This document is an excerpt from the EUR-Lex website
Document 62024CC0119
Opinion of Advocate General Emiliou delivered on 4 September 2025.###
Opinion of Advocate General Emiliou delivered on 4 September 2025.
Opinion of Advocate General Emiliou delivered on 4 September 2025.
ECLI identifier: ECLI:EU:C:2025:674
- Date of document:
- 04/09/2025
- Form:
- Sklepni predlogi
- Advocate General:
- Emiliou
Provisional text
OPINION OF ADVOCATE GENERAL
EMILIOU
delivered on 4 September 2025 (1)
Case C‑119/24 [Chefquet] (i)
DK,
JO
v
État belge
(Request for a preliminary ruling from the cour d’appel de Liège (Court of Appeal, Liège, Belgium))
( Reference for a preliminary ruling – Article 45 TFEU – Free movement of workers – Income tax – National legislation subjecting non-resident taxpayers to a national-level tax surcharge, established by analogy to municipal surcharges levied on resident taxpayers )
I. Introduction
1. ‘The hardest thing in the world to understand is income taxes’, (2) Albert Einstein is famously said to have observed – a remark as often cited as it is relatable, not least in cases such as the one at hand, where the calculation of the tax due varies not just by income, but also by postcode.
2. More specifically, the present request for a preliminary ruling from the cour d’appel de Liège (Court of Appeal, Liège, Belgium) concerns national legislation imposing, at the national level, a surcharge on the income tax of non-resident taxpayers only. That surcharge, however, was introduced with the stated aim of ensuring a proportionally equal tax burden between residents and non-residents, by mirroring the municipal surcharges on income tax that are levied, by agglomerations and municipalities, on resident taxpayers. While the national-level surcharge for non-residents is defined at a flat rate, municipal surcharges vary by agglomeration or municipality. The referring court seeks guidance on whether such legislation is compatible with the free movement of workers, enshrined in Article 45 TFEU.
3. Accordingly, this case presents an opportunity for the Court to clarify and further examine another situation in the intersection between direct taxation (a field where Member States retain competence) and the TFEU provisions on free movement (which must nonetheless be respected by the Member States in their exercise of that competence). (3)
II. Legal framework
4. Under the code des impôts sur les revenus 1992 (Income Tax Code 1992; ‘the CIR 92’), Belgian residents are subject to income tax with respect to their worldwide income, while non-residents are taxed only on income sourced in Belgium. In both cases, the applicable tax rates are, in principle, the same and are applied on the respective taxable income. (4)
5. Pursuant to Article 465 of the CIR 92, agglomerations and municipalities may levy a surcharge on the personal income tax of residents living within their territory (‘the municipal surcharge’).That surcharge is calculated in accordance with the method laid down in Article 466 of the CIR 92, as a percentage of the income tax due (before the application of tax credits, advance payments or other adjustments). The specific surcharge rate – that is, the percentage applied – is determined autonomously by each agglomeration or municipality (5) and may therefore vary between them.
6. Article 245 of the CIR 92, the provision at issue in the present case, provides that the income tax of non-residents shall be subject to a surcharge for the benefit of the State (‘the non-resident surcharge’), fixed at a flat rate, yet calculated, as municipal surcharges, in accordance with Article 466 of the same code.
7. The precise wording of Article 245 of the CIR 92, as well as the applicable rate of the non-resident surcharge, has varied over the period relevant to the dispute in the main proceedings.
8. In the version applicable to the tax years 1992 to 2003, that article provided: ‘The [non-resident income tax] shall be increased by [an additional 6%] for the benefit of the State, calculated in accordance with the rules set out in Article 466 [of the CIR 92].’
9. With effect from the 2005 tax year, that same article was supplemented by a second paragraph, providing that ‘the King may, by decree deliberated in the Conseil des Ministres [(Council of Ministers)], increase the [non-resident surcharge] up to a maximum of [7%]’. (6) Henceforth, the rate of the non-resident surcharge has been set at 7%. (7)
III. The dispute in the main proceedings and the question referred for a preliminary ruling
10. The present request for a preliminary ruling has arisen in the context of proceedings between, on the one hand, DK and JO, a married couple (together, ‘the appellants’), and, on the other hand, the État belge (Belgian State) concerning the determination of the appellants’ income tax contributions in respect of several tax years.
11. During the tax years at issue (specifically, 1992 to 1998, 2001 to 2003 and 2007 to 2009), the appellants had resided in France. (8) DK was principally employed in France, while additionally working, on a part-time basis, as a professor at several universities in Belgium. His spouse, JO, was in salaried employment in France until 2000, after which she no longer exercised any professional activity. Furthermore, during the same period, the appellants owned immovable property in Belgium.
12. In respect of their Belgian-sourced – earned and real estate – income, the appellants were taxed in Belgium as non-residents. In accordance with Article 245 of the CIR 92, the Belgian authorities applied the non-resident surcharge to their income tax.
13. The appellants contested their income tax contributions, including the application of the non-resident surcharge, for the relevant tax years. They lodged successive objections before the competent administrative authorities, all of which were rejected, either as inadmissible or as unfounded. (9)
14. The appellants subsequently instituted proceedings before the tribunal de première instance de Namur (Court of First Instance, Namur, Belgium), lodging four separate actions in which they challenged the income tax contributions at issue (10) – including the application of the non-resident surcharge – on multiple grounds. By judgment of 20 January 2016, that court joined those actions and dismissed the majority of the appellants’ pleas either as inadmissible or as unfounded. With respect to the remaining pleas, the court reserved judgment and referred two preliminary questions to the Cour constitutionnelle (Constitutional Court, Belgium; ‘the Belgian Constitutional Court’), regarding the compatibility of certain provisions of the CIR 92 with Articles 10 and 11 of the Belgian Constitution (which enshrine the principles of non-discrimination and equal treatment of Belgian citizens).
