Case C‑300/15

Charles Kohll

and

Sylvie Kohll-Schlesser

v

Directeur de l’administration des contributions directes

(Request for a preliminary ruling from the tribunal administratif (Luxembourg))

‛Reference for a preliminary ruling — Articles 21 TFEU and 45 TFEU — Freedom of movement and of residence of persons and workers — Income tax — Retirement pension — Pensioners’ tax credit — Conditions for granting — Possession of a tax deduction form issued by national authorities’

Summary — Judgment of the Court (Tenth Chamber), 26 May 2016

1. Freedom of movement for persons — Workers — Provisions of the Treaty — Scope ratione personae — Resident of a Member State residing in that Member State and in receipt of a retirement pension paid by a body liable for payment established in another Member State in consideration of past employment carried out in that Member State — Included

   (Art. 45 TFEU)

2. Citizenship of the Union — Provisions of the Treaty — Scope ratione personae — Resident of a Member State residing in that Member State and in receipt of a retirement pension paid by a body liable for payment established in another Member State in consideration of past employment carried out in that Member State — Included

   (Art. 21 TFEU)

3. Questions referred for a preliminary ruling — Jurisdiction of the Court — Identification of the relevant aspects of EU law

   (Art. 267 TFEU)

4. Freedom of movement for persons — Workers — Equal treatment — Income tax — National legislation restricting the eligibility for a tax credit to taxpayers in receipt of a retirement pension taxable in that Member State and in possession of a tax deduction form issued by national authorities — Not permissible — No justification

   (Art. 21 TFEU and 45 TFEU)

1.  A citizen and resident of a Member State can take advantage of Article 45 TFEU as regards a retirement pension paid in consideration of his past employment in a Member State which is neither that of which he is a national nor that where he resides at the time of the facts in the main proceedings, irrespective of whether, after having worked in that other Member State, he has settled in his Member State of origin in order to seek or take up employment there.

   (see para. 28)

2.  See the text of the decision.

   (see para. 32)

3.  See the text of the decision.

   (see para. 35)

4.  Articles 21 TFEU and 45 TFEU must be interpreted as precluding a national tax law which restricts the eligibility for the pensioners’ tax credit to taxpayers in possession of a tax deduction form, which is not issued where that pension, even if it is taxable in the taxpayer’s Member State of residence, is not subject to deduction of tax at source in that Member State by reason of the fact, inter alia, that the body liable to pay the pension is established in another Member State.

   More specifically, as regards Article 45 TFEU, by introducing a difference in treatment between taxpayers resident in the Member State concerned, depending on the Member State from which the retirement pensions, taxable in that Member State, which they receive originate, and by refusing the benefit of the tax credit to taxpayers for whom the body liable for payment of the pension is established in the territory of another Member State, the national legislation is likely to deter workers from seeking or undertaking employment in another Member State. As regards Article 21 TFEU, in so far as the tax advantage which the tax credit constitutes is refused to taxpayers who have exercised their freedom to move and to reside in a Member State other than that of which they are a national and who receive, due to their residence in that other Member State, a pension paid by a body liable for payment established in that Member State, that taxpayer finds himself at a disadvantage in comparison with taxpayers who have not exercised their freedom to move and to reside in another Member State.

   That difference in treatment cannot be explained by an objective difference in situation. The tax credit was introduced in order to pursue a selective tax policy in favour of persons belonging to more vulnerable sections of society, by enabling them to obtain, as a result of such a tax advantage, a higher level of disposable income. However, given that objective, a resident taxpayer who receives a retirement pension having its source in another Member State does not necessarily find himself in a different situation from that of a resident taxpayer receiving such a pension from a body liable for payment established in his Member State of residence, as both those taxpayers might belong to more vulnerable sections of society. Such a difference in treatment can be justified neither by administrative and practical considerations nor by the need to preserve the cohesion of the national tax system. First, what is being disputed is neither the system based on deduction at source nor the appropriate and practical nature of the issue of the tax deduction form, but rather the absolute refusal to grant a tax advantage where the taxpayer concerned is unable to produce such a document, even if he satisfies the other conditions required in order to be eligible for that advantage. It cannot be ruled out, a priori, that a tax payer is in a position to provide the relevant documentary evidence enabling the tax authorities of the Member State imposing the levy to ascertain, clearly and precisely, the nature and genuineness of the income arising from pensions in another Member State. Second, the tax advantage at issue is not offset by a particular levy.

   (see paras 38, 40, 41, 44, 47, 48, 50, 53-55, 61-63 and operative part)