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Judgment of the Court of 28 November 1991.

Georg Schwedler v European Parliament.

Officials - Tax abatement - Dependent child.

Case C-132/90 P.

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Judgment of 28 November 1991, Schwedler / Parliament (C-132/90 P, ECR 1991 p. I-5745) ECLI:EU:C:1991:452

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Georg Schwedler v European Parliament.

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Keywords

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1. Officials - Remuneration - Taxation - Abatement for dependent child - Conditions of availability - Actual maintenance of the child by the official - Concept - Children for whom the army makes full provision during their military service - Excluded

(Staff Regulations, Annex VII, Art. 2(2); Regulation No 260/68 of the Council, Art. 3(4), second subparagraph)

2. Officials - Remuneration - Family allowances - Dependent child allowance - Relationship with tax abatement for a dependent child

(Staff Regulations, Annex VII, Art. 2(2); Regulation No 260/68 of the Council, Art. 3(4), second subparagraph)

Summary

1. The social objective pursued by the tax abatement for dependent children of Community officials requires account to be taken, in the application thereof, only of expenses justified by an existing and established need connected with the existence of a child and the actual maintenance of the child.

Whilst it is not impossible for a child to be considered to be actually maintained within the meaning of Article 2(2) of Annex VII to the Staff Regulations by a number of different persons or organizations at the same time and, in such a case, to be regarded as being simultaneously dependent on them, where the obligation to support the costs of maintaining a child no longer falls on the official concerned but falls entirely on another subject of law, the tax abatement becomes devoid of purpose.

Consequently, where the maintenance of young people doing military service is provided for entirely by the army, they cannot, for the duration of their military service, be regarded as dependent on the officials concerned or give rise to entitlement to a tax abatement.

2. Whilst it is true that there is no exact parallel between the dependent-child allowance and the tax abatement granted for the same reasons, the fact nevertheless remains that, pursuing as they do the same social objective and reflecting the same concern, the provisions relating to the dependent-child allowance may be taken into account to corroborate the interpretation of the provisions relating to tax abatements for dependent children.

Parties

In Case C-132/90 P,

Georg Schwedler, represented by Mr Wenning, of the Bonn Bar, with an address for service in Luxembourg at the chambers of Marc Lucius, Avocat-Avoué, 6 Rue Michel Welter,

appellant,

APPEAL against the judgment delivered by the Court of First Instance of the European Communities (Fifth Chamber) on 8 March 1990 in Case T-41/89 Georg Schwedler v European Parliament, seeking the partial setting aside of that judgment,

the other party to the proceedings being

European Parliament, represented by Manfred Peter, Head of Division, acting as Agent, assisted by Francis Herbert, of the Brussels Bar, with an address for service in Luxembourg at the General Secretariat of the European Parliament, Kirchberg, which contends that the Court of Justice should dismiss the appeal as partially inadmissible and entirely unfounded,

THE COURT,

composed of: O. Due, President, Sir Gordon Slynn, R. Joliet, F.A. Schockweiler and F. Grévisse (Presidents of Chambers), G.F. Mancini, C.N. Kakouris, J.C. Moitinho de Almeida, G.C. Rodríguez Iglesias, M. Díez de Velasco and M. Zuleeg, Judges;

Advocate General: G. Tesauro,

Registrar: J.A. Pompe, Deputy Registrar,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 29 May 1991, at which Mr Schwedler was represented by Mr Moritz, of the Bonn Bar,

after hearing the Opinion of the Advocate General at the sitting on 3 July 1991,

gives the following

Judgment

Grounds

1 By application lodged at the Court Registry on 8 May 1990, Georg Schwedler brought an appeal under Article 49 of the Protocol on the Statute of the Court of Justice of the EEC and the corresponding provisions of the Protocols on the Court of Justice of the ECSC and EAEC, against the judgment of the Court of First Instance of 8 March 1990 in so far as the latter dismissed his application for the annulment of the decisions taken on 22 December 1987 by the Director- General for Personnel, the Budget and Finance and on 2 May 1988 by the Secretary-General of the European Parliament, refusing to grant him a tax abatement in respect of a dependent child.

2 In support of his appeal, the appellant relies on three grounds: first, misinterpretation by the Court of First Instance of the European Communities of the term "child... actually being maintained by the official" within the meaning of Article 2(2) of Annex VII to the Staff Regulations of Officials of the European Communities; secondly, the incorrect conclusion drawn by the Court of First Instance that the appellant' s son' s absences from barracks were of his own choosing; and thirdly, the irrelevance to the determination of the dispute of the interpretation of Article 2(3), (4) and (5) of Annex VII to the Staff Regulations.

3 In his first ground of appeal, the appellant accuses the Court of First Instance of imposing an unacceptable limitation on the expression "actually being maintained", as used in Article 2(2) of Annex VII to the Staff Regulations and as interpreted by the Court of Justice in its judgment in Joined Cases 81, 82 and 146/79 Sorasio and Others v Commission [1980] ECR 3557, by holding that the tax abatement for a dependent child can be granted only to "the person who assumes actual responsibility for all the child' s basic needs" and that there can be no actual maintenance, as provided for in that Article 2(2), by more than one person at the same time. In particular, that interpretation by the Court of First Instance excludes the possibility of taking account of partial maintenance of a child, whereas the case-law of the Court of Justice imposes no such limitation.

