European Commission v Kingdom of Belgium.
Date: 2014-01-23
27. It has been consistently held that, whilst direct taxation falls within their competence, the Member States must none the less exercise that competence consistently with European Union law (see Case C‑387/11 Commission  v Belgium [2012] ECR, paragraph 36 and case-law cited).
The failure to fulfil obligations deriving from Article 56 TFEU
28. First, it must be observed that services provided in relation to savings pensions by financial institutions and insurance undertakings, including companies which are approved savings pension fund managers, are services within the meaning of Article 57 TFEU. Such services are services normally provided for remuneration, the essential characteristic of which lies in the fact that it constitutes consideration for the services in question (see Case C‑136/00 Danner [2002] ECR I‑8147, paragraph 26).
29. It must also be stated that, from the perspective of the single market, and in order to permit the achievement of its objectives, Article 56 TFEU precludes the application of any national rules which have the effect of making the provision of services, within the meaning of Article 57 TFEU, between Member States more difficult than the provision of services purely within one Member State (see Commission  v Denmark , paragraph 38, and Case C‑383/10 Commission  v Belgium [2013] ECR, paragraph 42).
31. The fact that contributions paid to a savings pension confer a right to the tax reduction provided for in Article 145/1, 5°, of the CIR 1992 solely if they are paid to financial institutions established in Belgium has the effect of rendering the freedom to provide savings pension services from other Member States more difficult than if it were purely within the Kingdom of Belgium. Those savings pension rules are liable to dissuade both Belgians liable to tax from subscribing to an individual or collective savings account or taking out savings insurance with financial institutions established in a Member State other than the Kingdom of Belgium and those institutions from offering their services on the Belgian market (see, to that effect, Danner , paragraph 31, and Case C‑522/04 Commission  v Belgium [2007] ECR I‑5701, paragraph 39).
32. It is clear, however, from well-established case-law, that national measures capable of hindering the exercise of fundamental freedoms guaranteed by the FEU Treaty or of making it less attractive may none the less be allowed if they pursue an objective in the public interest, are appropriate to ensuring the attainment of that objective, and do not go beyond what is necessary to attain the objective pursued (see, inter alia, Case C‑383/10 Commission  v Belgium , paragraph 49 and case-law cited).
33. Again, according to settled case-law, it is for the national authorities, where they adopt a measure derogating from a principle enshrined in European Union law, to show in each individual case that that condition is satisfied. The reasons which may be invoked by a Member State by way of justification must thus be accompanied by an analysis of the appropriateness and proportionality of the measure adopted by that State and by specific evidence substantiating its arguments (see Case C‑542/09 Commission v Netherlands [2012] ECR, paragraph 81 and case-law cited).
35. In that regard, the Court has previously accepted that the need to preserve the coherence of a tax system may justify a restriction on the exercise of the freedoms of movement guaranteed by the FEU Treaty but that that necessity requires the existence of a direct link between a tax advantage and a corresponding disadvantage (see, to that effect, Commission  v Denmark , paragraph 70, and Case C‑350/11 Argenta Spaarbank [2013] ECR, paragraphs 41 and 42).
36. In this case, there is admittedly a link between the tax reduction for which contributions paid to a savings pension are eligible and the taxation of the savings pension income. Under Article 39/2, 3°, of the CIR 1992, pensions, complementary pensions, annuities, capital sums, savings and surrender values are exempt if they are derived from a savings account or a savings insurance contract in respect of which the tax reduction provided for in Article 145/1, 5°, of that Code has not been granted (see, to that effect, Bachmann , paragraph 21, and Case C‑300/90 Commission  v Belgium , paragraph 14).
37. However, as the Court has stated in paragraph 71 of Commission  v Denmark , with regard to a scheme providing for a similar link between the deductibility of contributions to a pension and the taxation of the corresponding benefits, the factor liable adversely to affect the coherence of the Belgian rules at issue is to be found in the fact that the transfer of residence of the person liable to tax occurs between the time of payment of contributions to the savings pension and the receipt of savings pension income, and less in the fact that the financial institution managing the savings pension is located in another Member State.
38. Where a person liable to tax, having contracted for a savings pension with a financial institution established in Belgium, qualifies for a reduction of tax on the contributions to that savings pension, subsequently, before the time when payment of the savings pension income falls due, transfers his residence to another Member State, the Kingdom of Belgium loses the power to tax that income, at least where it has agreed, with the Member State to which residence of the person liable to tax is transferred, a double taxation agreement which provides that pensions and other comparable payments are taxable only in the Member State where the recipient of that income is resident (see, to that effect, Commission  v Denmark , paragraph 72).
39. Conversely, the fact that a savings pension is acquired from a financial institution established in a Member State other than the Kingdom of Belgium is not liable, as such, adversely to affect the coherence of the rules at issue. There is nothing to prevent the Kingdom of Belgium from exercising its power of taxation over the income derived from the savings pension paid by a financial institution established in another Member State to a person liable to tax who is still resident in Belgium when that income is paid, as a counterbalance to the payments of contributions in respect of which a tax reduction was granted (see, to that effect, Commission  v Denmark , paragraph 73).
42. In that regard, in accordance with settled case‑law, the need to guarantee the effectiveness of fiscal supervision may justify a restriction on the fundamental freedoms (Case C‑383/10 Commission  v Belgium , paragraph 51).
43. It must be recalled that Directive 77/799 may be invoked by a Member State in order to obtain from the competent authorities of another Member State all the information necessary to enable it correctly to assess the amount of the taxes covered by that directive (see Case C‑540/07 Commission  v Italy [2009] ECR I‑10983, paragraph 60).
44. Further, there is no reason why the Belgian tax authorities should not request from the person liable to tax the evidence that they consider they need to effect a correct assessment of the taxes concerned and, where appropriate, refuse the tax reduction applied for if that evidence is not supplied (see, to that effect, Case C‑451/05 ELISA [2007] ECR I‑8251, paragraph 95, and Case C‑383/10 Commission  v Belgium , paragraph 54).
46. Furthermore, the Kingdom of Belgium cannot validly claim that protection of the interests of savers, so that the pension to which they will be entitled will be paid to them, is related to the objective of ensuring the effectiveness of fiscal supervision, which is intended to combat tax evasion (see, by analogy, the judgment of 13 March 2008 in Case C‑248/06 Commission  v Spain , paragraph 34, and Case C‑318/10 SIAT [2012] ECR, paragraph 44), and not to protect persons liable to tax.
47. To the extent that it may be considered that such protection falls within the scope of the overriding reason in the public interest consisting in the protection of consumers, it is clear that the Kingdom of Belgium has not demonstrated that the provisions at issue do not go beyond what is necessary in order to ensure the attainment of the objective relied upon.
51. Since the provisions of the FEU Treaty relating to the freedom to provide services preclude the rules at issue, there is no need to examine them separately in the light of Article 63 TFEU concerning free movement of capital (see, to that effect, Commission  v Denmark , paragraph 76, and Case C‑383/10 Commission v Belgium , paragraph 74).