Provisional text

OPINION OF ADVOCATE GENERAL

SZPUNAR

delivered on 4 July 2024 (1)

Case C‑277/23

E.P.

v

Ministarstvo financija Republike Hrvatske, Samostalni sektor za drugostupanjski upravni postupak

[Request for a preliminary ruling from the Ustavni sud Republike Hrvatske (Constitutional Court, Croatia)]

(Reference for a preliminary ruling – Citizenship of the Union – Right to move and reside freely within the territory of the Member States – Fiscal legislation – Income tax – Calculation of the basic personal allowance for a dependent child who has received mobility support – Support exceeding the maximum threshold laid down in that legislation – Erasmus + programme – Mobility to a Member State with higher average living costs – Prohibition of discrimination – Restriction of free movement)

I.      Introduction

1.        The Erasmus programme (EuRopean Action Scheme for the Mobility of University Students) was designed with reference to a period during the Renaissance when students and intellectuals could move freely around Europe. It is thus named after the philosopher, philologist, theologian and humanist Erasmus of Rotterdam (1469-1536) who, seeing himself as a citizen of the world, lived and worked in several regions of Europe. He believed that it was only his links with other countries that provided him with the knowledge, experience and ideas that formed the subject of his studies. (2)

2.        Since being established in 1987, the Erasmus programme has enabled several generations of young students to move freely within the EU for educational purposes, thereby contributing to bringing the peoples of the Union closer together. It has also paved the way for the ‘Europe of education’, an inseparable part of the Europe of citizens, and subsequently, of citizenship of the Union. Today, the Erasmus + programme contributes to achieving EU cooperation in the key areas of education and training, which are closely linked to the EU’s economic and social development, and to promote the EU’s values, in accordance with Article 2 TEU. (3) And what of the future? In the future, the programme must continue to encourage student mobility as an objective in the public interest, and to consolidate EU values. Let us not forget that ‘democracy in the EU needs an educational substratum’. (4)

3.        In the present case, the Court of Justice is essentially being asked to interpret Articles 18, 20, 21 and 165 TFEU. In essence, an answer is required to the decisive questions raised before the referring court, the Ustavni sud Republike Hrvatske (Constitutional Court, Croatia), which may be summarised as follows: can the receipt of an Erasmus grant by a student who is a national of a Member State benefit, in part, the tax authorities of that Member State? Does the unfavourable tax treatment of a tax-paying parent accord with the objective of the Erasmus + programme, which is to encourage student mobility?

4.        The present reference for a preliminary ruling therefore gives the Court the opportunity to consider student mobility once again, against the backdrop of a Member State’s legislation on certain tax advantages, building on the Court’s case-law on the free movement of students. (5)

II.    Legal framework

A.      European Union law

5.        According to Article 21(1) TFEU, ‘every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect’.

6.        Article 165 TFEU provides, in paragraphs 1 and 2:

‘1.      The Union shall contribute to the development of quality education by encouraging cooperation between Member States and, if necessary, by supporting and supplementing their action, while fully respecting the responsibility of the Member States for the content of teaching and the organisation of education systems and their cultural and linguistic diversity.

…

2.      Union action shall be aimed at:

–      developing the European dimension in education, particularly through the teaching and dissemination of the languages of the Member States,

–      encouraging mobility of students and teachers, by encouraging inter alia, the academic recognition of diplomas and periods of study,

–      promoting cooperation between educational establishments,

–      developing exchanges of information and experience on issues common to the education systems of the Member States,

–      encouraging the development of youth exchanges and of exchanges of socio-educational instructors, and encouraging the participation of young people in democratic life in Europe,

…’

7.        Recital 40 of Regulation (EU) No 1288/2013, (6) in the version applicable to the facts of the dispute in the main proceedings (‘the Erasmus + Regulation’), stated:

‘In order to enhance access to the Programme, the grants to support the mobility of individuals should be adjusted to the living and subsistence costs of the host country. In accordance with national law, Member States should also be encouraged to exempt those grants from any taxes and social levies. The same exemption should apply to public or private bodies awarding such financial support to the individuals concerned.’

8.        Article 6 of the Erasmus + Regulation, entitled ‘Actions of the Programme’, provided in paragraph 1:

‘In the field of education and training, the Programme shall pursue its objectives through the following types of actions:

(a)      learning mobility of individuals;

…’

9.        Article 18 of the regulation, entitled ‘Budget’, provided, in paragraph 7:

‘The funds for the learning mobility of individuals referred to in point (a) of Article 6(1) and point (a) of Article 12 that are to be managed by a national agency or agencies (the “national agency”) shall be allocated on the basis of population and cost of living in the Member State, distance between capitals of Member States and performance. The performance parameter shall account for 25% of the total funds according to the criteria referred to in paragraphs 8 and 9. As regards strategic partnerships referred to in point (a) of Article 8(1) and point (a) of Article 14(1) that are to be selected and managed by a national agency, the funds shall be allocated on the basis of criteria to be defined by the Commission in accordance with the examination procedure referred to in Article 36(3). Those formulae shall, as far as possible, be neutral with respect to the different education and training systems of the Member States, shall avoid substantial reductions in the annual budget allocated to Member States from one year to the next and shall minimise excessive imbalances in the level of grants allocated.’

10.      Article 67 of Regulation No 883/2004, (7) entitled ‘Members of the family residing in another Member State’, provides:

‘A person shall be entitled to family benefits in accordance with the legislation of the competent Member State, including for his/her family members residing in another Member State, as if they were residing in the former Member State. However, a pensioner shall be entitled to family benefits in accordance with the legislation of the Member State competent for his/her pension.’

B.      Croatian law

11.      Article 6 of the Zakon o porezu na dohodak (Income Tax Law) as in force at the material time (8) (‘the ZPD’) provides that the income tax base is reduced by the personal allowance.

12.      Article 10 of the ZPD lists the amounts exempt from income tax. They include:

–      ‘scholarships intended for students in full-time education at higher educational institutions and universities, as well as for students undertaking doctoral and post-doctoral studies, for which funds are provided for in the State budget of the Republic of Croatia and scholarships paid from, that is to say awarded by, the EU budget, governed by specific international agreements and intended for students in full-time education in higher educational institutions’ (point 13);

–      ‘scholarships intended for students selected in public competitions which all students may enter under identical conditions, for full-time education at higher educational institutions paid for, that is to say awarded, by foundations, establishments and other institutions registered in the Republic of Croatia for the purposes of education and training or scientific research, the operation of which is regulated by special provisions and which are established for the purpose of awarding scholarships’ (point 18), and

–      amounts ‘paid as grants from European Union funds and programmes through authorities accredited in accordance with EU regulations in the Republic of Croatia for the implementation of mobility actions under EU programmes and funds for education and further training purposes, in accordance with the Financial Regulation of the European Commission, up to the prescribed amounts’ (point 20).