15. Of relevance to the subject-matter of the present request for a preliminary ruling is the first of those questions, which concerned Article 245 of the CIR 92 on the non-resident surcharge. In particular, the Belgian Constitutional Court was asked whether that provision gives rise to unjustified discrimination between non-residents and residents, in that it imposes on non-residents a surcharge analogous to the municipal surcharges levied on residents, even though the former do not benefit from the facilities and infrastructure of a Belgian municipality in the same way as the latter.
16. By judgment of 6 June 2019 (‘the Constitutional Court judgment’), (11) the Belgian Constitutional Court answered that question in the negative, holding that Article 245 of the CIR 92 does not infringe Articles 10 and 11 of the Belgian Constitution. The Constitutional Court pointed in particular to the objective of that provision, which, as specified in the relevant travaux préparatoires, is to avoid any discrimination between residents and non-residents. It moreover observed that, like residents, non-residents also benefit, in a general manner, from Belgian public facilities and services, which enable them to earn income from Belgian sources (on which the non-resident income tax is calculated). The Belgian Constitutional Court further stressed that the non-resident surcharge applies solely with respect to the income that non-residents have derived from Belgian sources (and not their worldwide income), and is thus intended to ensure that non-residents contribute only proportionally to the financing of tasks of general interest.
17. On 3 February 2020, the appellants brought an appeal against the first-instance judgment before the cour d’appel de Liège (Court of Appeal, Liège). In their appeal, the appellants questioned, inter alia, the compatibility of Article 245 of the CIR 92 with the freedom of movement of workers, enshrined in Article 45 TFEU, and requested that that court refer a relevant question to the Court of Justice for a preliminary ruling. Against this background, the cour d’appel de Liège (Court of Appeal, Liège) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:
‘Does Article 45 TFEU preclude the application of Article 245 of the Income Tax [Code], in so far as that article subjects non-resident taxpayers to a State tax supplement of 6 [to] 7%, as compared to that which they would pay if they were residents of the Kingdom [of Belgium], that supplement being imposed by analogy to the local tax imposed by Belgian agglomerations and municipalities on residents of the Kingdom [of Belgium] who have their principal residence in those agglomerations and municipalities?’
18. The appellants, the Belgian Government and the European Commission submitted written observations. No hearing was held.
IV. Analysis
19. By its question, the referring court seeks guidance on the compatibility of the non-resident surcharge, under Article 245 of the CIR 92, with Article 45 TFEU, which enshrines the freedom of movement of workers, considering that that surcharge applies only to non-residents and is levied at the national level at a flat rate, yet is imposed in lieu of the municipal surcharges imposed on residents by municipalities, at varying rates.
20. In framing the analysis on that question, I consider it necessary first to set out briefly the arguments put forward in the written observations before the Court (A). I shall subsequently turn to the assessment of the question referred, examining whether the national legislation at issue gives rise to unjustified discriminatory treatment (B).
A. Observations submitted to the Court
21. The appellants submit that Article 245 of the CIR 92 is incompatible with Article 45 TFEU, as it gives rise to unjustified discrimination between residents and non-residents, thus, constituting an obstacle to the free movement of workers.
22. In support of that position, they argue that the non-resident surcharge differs fundamentally from the municipal surcharge. Whereas the latter is determined and levied by municipal authorities and serves to finance local public services, with its rate varying by municipality, the former is set at a fixed flat rate and is imposed by and for the benefit of the State. On that basis, the appellants contend that the non-resident surcharge is a measure fully distinct from the municipal surcharge and that it is imposed on them solely by reason of their status as non-residents. They therefore appear to argue that, as taxpayers, they are in a situation comparable to that of residents and yet are treated differently, by being subjected to a national surcharge of 6 to 7% of their income tax to which they would not be subject were they residents of Belgium.
23. Somewhat ambiguously, however, they subsequently acknowledge that the non-resident surcharge corresponds to the municipal surcharge and from that perspective argue that they are treated in the same manner as residents, even though they are not in comparable situations, because, unlike residents, they do not benefit from services provided by municipal authorities to the same extent (for example, by sending their children to a municipal school).
24. Lastly, the appellants point out that they are also subject to local taxation in their State of residence (France) – in particular the ‘taxe d’habitation’ (residence tax). They claim that the non-resident surcharge essentially constitutes a second ‘taxe d’habitation’, albeit unrelated to any actual domicile, exposing them to double taxation. (12)
25. The Belgian Government, for its part, submits that Article 45 TFEU does not preclude the imposition of the non-resident surcharge. Echoing the Constitutional Court judgment, it argues that, to the extent that non-residents are subject to income tax in Belgium for their Belgian-sourced income, they are in a situation comparable to that of residents, as they likewise benefit from public services which create a context that enables them to acquire such income. In that regard, that Government considers that the question of whether those public services are provided at the regional or federal level is immaterial. Accordingly, the Belgian Government maintains that the non-resident surcharge is a measure equivalent to the municipal surcharges and hence not discriminatory. On the contrary, that measure is intended, as per its legislative objective, to ensure that non-residents are treated equally and, in fact, not more favourably than residents, thereby avoiding reverse discrimination – an objective that can legitimately be pursued by the Member States.
