(2004/C 70 E/064)

WRITTEN QUESTION E-1755/03

by Caroline Jackson (PPE-DE) to the Commission

(27 May 2003)

Subject:   Taxation on European pension contributions

A British national, a consultant orthopaedic surgeon, has taken out a private pension through the Medical Council in Germany which presently offers a guaranteed minimum pension. He is, therefore, not contributing to a UK pension scheme.

He now finds that he is expected to pay tax to the British authorities on his German pension contributions.

Does this comply with EU law? What is the Commission's view of the possibility of creating a flexible pensions market within the EU if national authorities are allowed to act in this way?

Answer given by Mr Bolkestein on behalf of the Commission

(17 July 2003)

The conditions for tax deductibility of non-obligatory pension contributions are set by each Member State under its respective tax and pensions policy. While such matters fall within the competence of the Member States, they must nevertheless exercise that competence consistently with Community law. Thus the conditions for tax deductibility may not place restrictions on the free movement of persons or the free provision of services, in particular by discriminating on grounds of nationality.

The Commission has serious doubts about the compatibility with the EC Treaty of the United Kingdom rules as far as they limit tax deductibility of contributions to domestic occupational pension schemes. The Commission will take appropriate action following up its Communication on the elimination of tax obstacles to the cross-border provision of occupational pensions (1). Infringement proceedings have already been initiated in relation to other Member States (2). Moreover, the Commission has made contact with the surgeon in question to assess the details of his case.

(1)  OJ C 165, 8.6.2001.

(2)  See press release IP/03/179.