13.      Article 36 of the ZPD provides:

‘(1)      For residents, the total amount of income received in accordance with Article 5 of this law shall be reduced by a basic personal allowance of 2 200.00 [Croatian] kuna [(HRK) (approximately EUR 292)] for each month of the tax period for which the tax is assessed. …

(2)      Residents may increase the personal allowance referred to in paragraph 1 of this article by the following amounts:

…

2.      for dependent children: by 0.5 of the basic personal allowance for the first child, 0.7 for the second, 1.0 for the third, 1.4 for the fourth, 1.9 for the fifth and, for each additional child, the basic personal allowance factor is increased progressively by 0.6, 0.7, 0.8, 0.9, 1.0 … more than the basic personal allowance increase coefficient for the previous child …

…

(4) Members of the immediate family and dependent children are natural persons whose taxable income, exempt income and other amounts which, within the meaning of the present law, are not considered as income, do not exceed an amount corresponding to five times the basic personal allowance referred to in paragraph 1 of this article, on an annual basis.

(5) By way of derogation from paragraph 4, no account shall be taken, for the purposes of determining the right to deduct in respect of members of the immediate family and dependent children, of amounts paid under special provisions relating to social assistance, child allowances, new-born child support, namely sums intended for provisions for new-born children, or survivor's pensions paid out after the death of a parent. …’

14.      Article 54 of the ZPD prescribes, for certain taxpayers residing in assisted regions and in the city of Vukovar (Croatia), such as the applicant in the main proceedings, a higher amount of the basic personal allowance and, consequently, a higher increase to the allowance for dependent children, when applying the coefficients laid down in Article 36(2)(1) of the ZPD. According to the order for reference, the amount in question was HRK 3 000 (approximately EUR 398) at the time of the events and HRK 2 700 (approximately EUR 358) previously.

III. The relevant facts, the questions referred and the procedure before the Court of Justice

15.      The applicant in the main proceedings, a Croatian national, derives most of her income from paid employment. She is liable to pay income tax and a local income tax supplement. In view of her place of residence, she benefits from the tax advantages provided for by the ZPD.

16.      It is apparent from the order for reference that, during the taxable periods for the years prior to 2014, the applicant in the main proceedings benefited, pursuant to Article 36(2)(2) and Article 54(1)(2) of the ZPD, from the right to an increase in the basic allowance (non-taxable part of the annual amounts received) in respect of a dependent child who was, at the time in question, a full-time student in Finland on a university course.

17.      By decision of 27 July 2015, the Porezna uprava Ministarstva financija Republike Hrvatske (Tax Office of the Ministry of Finance of the Republic of Croatia) informed the applicant in the main proceedings, first, of the existence of a difference in the amounts of income tax and tax supplement arising from the fact that the basic allowance for her child, a dependent family member, was not applicable for the period from 1 January to 31 December 2014 and, second, of the amount she was liable to pay in that regard.

18.      The applicant in the main proceedings lodged an appeal against that notice of assessment with the Samostalni sektor za drugostupanjski upravni postupak Ministarstva financija Republike Hrvatske (Ministry of Finance, Independent Sector for Second-Instance Administrative Procedure, Croatia).

19.      In her view, she had wrongly been denied the right to an increase in the basic income tax allowance for 2014 in respect of her dependent child. In that regard, she states that her child received mobility support from the Finnish university Y for the academic year 2014/2015, under the Erasmus + programme, for the period of university study by her child in that Member State. She states that it is clear from the notice of assessment at issue that that mobility support exceeds the applicable threshold of HRK 11 000 (approximately EUR 1 460), laid down in Articles 36(4) and (5) of the ZPD, under which taxpayers are entitled to the increase in the basic allowance, as a social policy measure, in respect of income tax for a dependent family member under Article 36(1) and (4) of the ZPD (‘the contested provisions’). Furthermore, she submits that that mobility support should be classified as ‘social assistance’ and should therefore not be taken into account when determining entitlement to the increased allowance under Article 36(5) of the ZPD.

20.      By decision of 17 July 2019, the Ministry of Finance, Independent Sector for Second-Instance Administrative Procedure, dismissed her claim as unfounded.

21.      The applicant in the main proceedings brought an appeal against that decision before the Upravni sud Osijek (Osijek Administrative Court, Croatia), which the latter dismissed as unfounded on 30 January 2020.

22.      The applicant’s appeal in the main proceedings against that decision was also dismissed by the Visoki upravni sud Republike Hrvatske (Administrative Court of Appeal, Croatia) on 20 January 2021.

23.      The applicant in the main proceedings filed a constitutional appeal, inter alia, against that judgment before the Ustavni sud Republike Hrvatske (Constitutional Court). In support of her action, she relies, inter alia, on a complaint alleging breach of the obligation laid down in Article 141c of the Constitution to protect her subjective rights arising from EU law. She argues that she has been discriminated against under Article 18 TFEU, and disadvantaged, under Article 20(2)(a) and Article 21(1) TFEU, on the ground that her child has exercised the right to move and reside in another Member State for the purpose of education.

24.      The referring court asks whether, in the absence of any case-law of the Court of Justice that would provide a response to the allegations of a breach of the principle of the prohibition of discrimination or the disproportionate nature of the tax measures linked to student mobility under the Erasmus + programme, EU law is applicable to the situation of the applicant in the main proceedings and, more specifically, whether the tax legislation at issue is compatible with Articles 18, 20, 21 and Article 165(2) TFEU and Article 67 of Regulation No 883/2004.

25.      Taking the view that the dispute in the main proceedings raises questions of interpretation of EU law, the Ustavni sud Republike Hrvatske (Constitutional Court), by decision of 18 April 2023, which was received at the Court of Justice on 28 April 2023, decided to stay proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘1.      Should Articles 18, 20, 21 and the second indent of Article 165(2) TFEU be interpreted as precluding legislation of a Member State under which a parent loses the right to increase the annual basic income tax allowance for a dependent child who, as a dependent student having exercised his or her right freely to move and reside in another Member State for the purpose of study, has availed himself or herself, on the basis of national implementing acts, of the measures provided for in Article 6(1)(a) of [the Erasmus + Regulation] for the purpose of facilitating mobility from a Member State with lower or middle average living costs to a Member State with higher average living costs, as determined according to the criteria of the European Commission set out in Article 18(7) of that regulation, when that child receives student mobility support which exceeds a certain fixed limit?

