Case C‑480/17

Frank Montag

v

Finanzamt Köln-Mitte

(Request for a preliminary ruling from the Finanzgericht Köln)

(Reference for a preliminary ruling — Freedom of establishment — Direct taxation — Income tax — Deductibility of contributions to an occupational pension scheme and to a private pension scheme — Exclusion of non-residents)

Summary — Judgment of the Court (Tenth Chamber), 6 December 2018

1. Freedom of establishment — Restrictions — Tax legislation or Fiscal legislation — Income tax — Deductibility of contributions to an occupational pension scheme and to a private pension scheme — Exclusion of non-resident taxable persons — Whether the situations of a resident taxable person and of a non-resident taxable person are comparable — Criteria — Possibility or not of taking into account personal and family circumstances — Expenses directly linked to the activity which generated the taxable income — Meaning — Expenses occasioned by the activity in question and necessary in order to carry it out — Included — Expenses resulting from the activity which generated the income but not necessary in order to carry it out –Precluded

   (Art. 49 TFEU)

2. Freedom of establishment — Restrictions — Tax legislation or Fiscal legislation — Income tax — Non-resident taxable person subject to income tax in the framework of limited tax liability in a Member State — National legislation of that Member State prohibiting the taxable person from deducting compulsory contributions paid into an occupational pension scheme — Direct link between the contributions and the activity which generated the taxable income — Impermissible in proportion to the amount of the share of the income taxable in the source Member State — National legislation of the Member State prohibiting the taxable person from deducting voluntary contributions paid into the occupational pension scheme — Lawfulness — Condition of future taxation of pensions paid by the provident institution — Irrelevant — National legislation of the Member State prohibiting the taxable person from deducting voluntary contributions paid into a private pension scheme — Lawfulness

   (Art. 49 TFEU)

1.  See the text of the decision.

   (see paras 29-33)

2.  Article 49 TFEU must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, under which a non-resident taxable person, subject, in that Member State, to income tax in the framework of limited tax liability, cannot deduct from the income tax basis of assessment the amount of compulsory contributions paid into an occupational pension scheme in due proportion to the share of the income taxable in that Member State if directly linked to the activity which generated that income, whereas a resident taxable person, subject to income tax in the framework of unlimited tax liability, can deduct such contributions from the income tax basis of assessment to the extent laid down by national law.

   Article 49 TFEU must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, under which a non-resident taxable person, subject, in that Member State, to income tax in the framework of limited tax liability, cannot deduct from the income tax basis of assessment the amount of additional contributions paid into an occupational pension scheme or the amount of contributions paid into a private pension scheme, whereas a resident taxable person, subject to income tax in the framework of unlimited tax liability, can deduct such contributions from the income tax basis of assessment to the extent laid down by national law.

   (see para. 62, operative part)