WRITTEN QUESTION E-2485/03 by Ria Oomen-Ruijten (PPE-DE) to the Commission. Double taxation conventions and Regulation (EEC) No 1408/71.
Date: 2003-07-24
Institutions: European Parliament, Provisional data
Subjects: double taxation, social security, tax convention, tax law, tax on income, tax system

27.3.2004

EN

Official Journal of the European Union

C 78 E/743

The report on the application of the Directive that the Commission must present before the Parliament
and Council before the 31 December 2004 (Article 1.5 of Directive 2002/39/EC (3)) appears to be an
occasion that the Commission could use to propose further action, should this necessity be perceived.

(1) Case No COMP/37.821 (cid:1) Deutscher Verband für Post und Telekommunikation E.V./Deutsche Post AG.
(2) Directive 97/67/EC of the Parliament and of the Council of 15 December 1997 on common rules for the
development of the internal market of Community postal services and the improvement of quality of service,
OJ L 15, 21.1.1998.

(3) Directive 2002/39/EC of the European Parliament and of the Council of 10 June 2002 amending Directive 97/67/

EC with regard to the further opening to competition of Community postal services, OJ L 176, 5.7.2002.

(2004/C 78 E/0791)

WRITTEN QUESTION E-2485/03

by Ria Oomen-Ruijten (PPE-DE) to the Commission

(24 July 2003)

Subject: Double taxation conventions and Regulation (EEC) No 1408/71

In practice, workers who are employed in more than one EU Member State, for example in international
road haulage, often find themselves the victims of unfavourable combinations of social insurance costs in
one country (where their employer is based) and levying of income tax in their country of residence for
days spent working outside the country where their employer is based. The regulation coordinating social
security schemes ((EEC) No 1408/71 (1)) and bilateral double taxation conventions do not mesh together
smoothly.

Do the allocation rules

1.
corresponding rules in the multilateral Regulation (EEC) No 1408/71 or vice versa?

in bilateral double taxation conventions

take precedence over

the

Is it contrary to EU legislation if Member States agree allocation rules in a double taxation

2.
convention which deviate from the principles laid down in Regulation (EEC) No 1408/71?

3. What does the Commission consider to be the significance of consideration 32 in the recent
judgment in the case of Gottardo, C-55/00 (‘With regard to a bilateral
international treaty concluded
between a Member State and a non-member country for the avoidance of double taxation, the Court has
pointed out that, although direct taxation is a matter falling within the competence of the Member States
alone, the latter may not disregard Community rules but must exercise their powers in a manner
consistent with Community law (…)’)?

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

Answer given by Mrs Diamantopoulou on behalf of the Commission

(11 September 2003)

The Commission would like to inform the Honourable Member that Regulation (EEC) No 1408/71 of the
Council (1) creates a system for co-ordinating national social security schemes of the Member States and
contains a series of provisions which determine the national legislation to apply in a given case. These
provisions aim to ensure that persons who have exercised their right to free movement are subject to the
legislation of only one Member State, i.e. the State of employment, and that, as a result, they must pay
social security contributions only in the Member State whose legislation is applicable.

As for the allocation rules in bilateral double taxation conventions,
in the absence of a Community
unifying or harmonising measure the Member States retain the power to lay down criteria for taxing
income and savings with a view to eliminating double taxation, if necessary by means of conventions. In
this respect, within the framework of bilateral conventions the Member States are free to define attachment
factors for the purposes of allocating tax jurisdiction.

C 78 E/744

Official Journal of the European Union

EN

27.3.2004

There is no relationship, let alone a hierarchical relationship, between the provisions of Regulation (EC)
No 1408/71 and those of bilateral double taxation conventions. It follows that the dispute rules laid down
in these two types of instrument apply within their respective fields of application.

As far as employment income (dependent activities) is concerned, and particularly in the case of drivers,
the Commission notes that double taxation conventions between the Member States use criteria for
allocating tax jurisdiction (e.g. the employee’s place of residence, the employer’s place of residence or the
place where the activity is carried out) which do not always correspond to the allocation criteria laid down
in Regulation (EEC) No 1408/71. However, the Commission does not consider that this difference in the
allocation rules per se represents an infringement of Community law.

The Commission considers that paragraph 32 of the judgment of the European Court of Justice in
Gottardo (C-55/00) confirms its earlier judgment in Gilly (C-336/96). According to that judgment, in the
absence of European harmonisation in the area, the Member States are free to lay down criteria for
allocating tax jurisdiction in bilateral double taxation conventions. However, when doing so, they must
respect the fundamental principles of the EC Treaty.

(1) Latest consolidated version: Regulation (EC) No 118/97 of the Council of 2 December 1997 amending and
updating Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed
persons, to self-employed persons and to members of their families moving within the Community, OJ L 28,
30.1.1997.

(2004/C 78 E/0792)

WRITTEN QUESTION E-2494/03

by Christopher Huhne (ELDR) to the Commission

(25 July 2003)

Subject: Pensions

1. Will the Commission estimate the proportion of each Member State’s pension age population that is
in receipt of some pension based on a funded or private sector scheme?

2. Will the Commission estimate the proportion of each Member State’s working age population that is
currently contributing to a funded pension scheme whether private or public?

3. Will the Commission estimate how many privately funded pension schemes in each Member State
are currently declaring that they are unable to meet their existing obligations at current levels of the
financial markets?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(26 August 2003)

The joint report of the Council and the Commission on adequate and sustainable pensions adopted in
March 2003 (1) summarises in its table 3 (pages 31-32) information obtained from the Member States’
authorities on the importance of private pension provision, mainly through occupational pensions. The
table provides for most Member States information on the proportion of employees contributing to private
pension schemes and pensioners receiving benefits from such schemes.

Moreover, Eurostat has started collecting data on active, deferred and retired members (2) of autonomous
pension funds. The figures below reflect the situation in 2001:

Belgium

Denmark

Number of active members

269 835

11 404

Number of deferred
members

56 631

NA

Number of retired persons

67 609

10 337