2.      Should Article 67 of [Regulation No 883/2004] be interpreted as precluding legislation of a Member State under which a parent loses the right to increase the annual basic income tax allowance for a dependent student who, while studying in another Member State, availed himself or herself of the student mobility support provided for in Article 6(1)(a) of [the Erasmus + Regulation]?’

26.      Written observations were submitted to the Court by the Croatian Government and by the European Commission. The Court decided not to hold a hearing in the present case.

IV.    Analysis

27.      In the situation at issue in the main proceedings, a Croatian national, who was a full-time student, received mobility support from a Finnish university for a five-month period of university study in Finland during the 2014/2015 academic year under the Erasmus + programme. Receipt of that support had consequences for the calculation of the student’s mother’s income tax, since it took the mother's income above the threshold laid down by the national legislation, leading to the mother, who is a paid employee in Croatia, losing her right as a taxpayer to the increase of her basic allowance for a dependent child, under that social policy measure. It is apparent from the order for reference that, in so far as she was not entitled to the allowance provided for by that legislation for the period at issue in the main proceedings, the applicant in the main proceedings had to pay the resulting difference in the amounts of income tax and tax supplement of approximately HRK 4 500 (approximately EUR 597).

28.      The request for a preliminary ruling seeks, in essence, to ascertain whether EU law precludes national legislation under which mobility support under the Erasmus + programme received by a taxpayer’s dependent child is taken into account, producing unfavourable consequences for the determination of the amount of the basic allowance to which the tax-paying parent is entitled when his or her income tax is calculated.

29.      Before considering the questions referred by the referring court, it is necessary to set aside the objection raised by the Croatian Government as to the admissibility of the questions.

A.      Admissibility

30.      The Croatian Government considers that the questions referred for a preliminary ruling should be declared inadmissible on the ground that the tax position of the applicant in the main proceedings and, in particular, the calculation of her income tax and her right to the basic tax allowance, are governed by national law. According to the Croatian Government, mere participation in the Erasmus + programme must not be regarded as concerning all persons linked to a student taking part in that programme. In addition, that government submits that the present case concerns a purely internal situation, in view of the nationality of the applicant in the main proceedings, the fact that she works and receives income in Croatia and the fact that she has not personally made use of freedom of movement and has not personally benefited from student mobility support under that programme.

31.      To my mind, such arguments cannot be accepted.

32.      First, with regard to the relevance of the questions submitted to the Court, it should be recalled that it is solely for the national court before which the dispute in the main proceedings has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. It follows that questions referred by national courts enjoy a presumption of relevance and that the Court may refuse to rule on those questions only where it is quite obvious that the interpretation sought bears no relation to the actual facts of the dispute in the main proceedings or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to those questions. (9)

33.      That is not the case here. It should be noted that the referring court sets out precisely the reasons which led it to take the view that an interpretation of EU law is necessary in order to give judgment and that the questions referred for a preliminary ruling may affect the outcome of the dispute in the main proceedings. The referring court explains that, in view of the subject matter of the action before it and in the absence of any case-law of the Court of Justice that would provide a response to the allegations of a breach of the prohibition of discrimination or the disproportionate nature of the tax measures linked to student mobility under the Erasmus + programme, in order to give judgment, it must determine whether the individual acts which are the subject matter of the action before it are contrary to Articles 18, 20, 21 and Article 165(2) TFEU.

34.      In the second place, with regard to the argument that the dispute in the main proceedings should be regarded as ‘purely internal’ with respect to Articles 18, 20 and 21 TFEU, it should be recalled that it is settled case-law that the rules of the TFEU governing freedom of movement for persons and the measures adopted to implement them cannot be applied to activities which have no factor linking them with any of the situations governed by EU law and which are confined in all relevant respects within a single Member State. On the other hand, as the Court has stated, any national of a Member State, irrespective of his or her place of residence and nationality, who has exercised the right to freedom of movement in another Member State falls within the scope of those provisions. (10)

35.      In the present case, it should be noted that the order for reference contains the details necessary to enable the Court of Justice to find that the situation of the applicant in the main proceedings is linked with EU law. Furthermore, as the Court of Justice has already stated, although direct taxation falls within their competence, Member States must nonetheless exercise that competence consistently with EU law, (11) in particular with the provisions of the TFEU concerning the right of every citizen of the Union to move and reside freely within the territory of the Member States (12) and with the principle of equal treatment.

36.      In that context, it should be observed that, contrary to the claims of the Croatian Government, the situation of a national of a Member State, such as the applicant in the main proceedings, who has not made use of the right to freedom of movement cannot, for that reason alone, be assimilated to a purely internal situation. While it is certainly true that the applicant in the main proceedings did not personally exercise that right and did not personally benefit from the student mobility support under the Erasmus + programme, it is nonetheless common ground, first, that her dependent child exercised the right to freedom of movement (13) and, second, that, as the referring court points out, the unfavourable tax treatment of the applicant in the main proceedings, who is, in this case, the tax-paying parent, is indisputably linked to the mobility support received by her dependent child under that programme.

37.      I therefore take the view that the questions referred by the referring court are admissible.

B.      Substance

1.      The first question referred

38.      I would point out, at the outset, that, in accordance with the settled case-law of the Court of Justice, Article 21 TFEU contains not only the right to move and reside freely in the territory of the Member States but also a prohibition of any discrimination on grounds of nationality. Consequently, the situation of the applicant in the main proceedings should be examined in the light of that provision alone, (14) having regard to Article 165 TFEU.

39.      By its first question, the referring court seeks, in essence, to ascertain whether Article 21 TFEU, read in the light of the second indent of Article 165(2) TFEU, is to be interpreted as precluding legislation of a Member State which, for the purposes of determining the amount of the basic allowance to which a tax-paying parent is entitled in respect of a dependent child, takes into account the support for learning mobility from which the child has benefited under the Erasmus + programme, with the result that the right to an increase in that allowance is lost when the income tax is calculated.

40.      The Croatian Government takes the view that the contested provisions neither discriminate (directly or indirectly) against the persons concerned nor constitute an obstacle to their freedom of movement within the EU. On the other hand, the Commission takes the view that those provisions constitute a restriction on the free movement of persons provided for in Article 21 TFEU, read in the light of Article 165 TFEU and Article 4(3) TEU, since, in the present case, the unfavourable tax treatment of the income of the applicant in the main proceedings arises directly from the fact that her child has exercised the right to free movement.