26. The Commission posits that Article 245 of the CIR 92 does not amount to discrimination and does not constitute an impediment to the free movement of workers. In its view, residents and non-residents are not in a comparable situation, since non-residents, lacking a local residence, cannot be subject to municipal surcharges. At the same time, it also considers that the non-resident surcharge is a measure distinct from the municipal surcharge, grounded on a different legal basis and intended to finance services at a different level (the national level). Nonetheless, the Commission stresses that both surcharges share the same logic and have similar objectives. It moreover notes that the rate of the non-resident surcharge appears to approximate the average of the municipal surcharge rates across Belgian municipalities. The Commission suggests that the choice of such an average rate (if confirmed) does not constitute discrimination but falls within the acceptable limits of Member States’ discretion in the field of direct taxation. Lastly, the Commission highlights that the non-resident surcharge serves to ensure equal treatment of residents and non-residents, in circumstances where identical taxation is not pragmatically feasible.
B. Assessment of the question referred
27. I recall that, by its question, the referring court asks whether Article 245 of the CIR 92, which establishes a flat-rate national-level surcharge on the income tax of non-residents, by analogy to the varying-rate municipal surcharges borne by residents of Belgium, is compatible with the free movement of workers enshrined in Article 45 TFEU. (13) Essentially, the referring court seeks to clarify whether the non-resident surcharge gives rise to discrimination in breach of Article 45 TFEU.
28. In that regard, it must, at first, be recalled that Article 45 TFEU provides that the freedom of movement of workers entails the abolition of all discrimination based on nationality between workers of the Member States, particularly as regards remuneration. As the Court has observed, this means that Article 45 TFEU also precludes discriminatory national provisions on income tax, since the principle of equal treatment with regard to remuneration would otherwise be rendered ineffective. (14)
29. Furthermore, the Court has consistently held that the principle of equal treatment laid down in Article 45 TFEU prohibits not only direct discrimination on the ground of nationality but also all indirect forms of discrimination which, by the application of other criteria of differentiation, such as residence, lead in fact to the same result. (15) Accordingly, it is settled case-law that Article 45 TFEU precludes measures which, even if they apply regardless of nationality, are intrinsically liable to adversely affect migrant workers more than national workers and there is a consequent risk that they will place the former at a particular disadvantage. (16) Finally, it is also well-established that discrimination can arise only where comparable situations are treated differently or different situations are treated in the same way. (17)
30. In the light of the foregoing, to respond to the question of the referring court regarding the compatibility of Article 245 of the CIR 92 with Article 45 TFEU, what must be assessed is whether that national provision, albeit applicable regardless of nationality, gives rise to discrimination between non-residents and residents of Belgium.
31. It is therefore necessary to examine whether, in the circumstances at issue, residents and non-residents are in a comparable situation (1) and whether they are treated in a different manner (2), with an appropriate justification (3).
1. Are residents and non-residents in a comparable situation in the circumstances at issue?
32. As far as direct taxation is concerned, the Court has held, in cases relating to the taxation of income of natural persons, that the situations of residents and non-residents in a given State are not generally comparable. That is because the income received in the territory of a Member State by a non-resident is in most cases only a part of that person’s total income, which is concentrated in his or her place of residence. Furthermore, given that a non-resident’s personal ability to pay tax is determined by reference to his or her aggregate income and personal and family circumstances, it is easier to assess it in the place where his or her personal and financial interests are centred, which in general is the place of habitual residence. (18)
33. Nonetheless, it also follows from the Court’s case-law that that circumstance is not such as to preclude a finding that the two categories of taxpayers are in a comparable situation, where there is no objective difference between them with regard to the purpose and content of the national provisions in question. (19)
34. In the present case, as already pointed out above, non-residents are taxed in Belgium only on their Belgian-sourced income, as opposed to residents who are taxed on their worldwide income. However, the surcharges at issue are not determined by reference to the taxpayer’s personal ability to pay tax and are not linked to his or her personal and family circumstances.
35. On the contrary, as to the content of the measure at issue, it must be observed that the non-resident surcharge, like the municipal surcharge, merely constitutes an augmentation of the income tax liability, which therefore serves the immediate purpose of augmenting tax revenue to be used for financing public services. Effectively, both surcharges can be understood as an increased income tax rate, (20) applied on the respective taxable bases of residents and non-residents.
36. In that regard, it must be recalled that the Court has held, on several occasions, that, as regards the income tax rate to be applied on the taxpayers’ respective taxable base, there is no objective difference between the situation of resident and non-resident taxpayers and that, all other things being equal, those two categories must be regarded as being in a comparable situation in that respect. (21)
37. Indeed, that conclusion is confirmed in the circumstances of the present case: in so far as both residents and non-residents generate taxable income in Belgium and are thereby proportionally liable to contribute to the financing of public services through income taxation, there is no objective difference between them that would justify taxing their respective taxable incomes in Belgium at a different effective rate – be it with regard to the ‘main’ tax rate (which is also identical for both groups (22)) or the surcharge applied thereto. In other words, no objective distinction exists between the two groups vis-à-vis the tax burden to be imposed on the portion of their income subject to taxation in Belgium.
38. This conclusion is not affected by the fact that the non-resident surcharge is levied and utilised at the national level and the municipal surcharge at the municipal level.
39. First, this distinction merely reflects the decentralised structure of Belgium’s fiscal system, where competence to levy and use certain taxes has been granted to authorities at local level. (23) In terms of effect, there is no material difference from the scenario of a central authority imposing on all taxpayers a single surcharge and subsequently allocating the revenue to various public tasks, including those undertaken at local level.
