«(Free movement of workers – Tax convention – Netherlands rules on the avoidance of double taxation)»

Freedom of movement for persons – Workers – Equal treatment – Remuneration – Income tax – National rules on the avoidance of double taxation excluding taxpayers from entitlement to a tax concession because they have received income in another Member State which was taxed in that State without taking into account their personal and family circumstances – Not permissible – Conditions governing the taking into account of such circumstances – Requirements of Community law – None – Limits (EC Treaty, Art. 48 (now, after amendment, Art. 39 EC)) Article 48 of the Treaty (now, after amendment, Article 39 EC) precludes national rules ─ irrespective of whether or not they are laid down in a convention for the avoidance of double taxation ─ whereby a taxpayer forfeits, in the calculation of the income tax payable by him in his State of residence, part of the tax-free amount of that income and of his personal tax advantages because, during the year in question, he also received income in another Member State which was taxed in that State without his personal and family circumstances being taken into account.Moreover, Community law contains no specific requirement with regard to the way in which the State of residence must take into account the personal and family circumstances of a worker who, during a particular tax year, received income in that State and in another Member State, except that the conditions governing the way in which the State of residence takes those circumstances into account must not constitute discrimination, either direct or indirect, on grounds of nationality, or an obstacle to the exercise of a fundamental freedom guaranteed by the Treaty.see paras 110, 115, operative part 1-2

JUDGMENT OF THE COURT (Fifth Chamber) 12 December 2002 (1)

((Free movement of workers – Tax convention – Netherlands rules on the avoidance of double taxation))

In Case C-385/00,

REFERENCE to the Court under Article 234 EC by the Hoge Raad der Nederlanden (Netherlands) for a preliminary ruling in the proceedings pending before that court between

and

on the interpretation of Article 48 of the EC Treaty (now, after amendment, Article 39 EC) and Article 7 of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community (OJ, English Special Edition 1968 (II), p. 475),

THE COURT (Fifth Chamber),,

composed of: M. Wathelet (Rapporteur), President of the Chamber, C.W.A. Timmermans, D.A.O. Edward, P. Jann and A. Rosas, Judges,

Advocate General: P. Léger,

after considering the written observations submitted on behalf of:

having regard to the Report for the Hearing,

after hearing the oral observations of Mr de Groot, represented by R. van der Jagt, advocaat, the Netherlands Government, represented by H.G. Sevenster, acting as Agent, and the Commission, represented by H. Michard and H.M.H. Speyart, at the hearing on 18 April 2002,

after hearing the Opinion of the Advocate General at the sitting on 20 June 2002,

gives the following

The Community provisions

The other legal provisions applicable in the main proceedings

The conventions

National law

Rules and procedures for the avoidance of double taxation

Calculation of tax

Observations submitted to the Court

Findings of the Court

Whether there is an obstacle to freedom of movement for workers

Whether such an obstacle is justified

Findings of the Court

On those grounds,

THE COURT (Fifth Chamber),

in answer to the questions referred to it by the Hoge Raad der Nederlanden by order of 18 October 2000, hereby rules:

Wathelet

Timmermans

Edward

Jann

Rosas

Delivered in open court in Luxembourg on 12 December 2002.

R. Grass

M. Wathelet

Registrar

President of the Fifth Chamber