Keywords
Summary

Keywords

Freedom of movement for persons – Workers – Equal treatment – Remuneration – Income tax

(Art. 39 EC)

Summary

Article 39 EC is to be interpreted as precluding national legislation which does not entitle a Community national who is not resident in the Member State in which he receives income that constitutes the major part of his taxable income to request, for the purposes of determination of the tax rate applicable to the income so received, that negative rental income relating to property situated in another Member State which he does not himself occupy be taken into account, whilst a resident of the first State can request that such negative rental income be taken into account.

In relation to direct taxes, the situations of residents and non‑residents are, as a rule, not comparable. Consequently, the fact that a Member State does not grant to a non‑resident taxpayer certain tax advantages which it grants to resident taxpayers is not, as a rule, discriminatory, since those two categories of taxpayer are not in a comparable situation.

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. Discrimination arises from the fact that those circumstances are taken into account neither in the State of residence nor in the State of employment.

The ground on which that finding of discrimination is based concerns 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, since the ability to pay tax forms part of the personal situation of the non‑resident.

(see paras 28-31, 34, 36, operative part)