40. Secondly, it should be emphasised that the fundamental purpose of income tax, and correspondingly of a surcharge thereto, irrespective of the level at which it is levied, remains – as is in general the purpose of all taxes – the financing of public services, at whatever level these may be provided. (24) The appellants, and it seems also to a certain extent the Commission, appear to consider that because the municipal surcharge serves to fund services offered at the municipal level, and because non-residents do not benefit from such services to the same extent as residents, the two groups are not in a comparable situation that would justify the application on non-residents of an income tax surcharge by analogy to municipal surcharges.
41. However, such reasoning appears to me to confuse taxes with fees (or charges) for specific services. (25) Contrary to such fees, taxes are not earmarked for a specified service, their amount is not meant to reflect the actual cost of a benefit enjoyed by the person concerned and they are not paid in consideration for a particular service rendered. (26) Accordingly, a taxpayer’s liability to contribute to the financing of public services does not depend on his or her personal use of a given public service. Consequently, the argument that links the municipal surcharge to specific services offered by municipalities and leads to the conclusion that residents and non-residents are not in a comparable situation because the latter do not benefit from those particular services is, in my view, misplaced.
42. To conclude, I am of the opinion that, with regard to tax legislation, such as that at issue, which essentially increases income tax liability, the situation of non-residents (to the extent that they are subject to income tax in Belgium) must be regarded as comparable to that of resident taxpayers.
2. Is there a difference in treatment?
43. In view of the foregoing, what must be ascertained next is whether resident and non-resident taxpayers are treated in a similar or a different manner. In my view, there are two aspects that need to be examined in that regard: first, the imposition of the non-resident surcharge per se, in lieu of the municipal surcharge, (a) and second, the rate of that surcharge (b).
(a) The imposition of the surcharge per se
44. It is apparent from its travaux préparatoires (27) that Article 245 of the CIR 92 introduced a surcharge on the income tax of non-residents in lieu of the surcharge on the income tax of residents, levied by municipalities by virtue of Article 465 of the same code.
45. While these surcharges differ in their legal basis and the level of government by which they are levied and used, they are both calculated by reference to Article 466 of the CIR 92, using the same method and applied on the same base (namely, on the amount of income tax payable). Moreover, for the reasons already set out in points 35 to 41 above, their function and purpose is the same: to increase the tax liability of taxpayers, thereby increasing public funds to be used for public benefit. Thus, even though the legislative frameworks governing the two surcharges are not identical, the surcharges themselves are, in essence, equivalent (something which the appellants themselves appear to acknowledge). (28) It follows that with respect to the existence of a surcharge per se, there is no difference in treatment between residents and non-residents.
46. This conclusion is not called into question by the appellants’ argument that they were exposed to double taxation, on the ground that they were, in their view, essentially subject to municipal taxes in Belgium, as well as in France where they paid the ‘taxe d’habitation’. In that regard, I note that the ‘taxe d’habitation’, as applicable at the material time, was a tax levied on individuals having exclusive use or disposal of residential premises in France and was calculated on the basis of the property’s rental value. As such, it differs fundamentally in nature and object from income taxation. For that reason, the Court has already held that the ‘taxe d’habitation’ cannot be regarded as equivalent to income tax, (29) nor accordingly, I would add, to an income tax surcharge – as was also held in the Constitutional Court judgment. Therefore, it cannot be considered that the appellants have been subject to double taxation in this respect. I would also add, ex abundanti cautela, that even if it were to be accepted that a form of double taxation occurred (quod non), pursuant to the case-law of the Court, in the absence of harmonisation at EU level, the disadvantages – such as double taxation – resulting from the parallel exercise of tax competences by different Member States, to the extent that such an exercise is not discriminatory, do not constitute restrictions on the freedom of movement. (30)
47. In the light of the foregoing, I am of the view that the imposition on non-residents of an income tax surcharge that mirrors the municipal surcharge imposed on residents does not, in itself, constitute differential treatment between those two groups and is thus not incompatible with Article 45 TFEU.
48. In my view, the analysis could end at this point, if the rates of the non-resident and municipal surcharges were the same. (31) However, as indicated above, the applicable rates diverge, which raises the question of whether the difference in the actual rate of the surcharge results in discriminatory treatment. I shall therefore consider this aspect below.
(b) The rate of the surcharge
49. Pursuant to Article 245 of the CIR 92, the non-resident surcharge is fixed at a flat rate, which, as noted above, has ranged from 6 to 7% during the tax years at issue. The order for reference mentions that the municipal surcharges are set by the municipalities, thus implying that their rates vary by municipality, but does not provide the actual rates of those surcharges during the tax years at issue in the main proceedings.
50. The Commission has nevertheless pointed to publicly available information, (32) according to which the rates of the municipal surcharges varied, during the material time, from 0% for certain municipalities to 9.5% for others. Based on the same data, the average municipal surcharge rate across municipalities ranged, over the years at issue, between, approximately, 6.8% and 7.4%. These figures show that the 6 to 7% rate applied to the non-resident surcharge for the same period corresponded to, or was slightly below, the average municipal surcharge rate for each of the years at issue. The above remains, of course, subject to verification by the referring court. The analysis that follows is based on the premiss that it can be considered reliable, not least because it has also been mentioned in several instances in the case file. (33)
51. In view of the foregoing, what needs to be assessed is whether applying a flat rate to non-residents, which – in practice and, it is understood, also by design (34) – corresponds to (slightly below) the average of the varying municipal surcharge rates, can still be considered treatment equivalent to that of residents.
