L. H. Piatkowski v Inspecteur van de Belastingdienst grote ondernemingen Eindhoven.
Date: 2006-03-09
12. Under Article 49(1)(c)(4) of the WIB, income arising out of debts due from a company established in the Netherlands constitutes ‘taxable domestic income’ if the recipient has a significant interest in that company for the purposes of Article 20(a) of that law and that interest does not belong to the assets of a company.
The dispute in the main proceedings and the question referred for a preliminary ruling
19. As a preliminary point, it must be borne in mind that the objective of Regulation No 1408/71, as stated in the second and fourth recitals in the preamble, is to ensure free movement of employed and self-employed persons within the European Community, while respecting the special characteristics of national social security legislation. To that end, as is clear from the 5th, 6th and 10th recitals, that regulation upholds the principle of equality of treatment of workers under the various national legislation and seeks to guarantee the equality of treatment of all workers occupied on the territory of a Member State as effectively as possible and not to penalise workers who exercise their right to free movement (see Case C-68/99 Commission v Germany [2001] ECR I-1865, paragraphs 22 and 23, and Case C-249/04 Allard  [2005] ECR I-4535, paragraph 31).
20. The system put in place by Regulation No 1408/71 is merely a system of coordination, concerning inter alia, in Title II thereof, the determination of the legislation applicable to employed and self-employed workers who make use, under various circumstances, of their right to freedom of movement. It is inherent in such a system that the level of contributions to be paid in respect of the pursuit of the same activity will differ according to the Member State where that activity is wholly or partly pursued or according to the social security legislation to which that activity is subject (see, to that effect, Commission  v Germany , paragraph 29, and Joined Cases C-393/99 and C-394/99 Hervein and Others  [2002] ECR I-2829, paragraph 52).
21. Article 13 of Regulation No 1408/71, which is the first article of Title II on determination of the legislation applicable, provides in paragraph 1 thereof that, subject to Articles 14c and 14f, persons to whom the regulation applies are to be subject to the legislation of a single Member State only. As is apparent inter alia from the 5th, 8th and 10th recitals in the preamble to that regulation, the principle that the legislation of a single Member State is to apply in matters of social security is aimed at eliminating unequal treatment which, for employed and self-employed workers moving within the Community, is the consequence of partial or total overlapping of the applicable legislation (see, to that effect, Case C-169/98 Commission v France [2000] ECR I-1049, paragraph 43). Thus, according to Article 14a(2) of Regulation No 1408/71, a person normally self-employed in the territory of two or more Member States is to be subject to the legislation of the Member State in whose territory he resides (see Case C-340/94 De Jaeck  [1997] ECR I‑461, paragraph 11).
22. According to Article 14c(b) of Regulation No 1408/71, in the cases mentioned in Annex VII thereto, a person who is employed in one Member State and self-employed in another Member State is subject simultaneously to the legislation of each of those States. He is therefore required to pay such contributions as may be required of him by the legislation of each State ( De Jaeck , paragraph 39).
26. In interpreting a provision of Community law, however, it is necessary to consider not only its wording, but also the context in which it occurs and the objects of the rules of which it is part ( De Jaeck , paragraph 17, and Case C-17/03 VEMW and Others  [2005] ECR I-0000, paragraph 41).
27. To interpret Article 14c(b) of Regulation No 1408/71 as permitting double contributions to be levied in respect of the same income would penalise workers who exercise their right to free movement and thus would clearly run counter to the objective of that regulation. As the Court has held in relation to Article 14d(2) of Regulation No 1408/71, that provision requires Member States to treat workers subject to the provisions of Article 14c(b) thereof without discrimination as compared with workers pursuing all their activities in a single Member State (see, to that effect, Hervein and Others , paragraph 61).
29. Therefore, as regards income from gainful employment and income from self-employed activity, which may not, in any circumstances, be subject to double contributions, each of the Member States concerned can levy contributions only on the part of the income obtained in its territory (see, to that effect, De Jaeck , paragraph 40).
32. Since Community law does not detract from the power of the Member States to organise their own social security systems (Case C‑385/99 Müller-Fauré and Van Riet  [2003] ECR I-4509, paragraph 100), in the absence of harmonisation at Community level it is for the legislation of the Member State concerned to determine the conditions governing the right or duty to be insured with a social security scheme, the level of contributions payable by insured persons (see, in particular, Case C-512/03 Blanckaert [ 2005] ECR I-0000, paragraph 49) and the income to be taken into account when calculating social security contributions (Case C-18/95 Terhoeve  [1999] ECR I-342, paragraph 51).
33. All that is necessary, when the Member State concerned exercises that power, is that it comply with Community law (see, in particular, Terhoeve , paragraph 34, and Case C-227/03 Van Pommeren-Bourgondiën [2005] ECR I-0000, paragraph 39).
34. The Court has held, in this respect, that the EC Treaty offers no guarantee to a worker that extending his activities into more than one Member State or transferring them to another Member State will be neutral as regards social security. Given the disparities in the social security legislation of the Member States, such an extension or transfer may be to the worker’s advantage in terms of social security or not, according to circumstance. It follows that, even where its application is less favourable, such legislation is still compatible with Articles 48 and 52 of the Treaty if it does not place the worker at a disadvantage as compared with those who pursue all their activities in the Member State where it applies or as compared with those who were already subject to it and if it does not simply result in the payment of social security contributions on which there is no return (see, to that effect, Hervein and Others , paragraph 51).