État du Grand Duchy of Luxemburg v Hans Ulrich Lakebrink and Katrin Peters-Lakebrink.
Date: 2007-07-18
14. It must be stated, first, that although direct taxation does not as such fall within the purview of the European Community, the powers retained by the Member States must nevertheless be exercised consistently with Community law (see, inter alia, Case C‑279/93 Schumacker  [1995] ECR I‑225, paragraph 21, and Case C‑290/04 FKP Scorpio Konzertproduktionen  [2006] ECR I‑9461, paragraph 30).
15. It should also be noted that any Community national who, irrespective of his place of residence and his nationality, works in a Member State other than that of residence falls within the scope of Article 39 EC (see Case C‑152/03 Ritter-Coulais  [2006] ECR I-1711, paragraph 31).
17. Finally, it is settled case‑law that all of the provisions of the EC Treaty relating to freedom of movement for persons have the purpose of facilitating the pursuit by Community nationals of occupational activities of all kinds throughout the Community and preclude measures which might place Community nationals at a disadvantage when they wish to pursue an economic activity in the territory of another Member State (Case C‑302/98 Sehrer  [2000] ECR I‑4585, paragraph 32, and Case C‑209/01 Schilling and Fleck-Schilling  [2003] ECR I‑13389, paragraph 24).
23. As the Advocate General observes at point 29 of his Opinion, the fact that, in a situation such as that in the main proceedings, the legislation at issue places non‑residents at a disadvantage cannot be compensated for by the fact that in other situations that same legislation does not discriminate between non‑residents and residents.
24. It is settled case‑law that unfavourable tax treatment contrary to a fundamental freedom cannot be justified by the existence of other tax advantages, even supposing that such advantages exist (see Case C‑385/00 de Groot  [2002] ECR I‑11819, paragraph 97 and the case‑law cited).
27. It is settled case‑law that discrimination can arise only through the application of different rules to comparable situations or the application of the same rule to different situations ( Schumacker , paragraph 30; Case C‑311/97 Royal Bank of Scotland  [1999] ECR I-2651, paragraph 26; and Case C‑383/05 Talotta  [2007] ECR I-0000, paragraph 18).
28. In relation to direct taxes, the situations of residents and non‑residents are, as a rule, not comparable ( Schumacker , paragraph 31).
30. According to well‑established case law, the position is different, however, where the non-resident receives no significant income in his State of residence and obtains the major part of his taxable income from an activity performed in the State of employment, with the result that the State of his residence is not in a position to grant him the advantages resulting from the taking into account of his personal and family circumstances (see, in particular, Schumacker , paragraph 36).
31. According to the same case‑law, discrimination arises from the fact that the personal and family circumstances of a non‑resident who receives the major part of his income and almost all his family income in a Member State other than that of his residence are taken into account neither in the State of residence nor in the State of employment ( Schumacker , paragraph 38).
34. Secondly, the ground, recalled at paragraph 31 of the present judgment, on the basis of which the Court made its finding of discrimination in Schumacker  concerns, as the Advocate General has pointed out at point 36 of his Opinion, all the tax advantages connected with the non‑resident’s ability to pay tax which are not taken into account either in the State of residence or in the State of employment (see also the Opinion of Advocate General Léger in Ritter-Coulais , points 97 to 99), since the ability to pay tax may indeed be regarded as forming part of the personal situation of the non‑resident within the meaning of the judgment in Schumacker .