52. It is clear, in the circumstances of the case, that non-residents could be regarded as having been treated completely equally, in terms of the applicable surcharge rate, during the tax years in question, only to the residents of those municipalities who had levied a municipal surcharge at exactly the same rate as that of the non-resident surcharge. In all other cases, non-residents were subject to either a lower or a higher surcharge than residents, depending on the specific rate applied by each municipality. Accordingly, in those instances, non-residents were treated more favourably compared to residents of certain municipalities and less favourably compared to residents of other municipalities.
53. I must observe that, in practice, the use of a rate for the non-resident surcharge corresponding to a slightly-below-average municipal rate has meant that non-residents were, during the tax years at issue, subject to a surcharge – and accordingly an income tax liability – equal to or lower than that borne by the majority of taxpayers resident in Belgium. (35) As a result, non-residents have therefore been treated in most cases more favourably or at least equally in comparison to residents. This, however, does not alter the fact that the non-resident surcharge rate exceeded the surcharge rate applied to residents in certain municipalities. Compared to those residents, non-residents were therefore treated less favourably, as they were subject to an effectively higher income tax rate. Besides, it must be observed that regardless of the specific applicable rates, which are subject to verification by the referring court, the imposition of a flat-rate surcharge on non-residents compared to municipal surcharges of varying rates, as a rule, leaves room for different treatment between non-residents and at least certain residents.
54. In this respect, it must be recalled that pursuant to the case-law of the Court, even if a measure is favourable to non-residents more often than not, that does not prevent it from leading, where it proves disadvantageous for those non-residents, to an inequality of treatment in relation to resident taxpayers. Similarly, the Court has previously held that the fact that in one situation the applicable national rules place non-residents at a disadvantage cannot be compensated for by the fact that, in other situations, that same legislation does not discriminate between non-residents and residents. (36) Finally, the Court has also held that national legislation which allows for regional variations in tax treatment is incompatible with the provisions of the TFEU on free movement, where it results in non-residents being treated less favourably than residents in certain regions (even if residents in other regions do not benefit from favourable treatment either). (37)
55. Article 245 of the CIR 92 results, therefore, in unequal tax treatment in so far as it permits (subject to verification by the referring court) the imposition of a higher tax rate on the taxable income of non-residents and, therefore, a tax liability proportionally greater for non-residents than that borne by – at least certain – residents. (38) Such a difference in treatment – which is liable to operate mainly to the detriment of nationals of other Member States, as non-residents are in the majority of cases foreign nationals – constitutes indirect discrimination on the ground of nationality. (39)
56. I therefore cannot agree with the Commission’s suggestion that the application of an ‘average’ rate does not constitute discrimination. In particular, the Commission appears to argue that ‘approximate legislation’ is not in itself discriminatory, by relying on the judgment in Sopora, (40) where the Court found that legislation involving approximate limits was not, in principle, in breach of Article 45 TFEU.
57. The judgment in Sopora concerned a tax advantage whereby reimbursements granted to incoming workers for expenses incurred due to working outside their country of origin could be exempted from their taxable income. In that case, national legislation had established what was essentially a presumption of eligibility for that advantage, based on necessarily approximate thresholds (regarding distance of country of origin from the Netherlands and amount of expenses). Nevertheless, even workers who did not satisfy those thresholds could obtain the same advantage by providing evidence of actual expenses incurred. The reasoning of that judgment cannot, therefore, be transposed to the present case, where the application of an ‘approximate’ average rate is in no way a rebuttable presumption but leads to a concrete and inevitable difference in treatment.
58. It therefore only remains to be assessed whether that difference in treatment may be justified, such that it may nevertheless be compatible with Article 45 TFEU.
(c) A parallel in the EFTA Court’s case-law
59. Before proceeding to that assessment, however, it is worth noting that the above position is in line with the reasoning adopted by the European Free Trade Association (EFTA) Court in a case bearing a strong resemblance to the present one. (41) In particular, in Case E‑11/22, that court was faced with the question of the compatibility with the free movement of workers of Liechtenstein legislation that subjected non-residents to a flat-rate national-level surcharge on their earned income, in lieu of municipal surcharges levied on residents by municipalities at varying rates. The EFTA Court held that, in terms of the rules governing their income tax (and surcharges thereto), resident and non-resident taxpayers were in a comparable situation, irrespective of whether that tax was levied at the municipal or national level. (42) It went on to find that a difference in treatment of those comparable situations existed, which consisted in the disadvantageous rate of the surcharge applied to non-residents (and not in the existence of the surcharge as such). (43) In that case, the surcharge rate applied to non-residents exceeded even the highest municipal surcharge actually levied on residents, leading the EFTA Court to conclude that indirect discrimination clearly existed.
60. The present case only differs, therefore, in that the rate applied to non-residents is not wholly unfavourable vis-à-vis all residents, but rather – subject to verification by the referring court – corresponds to the average rate of municipal surcharges borne by residents. In my view, this aspect could prove relevant in the assessment of whether the measure at issue may be justified.
3. Is the discrimination justified?
61. According to the Court’s case-law, a measure giving rise to indirect discrimination, in casu Article 245 of the CIR 92, may nonetheless be justified if it pursues a legitimate objective and is proportionate thereto. (44)
62. Regarding the objective pursued, as put forward by the Belgian Government, Article 245 of the CIR 92 aims at preventing reverse discrimination, that is, to ensure that resident taxpayers are not placed at a disadvantage compared to non-residents. While EU law does not prohibit reverse discrimination, the prevention of such discrimination can, in my view, be regarded as a legitimate objective that Member States may choose to pursue and that can serve, in principle, to justify a measure restricting the free movement of workers. (45)
63. As regards the proportionality of the measure at issue in the light of a legitimate objective, pursuant to the Court’s case-law, what must be considered is whether the measure (i) is suitable for attaining that objective; (ii) does not go beyond what is necessary to that end; and (iii) is proportionate stricto sensu, striking a fair balance between the interests at stake. (46)
64. While the Court may provide guidance to assist the referring court, it is ultimately for the national court to determine whether a national measure complies with the principle of proportionality, having regard to the circumstances of the main proceedings and all the relevant elements of national law and fact. (47) In the present case, in the absence of comprehensive verified information regarding the relevant national context (including, notably, the applicable municipal surcharge rates) or of an explanation by the Belgian Government as to the choice of the measure at issue, I must limit myself to offering certain general considerations regarding each of the three elements of proportionality.
