Keywords
Summary

Keywords

1. Freedom to provide services — Restrictions — Tax legislation — Income taxes — Exclusion of non-residents from the right to deduct business expenses — Not permissible — (EC Treaty, Art. 59 (now, after amendment, Art. 49 EC) and Art. 60 (now Art. 50 EC))

2. Freedom to provide services — Restrictions — Tax legislation — Income taxes — Rate of taxation fixed in relation to the income of non-residents and progressive in relation to the income of residents — Whether permissible — Conditions — (EC Treaty, Art. 59 (now, after amendment, Art. 49 EC) and Art. 60 (now Art. 50 EC))

Summary

1. Article 59 of the Treaty (now, after amendment, Article 49 EC) and Article 60 of the Treaty (now Article 50 EC) preclude a national provision which, as a general rule, takes into account gross income when taxing non-residents, without deducting business expenses, whereas residents are taxed on their net income, after deduction of those expenses.

see para. 55, operative part

2. Article 59 of the Treaty (now, after amendment, Article 49 EC) and Article 60 of the Treaty (now Article 50 EC) do not preclude a national provision which, as a general rule, subjects the income of non-residents to a definitive tax at the uniform rate of 25%, deducted at source, whilst the income of residents is taxed according to a progressive table including a tax-free allowance, provided that the rate of 25% is not higher than that which would actually be applied to the person concerned, in accordance with the progressive table, in respect of net income increased by an amount corresponding to the tax-free allowance.

see para. 55, operative part