41.      The present case therefore lies at the intersection between the field of direct taxation and that of free movement of EU citizens. In order to provide the Court of Justice with a useful answer to the first question referred for a preliminary ruling, and having regard to the objectives of the Erasmus + programme, I shall briefly analyse the specific nature of mobility support under that programme (in Section a) and shall then examine whether the legislation at issue in the main proceedings constitutes discrimination on grounds of nationality and/or a restriction on the freedom of movement of EU citizens (in Section b).

(a)    The specific nature of mobility support under the Erasmus + programme

42.      To provide a better understanding of the specific nature of mobility support within the Erasmus + programme, I shall briefly set out the origins of the programme. As the legal development of the programme is closely linked to that of the EU’s action in the field of education and training, now enshrined in Articles 165 and 166 TFEU, I shall examine their parallel development in the following sections.

(1)    The origins of EU action in the field of education and the Erasmus + programme

43.      I would point out at the outset that, although the 1957 Treaty of Rome already contained the seeds of the plans for Union action in the field of education, it was not until 1963 that the Council adopted a decision on the common vocational training policy (formerly Article 128 of the EEC Treaty), (15) thus opening up the debate on the link between vocational training and general education. (16) From that point onward, a number of steps had to be taken to ensure that education and training were at the heart of European cooperation, enabling the EU’s institutions to set up training and education programmes.

44.      The period from 1985 to 1992 should be a particular focus. It was during that period that the Comett (cooperation between universities and enterprises), Erasmus (student mobility and cooperation between universities) and Lingua (promotion of foreign language teaching) programmes were set up. During the same period, cooperation in the field of education was enshrined in the EC Treaty. (17) With the entry into force of the Treaty of Maastricht in 1992, the term ‘education’ appeared for the first time in the EC Treaty, (18) thus recognising the importance, in the project of building Europe, of the EU’s complementary role in promoting high-quality European education systems, while setting the limits of its role and the key objectives of its action, explicitly affirming the primary responsibility of the Member States for their education systems. The latter affirmation ensured full respect of the principle of subsidiarity. In addition, including education in primary law provided a clear legal basis, putting an end to the legal debates and disputes on the subject. (19) Finally, Article 165 TFEU, which was inserted into the Treaties by the Treaty of Lisbon, gave concrete expression to that legislative and judicial development. (20)

45.      The Erasmus programme was set up in 1987, after more than 15 years of discussion, to encourage student exchanges exclusively between universities in different Member States. (21) The programme thus paved the way for the ‘Europe of education’, an inseparable part of the ‘Europe of citizens’. (22) During its first year, 3 200 students from universities in 11 Member States participated in the programme. (23) Since then, the considerable success of the Erasmus programme has been amply demonstrated by the constant increase in the number of participants. In 2017, 9 million people benefited from the programme and, in 2024, more than 15 million people, including, among others, university students, as well as secondary school pupils, apprentices, educators and trainers or young graduates, participating in a wide range of education, training and mobility projects for young people.

46.      It follows from the development of the EU’s action in the field of education and training and from the development of the Erasmus programme, now called the ‘Erasmus + programme’, that the objectives of that programme are now enshrined in Article 165 TFEU. (24)

(2)    The shared objective of the EU’s action in the field of education and the Erasmus + Regulation: encouraging student mobility

47.      The Erasmus + Regulation, applicable in the present case, was adopted on the basis of Article 165(4) and Article 166(4) TFEU. [The first subparagraph of] Article 165(1) TFEU provides that the general objective of the Union is to contribute ‘to the development of quality education by encouraging cooperation between Member States and, if necessary, by supporting and supplementing their action, while fully respecting the responsibility of the Member States for the content of teaching and the organisation of education systems and their cultural and linguistic diversity.’ The second indent of Article 165(2) TFEU goes on to specify what the Union’s action is aimed at specifically, namely, inter alia, ‘encouraging mobility of students and teachers’. (25)

48.      The EU’s action was also enshrined in Article 6(1)(a) of the Erasmus + Regulation, which provided that, in the field of education and training, the Erasmus + programme is to pursue its objectives through various actions, including the ‘learning mobility of individuals’. (26) In that regard, Article 7 of that regulation provided that the EU’s action was to support, inter alia, ‘the mobility of students in all cycles of higher education’.

(3)    The specific nature of Erasmus + grants

49.      I would point out at the outset that, since the creation of the Erasmus programme, the principle of complementarity between EU and Member State funding has always been considered essential to the programme’s development. That is particularly true of student mobility support, given the ‘top-up’ nature of Erasmus + grants, which are intended to cover only the additional costs of mobility. (27)

50.      It is clear from recital 40 of the Erasmus + Regulation that, in order to enhance access to the programme, grants to support the mobility of individuals were to be adjusted to the living and subsistence costs of the host country. That recital also stated that, in accordance with national law, Member States should also be encouraged to exempt those grants from any taxes and social levies.

51.      In that regard, in relation to the Erasmus + programme budget, Article 18 of the Erasmus + Regulation provided that the funds for the learning mobility of individuals referred to in point (a) of Article 6(1) and point (a) of Article 12 of the regulation that were to be managed by a national agency or agencies were to be allocated ‘on the basis of population and cost of living in the Member State, distance between capitals of Member States and performance’. (28)

52.      As the Commission points out, in so far as the general and specific objective of the Erasmus + programme is to encourage the learning mobility of individuals, the Erasmus + grants are intended to contribute to the additional costs which would not have arisen in the absence of mobility. (29)

53.      That is, therefore, the evolving regulatory context in the light of which the legal issue raised by the referring court should be assessed.

(b)    Existence of substantiated discrimination based on nationality or a restriction on free movement of EU citizens

54.      Since the referring court itself has doubts as to the existence of indirect discrimination on grounds of nationality, I shall begin by examining that point.

(1)    Existence of discrimination

55.      With regard to direct taxation, it should be recalled that, according to settled case-law, outside the spheres in which EU tax law has been harmonised, the determination of the characteristics constituting each tax falls within the discretion of the Member States, in accordance with their fiscal autonomy, that discretion having, in any event, to be exercised in accordance with EU law. The Court of Justice has stated that that includes, in particular, the choice of tax rate, which may be proportional or progressive, and also the determination of the basis of assessment and the taxable event. (30)

56.      In that context, Member States must exercise such a power in compliance with EU law and, in particular, in compliance with the principle of equal treatment. Moreover, that requirement applies both to the measures by which that discretion is exercised and to the application of those measures. In addition, according to settled case-law, the principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified. (31) In that regard, it should be noted that the Court of Justice has previously held that the comparability of situations can necessarily be assessed only in the context of one and the same tax system. (32) It must also be recalled that the rules regarding equal treatment prohibit not only overt discrimination by reason of nationality but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result. (33)

57.      In the present case, the referring court states that it is difficult to identify a reference group to which the situation of the applicant in the main proceedings could be compared for the purposes of determining whether there has been a breach of the principle of equal treatment in the case at issue.