65. In that regard, it must be borne in mind, at the outset, that the assessment of the proportionality of Article 245 of the CIR 92 concerns not the non-resident surcharge per se (which, as previously explained, does not in itself entail unequal treatment), but solely the application of a flat rate for that surcharge (appearing to correspond to the average of municipal surcharge rates), which leads to different treatment between non-residents and – at least some – residents.
66. Concerning, first, the element of suitability, as pointed out above, the use of a flat rate for the non-resident surcharge may, in certain cases, result in the less-favourable treatment of residents compared to non-residents, where the municipal surcharge rates applicable to the former exceed the flat rate applicable to the latter. Consequently, the non-resident surcharge rate does not serve fully to attain the objective of avoiding reverse discrimination. However, employing a rate that roughly corresponds to the average of municipal surcharge rates may serve as a reasonable and workable way to prevent systematic under-taxation of non-residents compared to residents. From that perspective, the measure can still be regarded as broadly suitable for achieving the stated objective.
67. Turning to the element of necessity, it must be examined whether less-restrictive measures could achieve the objective pursued with equal effectiveness. In my view, several such alternatives could be contemplated; for example, applying a uniform surcharge rate to all taxpayers or deciding the rate of the surcharge depending on the rate charged in the municipality where the income was sourced. Both of those options would guarantee equal treatment between residents and non-residents, thus at the same time ensuring compliance with Article 45 TFEU and preventing reverse discrimination. Nonetheless, it remains unclear whether the challenges and complexities that those options could present in terms of coordination and implementation (48) render them in fact overly complex and unworkable, given the fact that there are more than 580 municipalities in Belgium. (49)
68. By contrast, it cannot be denied that the use of a flat rate, to the extent that it indeed corresponds to the average applicable municipal surcharge rate, constitutes a far simpler and, as the Commission has suggested, pragmatically feasible approach. (50) In that regard, it must be recalled that while it is true that considerations of an administrative nature cannot justify a derogation from EU law, it has also been accepted by the Court that Member States cannot be denied the possibility of attaining legitimate objectives through the introduction of rules which are easily managed and supervised by the competent authorities. (51) In that sense, the use of a flat average rate could be regarded as realistically necessary.
69. While I still have certain reservations concerning the availability of less-restrictive alternatives, if the use of a flat average rate were to be accepted, in the circumstances at issue, as not only broadly suitable but also realistically necessary, the analysis must then turn to proportionality stricto sensu. This entails weighing the advantages of employing such a rate, in relation to the objective pursued, against the disadvantages it creates for non-residents, with respect to their free movement rights. In that regard, the key question seems to me to be whether the difference in treatment resulting from the use of the flat average rate – specifically, the additional burden placed on non-residents compared to some residents – is in fact marginal, while the measure serves to ensure the legitimate objective of preventing reverse discrimination, in the most workable manner within a complex fiscal framework. In the light of the above and on the basis of the information available, the choice of the flat average rate appears to me to represent a balanced compromise between the interests at stake.
70. Consequently, in my view, provided the additional burden on non-residents remains strictly limited and no equally effective less-restrictive alternative is feasible, the application of the flat average rate for the non-resident surcharge could be considered proportionate. This is, of course, without prejudice to any other considerations – or even additional justifications – that the referring court may take into account in its concrete assessment of the proportionality of Article 245 of the CIR 92.
V. Conclusion
71. In the light of all of the foregoing, I propose that the Court of Justice answer the referring court’s question to the effect that Article 45 TFEU does not preclude national legislation, such as that at issue in the main proceedings, which imposes on non-residents an income tax surcharge in lieu of the municipal surcharges borne by residents, provided that the rates applicable to that surcharge do not exceed the rates applied to residents in any given region, without an objective justification and subject to the principle of proportionality.
1 Original language: English.
i The name of the present case is a fictitious name. It does not correspond to the real name of any party to the proceedings.
2 Mattersdorf, L., ‘Einstein on taxes’ (letter to the editor by Einstein’s tax advisor), Time Magazine, 22 February 1963.
3 Judgment of 22 March 2007, Talotta (C‑383/05, EU:C:2007:181, paragraph 16 and the case-law cited).
4 See, notably, Articles 5, 130, 228 and 243 of the CIR 92.
5 For the sake of brevity, the term ‘municipality’ will be used in the present Opinion to refer to both agglomerations and municipalities.
6 Pursuant to Article 398 of the Loi-programme du 24 décembre 2002 (Programme-Law of 24 December 2002) (Moniteur belge of 31 December 2002, p. 58686).
7 In accordance with Article 80 of the arrêté royal du 27 août 1993 d’exécution du Code des impôts sur les revenus 1992 (Royal Decree of 27 August 1993 implementing [the CIR 92]) (Moniteur belge of 13 September 1993, p. 20096), as amended by royal decree of 4 December 2003 (Moniteur belge of 17 December 2003, p. 59397).
