by the German legislator (cid:1) are linked to the status of being
subject to unlimited tax liability. Consequently, all workers subject to German tax without limitation are
eligible.

Under article 7 of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of
movement for workers within the Community, migrant workers have the right to equal treatment in ‘tax
and social advantages’ as workers of the host Member State. The European Court of Justice has defined
these as: ‘all the advantages which, whether or not linked to a contract, are generally granted to national
workers primarily because of their objective status as workers or by virtue of the mere fact of their
residence on the national territory and whose extension to workers who are nationals of other Member
States therefore seems likely to facilitate the mobility of such workers within the Community (1).’

In so far as the ‘Eigenheimzulage’ is to be regarded as an advantage covered by Article 7 (2) of Regulation
(EEC) No 1612/68, persons covered by that Regulation are entitled to it so long as they fulfil the general
conditions are met.

However, it is far from clear that Article 7 (2) should be extended to cover all benefits related to tax status.
While it is important to ensure that individuals are not deprived of entitlement to benefits when they
exercise their right of free movement, it is also important to avoid overlapping benefits.

C 33 E/28

Official Journal of the European Union

EN

6.2.2004

Under German legislation as it now stands, one of the conditions for grant of the benefits is
2.
unlimited tax liability, a status which a non-resident is granted on demand if more than 90 % of his
income is subject to German income tax or if his income not subject to German tax does not exceed
EUR 6 136. A further condition is that the house must be in Germany.

The Commission considers that the condition regarding the location of the house is incompatible with
Community law and has therefore launched an infringement procedure (No 1999/4943).

The 90 % threshold requires some examination. What is important as a matter of Community law is
whether the state of residence is in a position to take into account the taxpayer’s personal and family
circumstances, in order to grant him the corresponding tax or related advantages (2). It is not immediately
apparent whether or not a fixed 90 % threshold corresponds to that criterion, which relates to the
particular situation of the taxpayer.

3.
Under current German legislation a frontier worker in the situation described is not entitled to
‘Eigenheimzulage’ (and its component ‘Kinderzulage’), not only because he is only liable to German tax to a
limited extent, but also because his home is not in Germany.

As has already been noted, the Commission considers that the condition of the location of the house is
unacceptable.

For the reasons already mentioned,
examination.

the condition relating to unlimited tax liability requires closer

4.
As long as the frontier worker remains subject to German tax without restriction, he will be entitled
to the benefit. That situation will most frequently come to an end when he ceases to be employed and
instead receives a pension taxabloe in his Member State of residence.

(1) Case C-85/96, Martinez Sala ECR, [1998] I-02691.
(2) Case C-279/93 Schumacker [1995] ECR-I-225.

(2004/C 33 E/026)

WRITTEN QUESTION E-3904/02

by Nelly Maes (Verts/ALE) to the Commission

(14 January 2003)

Subject: Financial assistance to Rwanda and Uganda

On Tuesday, 3 December, the European Parliament’s Committee on Development and Cooperation held a
debate with experts on the UN report,
‘Illegal Exploitation of Natural Resources and Other Forms of
Wealth of the Democratic Republic of the Congo’. Despite the so-called withdrawal of foreign troops, the
plundering of Congo’s natural resources is continuing unabated. The UN panel reported the existence of a
leaders and military personnel from Rwanda and Uganda.
network involving senior politicians, rebel
Together with Zimbabwe, they have organised matters so as to avoid losing their control over diamonds,
cobalt, copper, germanium, gold, coltan and timber.

In the light of this, might it not be desirable to bring pressure to bear by making part of the aid given to
these countries (cid:1) which directly or indirectly benefits their governments (cid:1) conditional on such criteria as
the complete withdrawal of their troops from Congo, a complete cessation of support for rebel groups in
Congo and practical measures by those countries to put an end to the unlawful exploitation of natural
resources by civilians and military personnel from their countries in Eastern Congo?

Ought not the Commission to recommend that the Council consider ‘targeted sanctions’ against individuals
and businesses that promote this trade?

What support does the Commission give to Rwanda and Uganda?