58.      In particular, that court considers that, at first sight, the application of the contested provisions could create, as regards the costs incurred by parents for the maintenance of their dependent children, a difference in treatment between, on the one hand, tax-paying parents with a dependent child who has exercised the right to freedom of movement under the Erasmus + programme in order to go to a Member State where the cost of living is similar or higher, as is the case with the applicant in the main proceedings, and, on the other hand, tax-paying parents with a dependent child who has exercised that right under the same programme in order to go to a Member State where the cost of living is similar or lower, as well as those with a dependent child who has not exercised that right in order to pursue university studies, the latter not having incurred any mobility-related costs.

59.      However, the referring court states that, having regard, in particular, to the objectives of the Erasmus + Regulation, the situation of the applicant in the main proceedings is not comparable, in general, either to that of persons liable to income tax whose children have not exercised their right to freedom of movement, or to that of such persons whose children have obtained mobility support under the Erasmus + programme for a period of university study in Member States with similar or lower living costs.

60.      The referring court appears to take the view that the situation of the applicant in the main proceedings is different from that of other persons liable to income tax and that, consequently, she should not be given the same tax treatment.

61.      In that regard, it should be noted that, from the point of view of the objectives of the Erasmus + programme and the specific nature of the grants obtained under that programme, (34) the situations of those categories of tax-paying parents are not comparable. (35) On the contrary, in view of the specific features of the Erasmus + grants, they are different situations which should not be treated equally. That, in turn, implies that Erasmus + mobility support should not be taken into account when calculating the income tax of tax-paying parents, which it is for the referring court to determine.

62.      In any event, I am satisfied that the contested provisions constitute a restriction on the free movement of students, for the following reasons.

(2)    Existence of a restriction on freedom of movement

63.      I would point out that, as a Croatian national, pursuant to Article 20(1) TFEU the applicant in the main proceedings enjoys the status of citizen of the European Union, which, as the Court has observed on numerous occasions, is destined to be the fundamental status of nationals of the Member States. (36) She may therefore rely, including against her Member State of origin, on the rights conferred on those having that status, such as the right to move and reside freely within the territory of the Member States conferred by Article 21 TFEU. (37)

64.      I would also recall that it is apparent from settled case-law that national legislation which places certain nationals at a disadvantage simply because they have exercised their freedom to move and to reside in another Member State constitutes a restriction of the freedoms conferred by Article 21(1) TFEU on every citizen of the Union. (38) It is true that the Court of Justice has already held that the Treaty offers no guarantee to a citizen of the Union that the exercise of his or her freedom of movement will be neutral as regards taxation. In that regard, the Court has pointed out, on the one hand, that, given the disparities in the tax legislation of the Member States, exercising that right may be to the citizen’s advantage or not, according to circumstances. On the other hand, the same principle applies a fortiori to a situation where the person concerned has not himself or herself made use of the right of movement, but claims to be the victim of less favourable treatment following the exercise of a family member’s freedom of movement. (39)

65.      However, I note, as is apparent from the order for reference and as the Commission emphasises, that the exercise of the applicant’s dependent child’s right to free movement under the Erasmus + programme had a definite effect on the applicant’s right to a tax deduction. (40)

66.      Under those circumstances, it is also apparent from the case-law of the Court of Justice that the opportunities offered by the Treaty in relation to freedom of movement for citizens of the Union cannot be fully effective if nationals of a Member State can be deterred from availing themselves of them because of obstacles arising from their stay in another Member State due to legislation of their State of origin which penalises the mere fact that they have used those opportunities. (41) It should not be forgotten, as the Court of Justice has also noted, that that consideration is particularly important in the field of education in view of the aims pursued by Article 6(e) and the second indent of Article 165(2) TFEU, namely, in particular, encouraging mobility of students and teachers. (42) Although the Member States are competent, under Article 165(1) TFEU, as regards the content of teaching and the organisation of their respective education systems, they must exercise that competence in compliance with EU law and, in particular, in compliance with the Treaty provisions on the freedom to move and reside within the territory of the Member States, as conferred by Article 21(1) TFEU on all citizens of the Union. (43)

67.      In that regard, it should be added that the shared objective assigned to the European Union’s action in the field of education, under Article 165(2) TFEU and the Erasmus + Regulation, is to encourage the mobility of students and teachers. (44) With regard to that objective, the Court of Justice has already held that it is in the public interest and that it is one of the actions which Article 165 TFEU assigns to the European Union in the context of educational policy, vocational training, youth and sport, and that mobility in education and training is an integral part of freedom of movement for persons and that it is one of the main objectives of the European Union’s action. (45)

68.      In the present case, although Erasmus + mobility support is not, as such, subject to taxation in Croatia, it is common ground that the applicant in the main proceedings, whose dependent child received Erasmus + mobility support and, consequently, exercised the right of free movement and residence in Finland, was penalised by the contested provisions. The fact that those provisions provide for the amount of Erasmus + mobility support received by the dependent child to be taken into account resulted in the loss of the parent’s right to an increase in the basic allowance.

69.      As the referring court explains and as the Commission rightly points out, the deterrent effect is particularly clear from the report of the Ombudsman of the Republic of Croatia for 2017. (46) According to that report, Croatian universities reported that many students interested in the Erasmus + programme withdrew after being informed that, according to the interpretation adopted by the Croatian Ministry of Finance, the receipt of Erasmus + mobility support had the effect of depriving their parents of the right to an increased basic allowance for a dependent student. The referring court adds that, following the Ombudsman’s recommendation, the ZPD was amended in 2018. (47)

70.      I am therefore of the view that the contested provisions are liable to dissuade EU nationals, such as university students, from exercising their freedom to move and reside in another Member State for the purposes of education because of the impact that the exercise of that freedom may have on their tax-paying parents’ right to a tax deduction.

(3)    Justification

71.      I would recall that a restriction of the freedom of movement and residence can be justified in the light of EU law only if it is based on objective considerations of public interest independent of the nationality of the persons concerned, and if it is proportionate to a legitimate objective pursued by the provisions of national law. A measure is proportionate when, while appropriate for securing the attainment of the objective pursued, it does not go beyond what is necessary in order to attain it. (48)

72.      As regards, in the first place, the identification of an objective consideration of public interest, the referring court states that the contested provisions pursue, in accordance with the principles of equality and justice in the tax system and of the sound management of limited public resources, a legitimate objective of correcting, in the light of median income and average expenditure, the social and material inequalities between taxpayers with dependent children and those who do not incur costs in connection with the maintenance of children. (49)

73.      In that regard, the contested provisions thus have the legitimate effect of taking into account the ability to pay of parents who are subject to income tax. (50) However, in so far as it is common ground that those provisions constitute a restriction on the freedom of movement of university students within the EU, that restriction can be validly justified only if those provisions comply with the principle of proportionality.

