Roman Bukovansky v Finanzamt Lörrach.
Date: 2015-11-19
33. That provision draws a distinction between the place of residence, situated in the territory of one Contracting Party, and the place where a paid activity is pursued, which must be in the territory of the other Contracting Party, irrespective of the nationality of the person concerned (see, to that effect, judgment in Ettwein , C‑425/11, EU:C:2013:121, paragraph 35). Under that provision, Mr Bukovansky must be classified as an ‘employed frontier worker’ for the purposes of the application of the Agreement on the Free Movement of Persons, since, moreover, it is common ground that, as a rule, he commutes every day, or at least once a week, between his place of residence and that of his employment.
36. In this regard, it should be noted that Article 9 of Annex I to the Agreement on the Free Movement of Persons, entitled ‘Equal treatment’, provides, in paragraph 2, a specific rule intended to provide the employed person and the members of his family with the same tax concessions and welfare benefits as those available to national employed persons and members of their families. In that context, it should be recalled that the Court has held that, with regard to tax concessions, the principle of equal treatment, laid down in that provision, may also be claimed by a worker who is a national of a Contracting Party, having exercised his right to free movement, with regard to his State of origin (see, to that effect, judgment in Ettwein , C‑425/11, EU:C:2013:121, paragraph 33 and the case-law cited and paragraphs 42 and 43).
37. Hearing requests for a preliminary ruling on the question of whether the agreements on double taxation concluded between the EU Member States must be compatible with the principle of equal treatment and, in general, with the freedoms of movement guaranteed by primary EU law, the Court has held that the Member States are free to determine the connecting factors for the allocation of fiscal sovereignty in bilateral agreements for the avoidance of double taxation, but are obliged, in exercising the power of taxation thus allocated, to observe that principle and those freedoms (see judgments in Gilly , C‑336/96, EU:C:1998:221, paragraph 30; Renneberg , C‑527/06, EU:C:2008:566, paragraphs 48 to 51; and Imfeld and Garcet , C‑303/12, EU:C:2013:822, paragraphs 41 and 42).
38. Consequently, where, in an agreement on double taxation concluded between the Member States, the criterion of nationality appears in a provision which is intended to allocate fiscal sovereignty, such differentiation based on nationality cannot be regarded as constituting prohibited discrimination (judgment in Gilly , C‑336/96, EU:C:1998:221, paragraph 30). As regards, by contrast, the exercise of fiscal sovereignty granted by such a provision, the Member State in which that sovereignty is vested must observe the principle of equal treatment.
40. As is clear from the preamble and from Articles 1(d) and 16(2) of the Agreement on the Free Movement of Persons, the latter is intended to achieve, in favour of EU nationals and those of the Swiss Confederation, the free movement of persons on the territory of the Contracting Parties to that agreement based on the rules applying in the European Union, the terms of which must be interpreted in accordance with the case-law of the Court of Justice.
41. Admittedly, Article 21 of the Agreement on the Free Movement of Persons provides that agreements on double taxation between the EU Member States and the Swiss Confederation are not affected by the provisions of that agreement. However, that article cannot have a scope that conflicts with the principles underlying the legislation of which it is part (see, by analogy, judgment in TNT Express Nederland , C‑533/08, EU:C:2010:243, paragraph 51). Article 21 cannot therefore be understood as allowing the EU Member States and the Swiss Confederation to undermine the attainment of the free movement of persons by depriving, in the exercise of fiscal sovereignty as allocated by their bilateral agreements on double taxation, Article 9(2) of Annex I to the Agreement on the Free Movement of Persons of its effectiveness.
44. In that regard, it must be stated that the objective of an agreement on double taxation, such as the German-Swiss Agreement, is to prevent the same income from being taxed in each of the two parties to that agreement; it is not to ensure that the tax to which the taxpayer is subject in one State is no higher than that to which he or she would be subject in the other contracting State (judgment in Gilly , C‑336/96, EU:C:1998:221, paragraph 46).
47. With regard to the principle of non-discrimination laid down in Article 2 of that agreement, it should be noted that that article prohibits, as a general rule, any discrimination on grounds of nationality. As Article 9 of Annex I to the Agreement on the Free Movement of Persons ensures the application of that principle in the area of the free movement of workers, there are also no grounds for concluding that there is discrimination contrary to Article 2 (see, by analogy, judgment in Werner , C‑112/91, EU:C:1993:27, paragraphs 19 and 20 and the case-law cited).