8 The order for reference does not specify the nationality of the appellants, yet it is understood that they are EU nationals. It may also be inferred from the case file, albeit with certain reservations, that they are of Belgian nationality.
9 With the exception of certain objections concerning the tax years 1993 and 2008, which were partially upheld, on grounds unrelated to the present request for a preliminary ruling.
10 According to the order for reference, the contested tax contributions concern only DK for the tax years 1993 to 1998, but both appellants for the remaining tax years.
11 Arrêt No 92/2019 de la Cour constitutionnelle du 6 juin 2019 [judgment No 92/2019 of the Belgian Constitutional Court, dated 6 June 2019].
12 For completeness, I note that the appellants have also suggested in their written observations that the order for reference does not satisfy the requirements regarding the content of requests for a preliminary ruling, as laid down in Article 94 of the Rules of Procedure of the Court of Justice and in the Recommendations to national courts and tribunals in relation to the initiation of preliminary ruling proceedings (OJ 2019 C 380, p. 1). The appellants do not for that reason claim the inadmissibility of the request for a preliminary ruling – which, it is recalled, they themselves sought – but appear to raise the point merely to explain why they found it necessary to clarify the legal and factual background. In that regard, in my view, it suffices to note that the order for reference has sufficiently presented the relevant factual background, as well as the tenor of the relevant national provisions, in order to enable the Court to comprehend and provide a useful answer to the question referred, in line with Article 94 of the Rules of Procedure, such that, in my view, no issue of inadmissibility of the order for reference exists.
13 I note that the applicability of Article 45 TFEU in the present case is not called into question either by the referring court or by the Belgian Government or the Commission. Indeed, based on the presumption that the appellants are of Belgian nationality (see footnote 8 above) residing in France, it follows that they can in principle rely on the free-movement provisions of the TFEU.
However, I note the following: DK has worked, during the tax years at issue, in parallel, in both France and Belgium, whilst residing in France, and thus falls within the scope of Article 45 TFEU (and thisirrespective of his nationality) ( see for example, judgments of 27 June 1996, Asscher (C‑107/94, ‘the judgment in Asscher’, EU:C:1996:251, paragraph 33), and of 12 December 2002, de Groot (C‑385/00, EU:C:2002:750, paragraphs 76 to 79 and the case-law cited)).
On the other hand, according to the order for reference, JO only worked until 2000 and hence, cannot, in principle, rely on the freedom of movement of workers after that date. In any event, since she has only worked in France, it is understood that she has no professional income which is taxable in Belgium, but is taxed there solely in respect of her real-estate income. This would mean that the relevant freedom in her case would be that of movement of capital, under Article 63 TFEU. Nevertheless, it is submitted that the present analysis regarding discriminatory treatment between residents and non-residents, through the lens of the free movement of workers, would, mutatis mutandis, also remain relevant under the free movement of capital (see, in this regard, judgment of 11 October 2007, Hollmann (C‑443/06, ‘the judgment in Hollmann’, EU:C:2007:600)).
14 Judgment of 24 February 2015, Sopora (C‑512/13, ‘the judgment in Sopora’, EU:C:2015:108, paragraph 22 and the case-law cited).
15 See judgments of 14 February 1995, Schumacker (C‑279/93, ‘the judgment in Schumacker’, EU:C:1995:31, paragraph 26), and of 15 June 2023, Ministero dell’Istruzione, dell’Università e della Ricerca (Special lists) (C‑132/22, EU:C:2023:489, paragraph 28 and the case-law cited).
16 Judgment of 22 June 2017, Bechtel (C‑20/16, EU:C:2017:488, paragraph 39 and the case-law cited).
17 See the judgment in Schumacker, paragraph 30, and judgment of 28 June 2012, Erny (C‑172/11, ‘the judgment in Erny’, EU:C:2012:399, paragraph 40 and the case-law cited).
18 See the judgment in Asscher, paragraph 41, and judgment of 12 June 2003, Gerritse (C‑234/01, ‘the judgment in Gerritse’, EU:C:2003:340, paragraph 43).
19 See, for example, judgments of 29 April 1999, Royal Bank of Scotland (C‑311/97, ‘the judgment in RBS’, EU:C:1999:216, paragraph 29); of 10 May 2012, Commission v Estonia (C‑39/10, EU:C:2012:282, paragraph 51); and of 9 February 2017, X (C‑283/15, EU:C:2017:102, paragraphs 30 to 32 and the case-law cited).
20 Technically, the surcharge does not modify the nominal tax rate itself. Rather, it is calculated as a percentage of the tax due (after applying the relevant rate) and added on top of that tax. Its effect, however, is functionally equivalent to a higher overall rate of tax.
21 See, for example, the judgment in Asscher, paragraph 48; the judgment in RBS, paragraph 30; the judgment in Gerritse, paragraph 53; the judgment in Hollmann paragraph 53; and judgment of 6 October 2009, Commission v Spain (C‑562/07, ‘the judgment in C‑562/07’, EU:C:2009:614, paragraph 48 et seq. and the case-law cited).
22 See point 4 above.
23 In that regard, see, for example, Traversa, E., ‘Is there still room left in EU law for tax autonomy of Member States’ regional and local authorities?’, EC Tax Review, Vol. 20, Issue 1, 2011, pp. 4 to 15, who also argues that the allocation for the same tax of the power to regulate the liability of residents and non-residents to different authorities would almost inevitably cause infringements of the freedom of movement in the absence of strict coordination; see also Bourgeois, M., ‘Le cadre institutionnel de l’impôt des non‑résidents après la sixième réforme de l’État: observations préalables à l’étude de Hannelore Niesten’, Revue de Fiscalité Régionale et Locale, No 1, 2018, pp. 21 to 26.