74.      With regard, in the second place, to proportionality, it should be recalled that the Court of Justice has consistently held that legislation which is liable to restrict a fundamental freedom guaranteed by the Treaty, such as the right to freedom of movement and residence for citizens of the European Union, can be justified only if it is appropriate for securing the attainment of the legitimate objective pursued and if it does not go beyond what is necessary in order to attain it, (51) which is a matter for the referring court to determine.

75.      As regards, first, the appropriateness of the contested provisions, the question arises as to whether those provisions are capable of securing, in a coherent and systematic manner, the attainment of the objective pursued by the legislation at issue in the main proceedings.

76.      It seems to me that the answer to that question is no.

77.      It follows from my analysis of the specific nature of Erasmus + mobility support that, in so far as the objective of the Erasmus + programme is to encourage student mobility for the purposes of education, in particular in the context of university education, that support contributes only to the additional costs which would not have arisen in the absence of mobility and, consequently, their receipt does not lead to a reduction in the costs of tax-paying parents as part of their maintenance obligation (in respect of dependent children). (52)

78.      Consequently, as the referring court itself points out, by laying down a threshold for entitlement to an increase in the basic allowance without taking account of the differences between the various categories of tax-paying parents, the contested provisions are contrary to the legitimate objective of Article 36(2) of the ZPD, under which the right to a basic allowance for dependent children is recognised in order to correct social and material inequalities between taxpayers.

79.      In that regard, I have doubts as to the consistency of the contested provisions in so far as is apparent from the decision to refer the case, the Croatian Government had stated, in setting out an explanation for the amendment of those provisions, that the previous legislation, namely the legislation applicable to the applicant in the main proceedings, had the effect of prompting young people, mainly those from disadvantaged backgrounds, to withdraw from the Erasmus + programme. It is also apparent from that decision that that amendment excluded the amounts of the Erasmus + grants from the category of amounts that were taken into account when calculating the income tax of tax-paying parents and on the basis of which the tax authorities could refuse them the right to such an allowance. (53)

80.      It follows that the contested provisions are not suitable for attaining the public interest objective they pursue, namely taking into account the ability to pay of parents who are subject to income tax.

81.      As regards, second, the necessity of the contested provisions in order to attain that objective, it is clear from the legislative amendment at issue that those provisions went beyond what is necessary to attain the objective pursued. In particular, the amendment demonstrates that it was possible for the Croatian legislature to take less restrictive measures by taking account of the specific nature of the mobility support and the objective of the Erasmus + programme, and therefore without unjustifiably placing at a disadvantage tax-paying parents of students who have received mobility support under the Erasmus + programme and who have, therefore, exercised their freedom of movement by going to study at a university in another Member State.

2.      The second question referred

82.      By its second question for a preliminary ruling, the referring court asks, in essence, whether the contested provisions are compatible with Article 67 of Regulation No 883/2004. The Croatian Government and the Commission consider that Article 67 of that regulation is not applicable in the present case.

83.      It should be recalled that Article 3(1)(j) of Regulation No 883/2004 provides that the regulation applies to ‘all legislation concerning the following branches of social security: … family benefits’. Thus, in order to determine whether a particular benefit is one of the family benefits referred to in that provision, it should be noted that, according to Article 1(z) of Regulation No 883/2004, in the version applicable to the facts in the main proceedings, the term ‘family benefits’ means ‘all benefits in kind or in cash intended to meet family expenses, excluding advances of maintenance payments and the special childbirth and adoption allowances mentioned in Annex I’ (emphasis added).

84.      As regards the right to a tax deduction for a dependent child at issue in the main proceedings, it should be noted that it is clear from the legal framework that such a deduction is not a benefit in kind intended to meet family expenses but rather a tax advantage which, under certain conditions, reduces the amount of income tax. (54)

85.      Accordingly, in so far as the right to a tax deduction at issue in the main proceedings does not constitute a family benefit within the meaning of Article 1(z) of Regulation No 883/2004, Article 67 of that regulation is not applicable to legislation such as that at issue in the main proceedings.

V.      Conclusion

86.      In the light of the foregoing, I propose that the Court answer the first question referred for preliminary ruling by the Ustavni sud Republike Hrvatske  (Constitutional Court, Croatia) as follows:

Article 21 TFEU, read in the light of the second indent of Article 165(2) TFEU,

must be interpreted as precluding legislation of a Member State which, for the purposes of determining the amount of the basic allowance to which a tax-paying parent is entitled in respect of a dependent child, takes into account the support for learning mobility from which the child has benefited under the Erasmus + programme, with the result that the right to an increase in that allowance is lost when the income tax is calculated.

1      Original language: French.

2      Pépin, L., The history of European cooperation in education and training. Europe in the making – an example, Publications Office of the European Union, Luxembourg, 2006, p. 116.

3      Article 2 TEU provides that ‘the Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.’

4      Grimonprez, K., The European Union and Education for Democratic Citizenship. Legal Foundations for EU learning at school, Nomos Verlagsgesellschaft, Baden-Baden, 2020, p. 17.

5      See, in particular, judgment of 24 October 2013, Thiele Meneses, (C‑220/12, ‘the judgment in Thiele Meneses’, EU:C:2013:683).

6      Regulation of the European Parliament and of the Council of 11 December 2013 establishing ‘Erasmus+’: the Union programme for education, training, youth and sport and repealing Decisions No 1719/2006/EC, No 1720/2006/EC and No 1298/2008/EC (OJ 2013 L 347, p. 50). That regulation was repealed by Regulation (EU) 2021/817 of the European Parliament and of the Council of 20 May 2021 establishing Erasmus+: the Union Programme for education and training, youth and sport and repealing Regulation (EU) No 1288/2013 (OJ 2021 L 189, p. 1).

7      Regulation of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ 2004 L 166, p. 1).

8      Narodne novine Nos 177/04, 73/08, 80/10, 114/11, 22/12, 144/12, 43/13, 120/13, 125/13 and 148/13.

9      See, in particular, judgment of 21 December 2023, Royal Antwerp Football Club (C‑680/21, EU:C:2023:1010, paragraph 35 and the case-law cited).

