Judgment of the Court of 4 July 2023 in Case E-11/22 – RS v Steuerverwaltung des Fürstentums Liechtenstein (Article 28 EEA – Free movement of workers – Discrimination between resident and non-resident taxpayers – Tax legislation – Income tax – Equal treatment – Protocol 35 EEA – Principle of sincere cooperation – Principle of equivalence – Principle of effectiveness – State liability)
Date: 2023-07-04
Institutions: EFTA Court
Subjects: European Economic Area, Liechtenstein, equal treatment, personal income tax, tax collection, tax law, taxpayer, wage earner








C_202300365EN.000101.fmx.xml












Official Journal of the European Union


EN
Series C













C/2023/365


19.10.2023







            JUDGMENT OF THE COURT
         
of 4 July 2023
         
in Case E-11/22
RS v Steuerverwaltung des Fürstentums Liechtenstein

(Article 28 EEA – Free movement of workers – Discrimination between resident and non-resident taxpayers – Tax legislation – Income tax – Equal treatment – Protocol 35 EEA – Principle of sincere cooperation – Principle of equivalence – Principle of effectiveness – State liability)
(C/2023/365)

In Case E-11/22, RS v Steuerverwaltung des Fürstentums Liechtenstein – REQUEST to the Court under Article 34 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice by Verwaltungsgerichtshof des Fürstentums Liechtenstein (the Administrative Court of the Principality of Liechtenstein), concerning the interpretation of the Agreement on the European Economic Area, in particular Articles 3, 4 and 28 thereof,
the Court, composed of Páll Hreinsson, President (Judge-Rapporteur), Bernd Hammermann and Ola Mestad (ad hoc), Judges, gave judgment on 4 July 2023, the operative part of which is as follows:






1.


Article 28 of the EEA Agreement must be interpreted as precluding national legislation such as that at issue in the main proceedings, by which an EEA State applies a higher rate of taxation to income gained through employment activity in that State by EEA nationals who are not resident for tax purposes in that State, in comparison with those who are resident for tax purposes in that State.










2.


Protocol 35 to the EEA Agreement and Article 28 of the EEA Agreement must be interpreted as precluding an EEA State from applying a provision such as that at issue in the main proceedings, which has been deemed incompatible with Article 28 EEA.










3.


Individuals such as the applicant in the main proceedings may not be subjected to a higher rate of taxation on the basis of a national measure such as that at issue in the main proceedings. The referring court is required to draw the necessary consequences from the breach of EEA law and, within the scope of its powers, grant an effective remedy, including the repayment with interest of any taxes already paid in breach of EEA law. If that is not possible, the EEA State is obliged to provide compensation for loss and damage caused to individuals, such as the applicant in the main proceedings, in accordance with the principle of State liability.






ELI: http://data.europa.eu/eli/C/2023/365/oj
ISSN 1977-091X (electronic edition)