24 See, for example, Barassi, M., ‘The notion of tax and the different types of taxes – comparative approach’, and Bourgeois, M., ‘Constitutional framework of the different types of income’, in Peeters, B., The Concept of Tax, EATLP, 2005, pp. 59 to 73 and 99 to 183.
25 Ibid; see also de Jonckheere, M., Schep, A. and Monsma, A., ‘Open versus closed competence to tax: A comparative legal study of municipal taxes in Belgium and the Netherlands’, Intertax, Vol. 47, Issue 5, 2019, pp. 468 to 489, and Spitzer, H.D., ‘Taxes vs. fees: A curious confusion’, Gonzaga Law Review, Vol. 38, No 2, 2002 to 2003, pp. 335 to 365.
26 Rather, in the words of Justice Oliver Wendell Holmes Jr., ‘taxes are what we pay for civilised society’.
27 Doc. parl., Chambre, 1977-1978, n° 113/1, p. 1 and Doc. parl., Chambre, 2002-2003, DOC 50-2124/001 and DOC 50-2125/001, p. 194, cited in the Constitutional Court judgment.
28 See point 23 of the present Opinion.
29 See judgment of 21 May 2015, Pazdziej (C‑349/14, EU:C:2015:338, paragraphs 21 to 24).
30 Judgment of 26 May 2016, NN (L) International (C‑48/15, EU:C:2016:356, paragraph 47 and the case-law cited).
31 I note that the analysis of the Constitutional Court judgment was precisely limited to the point of the existence of the surcharge itself, and did not enter into the specifics of the differing rates.
32 See the overview of the rate of the municipal surcharge, by municipality and by tax year, as provided by the Service Public Fédéral Finances (Federal Public Service Finance, Belgium), available at: https://finances.belgium.be/sites/default/files/Statistieken_SD/open-data/Taux_IPP_Com.xlsx.
33 See, for example, point A.2.1 of the Constitutional Court judgment, presenting the position of the appellants before the tribunal de première instance de Namur (Court of First Instance, Namur).
34 See travaux préparatoires, cited in the Constitutional Court judgment (Doc. parl., Chambre, 2002-2003, DOC 50-2124/001 and DOC 50-2125/001, p. 194), according to which the possibility to set the non-resident surcharge rate by royal decree was introduced (as of the 2005 tax year) to allow for closer alignment with the reality of – often higher – municipal surcharge rates.
35 This is particularly because, as indicated in point 50 of the present Opinion, the average rates referred to above reflect the mean municipal surcharge rates (namely the average across municipalities) and not a weighted average which takes into account the municipalities’ population. Consequently, it seems that a small number of municipalities with zero-rate surcharges, yet small populations, have significantly reduced those average rates.
36 Judgment of 2 June 2016, Pensioenfonds Metaal en Techniek (C‑252/14, EU:C:2016:402, paragraph 38).
37 Judgment of 3 September 2014, Commission v Spain (C‑127/12, EU:C:2014:2130, paragraph 66).
38 See also the judgment in Asscher, paragraph 49; the judgment in RBS, paragraph 30; the judgment in Hollmann, paragraph 54; and the judgment in C‑562/07, paragraph 43.
39 Judgment of 16 May 2024, Hocinx (C‑27/23, EU:C:2024:404, paragraph 35).
40 Cited in footnote 14 above.
41 Judgment of the EFTA Court of 4 July 2023 in Case E‑11/22, RS v Steuerverwaltung des Fürstentums Liechtenstein.
42 It should be noted that the EFTA Court, as a first point, found the situation of residents to be comparable with that of non-residents earning almost all of their worldwide income in Liechtenstein, as was the case of the applicant concerned. However, that court subsequently stressed, by reference to the judgment in Asscher, that with regard to the determination of the applicable tax rate the status of residence or non-residence is in any event irrelevant.
43 It is worth noting that Liechtenstein amended the contested legislation (already triggered by an earlier judgment of its constitutional court), maintaining the non-resident surcharge but providing that the rate of the surcharge is to be laid down each year in the Finance Act. As the EFTA Court pointed out, this permits the Liechtenstein Parliament to set the surcharge by reference to the lowest municipal surcharge applicable at the time.
44 Judgment in Erny, paragraph 41 and the case-law cited; see also judgment of 10 July 2025, Städteregion Aachen (C‑257/24, EU:C:2025:567, paragraph 46).
45 Cf. judgment of 30 November 2023, Ministero dell’Istruzione and INPS (C‑270/22, EU:C:2023:933, paragraph 73).
46 Judgment of 5 December 2023, Nordic Info (C‑128/22, EU:C:2023:951, paragraph 77 and the case-law cited).
47 Judgment of 13 February 2025, Lexitor (C‑472/23, EU:C:2025:89, paragraph 50).
48 See CFE ECJ Task Force, ‘Opinion Statement ECJ‑TF 4/2023 on the Decision of the EFTA Court of 4 July 2023 in Case E‑11/22, RS’; See also Traversa, E., footnote 23, op. cit., p. 14.
49 See https://circabc.europa.eu/webdav/CircaBC/ESTAT/regportraits/Information/be.htm.
50 I would nevertheless add that reliance on a weighted average that takes into account the municipalities’ population (see footnote 35 above) would arguably provide a more representative benchmark. In the absence of relevant data, however, it is unclear whether this would lead to a materially different outcome or whether this is, in fact, the method already followed.
51 See the judgment in Sopora, paragraph 33 and the case-law cited.