10      See, to that effect, judgment of 1 April 2008, Government of the French Community and Walloon Government (C‑212/06, EU:C:2008:178, paragraphs 33 and 34 and the case-law cited). See, also, judgment of 15 November 2016, Ullens de Schooten (C‑268/15, EU:C:2016:874, paragraph 50). As a reminder, the Court of Justice clearly summarised and listed, in paragraphs 50 to 53 of that judgment, the four situations in which requests for a preliminary ruling concerning cases arising from purely domestic situations are nevertheless admissible.

11      Judgment of 11 September 2007, Schwarz and Gootjes-Schwarz (C‑76/05, EU:C:2007:492, paragraph 69 and the case-law cited).

12      Judgment of 12 July 2005, Schempp (C‑403/03, ‘the judgment in Schempp’, EU:C:2005:446, paragraph 19 and the case-law cited).

13      See, to that effect, the judgment in Schempp (paragraphs 22 and 23 and the case-law cited).

14      See judgments of 8 June 2017, Freitag (C‑541/15, EU:C:2017:432, paragraph 31 and the case-law cited), and of 19 November 2020, ZW (C‑454/19, EU:C:2020:947, paragraphs 28 and 29).

15      Article 128 of the EEC Treaty was repealed in 1992 by the Treaty of Maastricht, which was signed on 7 February 1992 (OJ 1992 C 191, p. 1) and entered into force on 1 November 1993. It was replaced by Articles 126 and 127 of the EC Treaty, now Articles 165 and 166 TFEU respectively. See footnote 18 of the present Opinion.

16      Council Decision 63/266/EEC of 2 April 1963 laying down general principles for implementing a common vocational training policy (OJ, English Special Edition, Series I 1963-1964, p. 25).

17      See Pépin, L., The history of European cooperation in education and training, op. cit., pp. 16 to 18, 97 and 143 et seq.

18      Pursuant to Article 3(p) of the EC Treaty [3(q) TFEU], ‘… the activities of the Community shall include, as provided in this Treaty and in accordance with the timetable set out therein: a contribution to education and training of quality’. That provision referred to Articles 126 of the EC Treaty (education) and 127 of the EC Treaty (vocational training), now Articles 165 and 166 TFEU respectively.

19      See Pépin, L., The history of European cooperation in education and training, op. cit, pp. 39 et seq.

20      On the fundamental role played by the case-law of the Court of Justice in the field of European cooperation in education, see the judgment of 13 February 1985, Gravier (293/83, EU:C:1985:69, paragraph 31 and operative part). That judgment brought higher education within the scope of the Treaty (formerly Article 128 of the EEC Treaty) and enabled the Commission to propose the adoption of large-scale programmes such as Comett and Erasmus. See, also, judgments of 2 February 1988, Blaizot and Others (24/86, EU:C:1988:43, paragraph 29 and point 1 of the operative part); of 30 May 1989, Commission v Council (242/87, EU:C:1989:217, paragraph 37); and of 11 June 1991, United Kingdom and Others v Council (C‑51/89, C‑90/89 and C‑94/89, EU:C:1991:241, paragraphs 10 and 31). For an analysis of that case-law, see Lenaerts, K., ‘Education in European Community Law after “Maastricht”’, Common Market Law Review No 31, 1994, pp. 7 to 41, in particular pp. 19 et seq.

21      Despite initial difficulties concerning, in particular, disagreement over the budget and the legal basis, the proposal for a decision adopting the European Community Action Scheme for Mobility of University Students (Erasmus) was presented by the Delors Commission to the Council on 3 January 1986 (OJ 1986 C 73, p. 4). That proposal, supported by the London European Council of 5 and 6 December 1986 (DOC/86/2), was finally adopted by the Council on 15 June 1987 (Decision 87/327/EEC (OJ 1987 L 166, p. 20)). On the programme’s genesis, see, in particular, Traversa, E., ‘Histoire juridique méconnue du programme “Erasmus” (1985-1987)’, Revue du Droit de l'Union Européenne No 4, 2017, pp. 1 to 20.

22      See Conclusions of the Fontainebleau European Council of 25 and 26 June 1984 (DOC/84/2). See Richonnier, M., ‘Comment l’Europe des citoyens (éducation et santé publique) est-elle née en 1987 ? Histoire d’un commencement (1984-1989)’, L’Europe en Formation Noº3, 2012, pp. 163 to 194. See also Jones, H. C., ‘Origins of the Erasmus programme. Development of Erasmus + and the Future’, Vox No 124, March 2023, pp. 17 to 27, and ‘Education in a Changing Europe’, Charles Gittins Memorial Lecture presented at the University College of Wales, Swansea, Wales, United Kingdom, 16 March 1992, p. 6. On the link between the European dimension in education EU and citizenship, see Grimonprez, K., The European Union and Education for Democratic Citizenship. Legal Foundations for EU Learning at School, op. cit., p. 634.

23      They were the Kingdom of Belgium, the Kingdom of Denmark, the Federal Republic of Germany, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Kingdom of the Netherlands, the Portuguese Republic and the United Kingdom of Great Britain and Northern Ireland. Since the United Kingdom’s departure from the EU, 33 countries are now participating in all the actions of the Erasmus + programme, namely the 27 EU Member States and Iceland, Liechtenstein, North Macedonia, Norway, Serbia and Türkiye.

24      See, in that regard, Traversa, E., ‘Histoire juridique méconnue du programme “Erasmus” (1985-1987)’, op. cit. p. 19.

25      Emphasis added. On the interpretation of Article 165 TFEU, see Grimonprez, K., The European Union and Education for Democratic Citizenship. Legal Foundations for EU Learning at School, op. cit., pp. 595 to 686.

26      Emphasis added. As regards its general objective, it is clear from Article 4(b) and (f) of the Erasmus + Regulation that the Erasmus programme is to contribute to the achievement of the objectives of the strategic framework for European cooperation in education and training (‘ET 2020’), and to the promotion of European values in accordance with Article 2 TEU. More specifically, Article 5(1)(a) of the Erasmus + Regulation provides that the programme is to pursue various specific objectives, including that of ‘[improving] the level of key competences and skills, with particular regard to their relevance for the labour market and their contribution to a cohesive society, in particular through increased opportunities for learning mobility and through strengthened cooperation between the world of education and training and the world of work’(emphasis added).

27      See, in particular, the ERASMUS Programme. Annual Report 1994 presented by the Commission, COM(95) 416 final, p. 10.

28      Emphasis added. Point (a) of the first paragraph of Article 12 of the Erasmus + Regulation provided that, in the field of youth, the specific objectives listed in Article 11 of that regulation were to be pursued by the action concerning the ‘learning mobility of individuals’.

29      In particular, the 2014 Erasmus + programme guide states that higher education students may receive an EU grant ‘as a contribution to their costs for travel and subsistence during the period of study or traineeship abroad’. Thus, the amount of the grant is determined according to whether the ‘destination’ Member State has higher, similar or lower living costs than the ‘home’ Member State. To that end, the guide classifies Member States into three groups. Finland is in Group 1 (countries with higher living costs) and Croatia is in Group 2 (countries with medium living costs). With regard to mobility from Croatia to Finland, the guide specifies that the amount of support will be in the ‘higher’ range, corresponding to the average grant awarded by the national agency plus at least EUR 50, namely an amount of between EUR 250 and 550 per month. See ‘Erasmus +. Programme Guide’, European Commission, 2014, pp. 46 and 47.

30      See judgments of 16 March 2021, Commission v Hungary (C‑596/19 P, EU:C:2021:202, paragraph 44), and of 23 November 2023, Ministarstvo financija (C‑682/22, EU:C:2023:920, paragraph 34).

31      See, in particular, to that effect, judgment of 9 September 2021, Hauptzollamt B (Optional tax reduction) (C‑100/20, EU:C:2021:716, paragraphs 31 and 32, and the case-law cited).

32      See, in particular, judgment of 15 September 2011, Schulz-Delzers and Schulz (C‑240/10, EU:C:2011:591, paragraph 40).

33      See, in particular, judgments of 12 February 1974, Sotgiu (152/73, EU:C:1974:13, paragraph 11); of 14 February 1995, Schumacker (C‑279/93, EU:C:1995:31, paragraph 26); and of 24 February 2015, Sopora (C‑512/13, EU:C:2015:108, paragraph 23).

34      See points 43 to 52 of the present Opinion.

35      In that regard, the Commission has pointed out that it was difficult to compare the situation of tax-paying parents whose children benefited from student mobility support and the situation of parents whose children obtained income from a student job or from grants not linked to mobility.

36      See judgment of 20 September 2001, Grzelczyk (C‑184/99, EU:C:2001:458, paragraph 31); the judgment in Schempp (paragraph 15), and judgment of 18 April 2024, Préfet du Gers and Institut national de la statistique et des études économiques (C‑716/22, EU:C:2024:339, paragraph 40).

37      See, in particular, judgment of 26 October 2006, Tas-Hagen and Tas (C‑192/05, EU:C:2006:676, paragraph 19), and the judgment in Thiele Meneses (paragraphs 18 and 19 and the case-law cited).

38      See, in particular, judgment of 11 July 2002, D’Hoop (C‑224/98, EU:C:2002:432, paragraph 31); the judgment in Thiele Meneses (paragraph 22), and judgment of 26 May 2016, Kohll and Kohll-Schlesser (C‑300/15, EU:C:2016:361, paragraph 42).

39      See, to that effect, the judgment in Schempp (paragraphs 45 and 46). It should be recalled that in the case giving rise to that judgment, the referring court had doubts concerning whether Articles 12 and 18 EC precluded the German tax authorities from refusing deduction of the maintenance paid by the applicant to his former spouse resident in Austria. The applicant, who had not himself exercised his right to freedom of movement, was challenging the loss of a tax advantage caused by his former spouse’s move from Germany to Austria. However, since the payment of such maintenance to a recipient resident in Austria could not be compared to such a payment to a recipient resident in Germany, because they were subject to different tax systems, the Court of Justice ruled that the treatment was not discriminatory.

40      See, in that regard, the judgment in Schempp (paragraph 25).

41      See, in particular, the judgment in Thiele Meneses (paragraph 23 and the case-law cited).

42      See, in particular, judgments of 11 July 2002, D’Hoop (C‑224/98, EU:C:2002:432, paragraph 32); of 7 July 2005, Commission v Austria (C‑147/03, EU:C:2005:427, paragraph 44); and the judgment in Thiele Meneses (paragraph 24).

43      See, in particular, the judgment in Thiele Meneses (paragraph 21); judgments of 26 February 2015 Martens (C‑359/13, EU:C:2015:118, paragraph 23); and of 25 July 2018, A (Assistance for a disabled person) (C‑679/16, EU:C:2018:601, paragraph 58).

44      See points 46 to 48 of the present Opinion.

45      Judgment in Thiele Meneses (paragraph 48 and the case-law cited).

46      Report available at: https://www.ombudsman.hr/en/download/annual-ombudsman-report-for-2017/?wpdmdl= 5091&refresh= 66717344e124e1718711108.

47      It is apparent from the order for reference that amendments were made, without retroactive effect, to the tax legislation at issue in the main proceedings in 2018, so that, under the new Article 17(2)(10) of the ZPD, amounts such as ‘scholarships, prizes for pupils and students awarded from budgets and grants financed by the budget, European Union funds and programmes and other international funds and programmes governed by special provisions and international conventions for the purposes of education and further training’ are no longer taken into account in calculating the basic allowance. In the explanatory memorandum on the proposed amendment sent to the Croatian Parliament, the Croatian Government had pointed out that the effect of the previous legislation had been that ‘young people, mainly from disadvantaged backgrounds, […] are not opting for the programmes in question because they can then no longer be dependent on their parents’.

48      See, in particular, the judgment in Thiele Meneses (paragraph 29); and judgments of 26 February 2015, Martens (C‑359/13, EU:C:2015:118, paragraph 34), and of 22 February 2024, Direcţia pentru Evidenţa Persoanelor şi Administrarea Bazelor de Date (C‑491/21, EU:C:2024:143, paragraph 52).

49      Thus, according to the referring court, that provision does not grant a right to the increase in the basic allowance for taxpayers whose dependent children receive, in the course of a tax year, non-taxable income of a certain amount which, in the legislature’s evaluation, enables the child to contribute to his or her maintenance from his or her own income and to reduce the expenses incurred by his or her parents as part of their maintenance obligation, as opposed to taxpayers whose children are not entitled to a non-taxable income – or who are only entitled to a very small income of that nature – and who may therefore only be maintained by means of the parents’ income.

50      See, in that regard, judgment of 21 December 2021, Finanzamt V (Inheritance – Partial allowance and deduction of reserved portions) (C‑394/20, EU:C:2021:1044, paragraph 52).

51      See judgment in Thiele Meneses (paragraph 49 and the case-law cited).

52      See points 43 to 52 of the present Opinion.

53      See, in that regard, footnote 47 of the present Opinion.

54      See, in that regard, judgment of 16 June 2022, Commission v Austria (Indexation of family benefits) (C‑328/20, EU:C:2022:468, paragraph 61).