4 The appellant also states that according to internal circulars (instructions from Mr Nord of 31 October 1963 on the implementation of Article 2(2) of Annex VII to the Staff Regulations and Conclusion No 188/89 of the Heads of Administration (revised version of 30 January 1990) that even partial maintenance of a child may give rise to entitlement to a dependent-child allowance.

5 In his second ground of appeal, the appellant maintains that in view of the fact that people called on to do military service, the public and the legislature all take it for granted that in a modern, social, democratic State soldiers doing military service, like other people, serve only an eight-hour (working) day and, by contrast with earlier practice, do not have to spend all their free time, weekends and other public holidays in barracks, the Court of First Instance was wrong to consider that the spending of time away from barracks represented a choice on the part of the person concerned.

6 In his third ground of appeal, the appellant challenges the conclusions drawn by the Court of First Instance from its analysis of Article 2(3), (4) and (5) of Annex VII to the Staff Regulations, since the only legal issue to be determined was the interpretation of Article 2(2) of Annex VII, that being the provision referred to by the second subparagraph of Article 3(4) of Regulation (EEC) No 260/68 of the Council of 29 February 1968 laying down the conditions and procedure for applying the tax for the benefit of the European Communities (Official Journal, English Special Edition 1968 (I), p. 37) for the purposes of defining the term "dependent child".

7 Reference is made to the Report for the Hearing for a fuller account of the grounds of appeal and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

Admissibility

8 The European Parliament has raised an objection of partial inadmissibility, considering that the appellant' s first two grounds of appeal disregard the fact that the jurisdiction of the Court of Justice in appeals is limited to points of law.

9 It must be stated that, according to Article 168a of the EEC Treaty and the corresponding provisions of the ECSC and EAEC Treaties, appeals are limited to points of law. That limitation is also referred to in the first paragraph of Article 51 of the Protocol on the Statute of the Court of Justice of the EEC and the corresponding provisions of the ECSC and EAEC Protocols, which set out the grounds on which an appeal may be founded, namely lack of competence of the Court of First Instance, a breach of procedure before it which adversely affects the interests of the appellant and the infringement of Community law by the Court of First Instance.

10 It follows that the present appeal may be based only on grounds relating to the infringement by the Court of First Instance of rules of law, and may not involve any assessment of the facts. Consequently, the appeal is admissible only to the extent to which the Court of First Instance is accused, in the application, of having given judgment in breach of rules of law which it was required to safeguard (see the judgment of the Court of Justice in Case C-283/90 P Vidrányi v Commission [1991] ECR I-4339).

11 With respect to the ground of appeal alleging that the Court of First Instance was incorrect to state that the considerable time spent by the appellant' s son away from barracks was a matter of his own choosing, it need merely be pointed out that that statement constitutes an entirely factual assessment and does not in itself involve the application of any rule of law.

12 Mr Schwedler' s second ground of appeal must therefore be declared inadmissible.

13 However, in so far as the ground of appeal alleging that an unacceptable limitation was placed on the concept of actual maintenance as a result of the definition adopted by the Court of First Instance of the term dependent child used in Article 2(2) of Annex VII to the Staff Regulations is concerned with the interpretation of that provision, the substance thereof must be considered.

Substance

I - The alleged misinterpretation of Article 2(2) of Annex VII to the Staff Regulations

14 It must be stated at the outset that the social objective pursued by the tax abatement at issue (see the judgment of the Court of Justice in Sorasio, supra) requires account to be taken, in the application thereof, only of expenses justified by an existing and established need connected with the existence of a child and the actual maintenance of the child.

15 In considering the merits of the present ground of appeal, it must be borne in mind that in Sorasio the Court of Justice held that where both the child' s parents are Community officials, the tax abatement may be granted only to the official whose basic salary is higher since a child cannot be deemed to be actually maintained by each of his parents individually (paragraphs 16 and 17).

16 However, the Court of Justice did not give its views in that judgment on the situation where an official actually provides for only part of the child' s basic needs and that judgment cannot therefore be construed as meaning that the advantage in question may not be granted to such an official.

17 It follows that the Court of First Instance, relying on the judgment in Sorasio, was wrong to hold, in the final part of paragraph 18 of the judgment appealed against, that the tax abatement for a dependent child may be granted only to "the person who assumes actual responsibility for all the child' s basic needs" and that "a child cannot be considered to be actually maintained within the meaning of Article 2(2) of Annex VII to the Staff Regulations by a number of different persons or organizations at the same time and that he cannot therefore be regarded as being simultaneously dependent on all of them" (paragraph 19).

18 On the other hand, the Court of First Instance was correct in saying in paragraph 18 of its judgment that the tax abatement for a dependent child is "granted for social reasons connected with the existence of the child and the cost of actually maintaining him".

19 In the circumstances of the present case, the Court of First Instance found, at paragraph 20 of its judgment, that the German army provides for the needs of young people who are called on to do military service; in particular it supplies board and lodging, medical care and expenses, kit and uniform, takes care of their laundry and pays them almost DM 300 each month to cover their personal needs.

20 The Court of First Instance also concluded, at paragraph 21 of the judgment, that in those circumstances the applicant could not claim that he, simultaneously, actually maintained his son.

21 It must be stated that those grounds of the judgment appealed against, as set out in the three preceding paragraphs hereof, are in conformity with both the letter and the spirit of Article 2(2) of the Staff Regulations and with the abovementioned judgment in Sorasio.

22 Where the obligation to support the costs of maintaining a child no longer falls on the potential beneficiary of the tax abatement but falls entirely on another subject of law, in this case the German army, the abatement in question becomes devoid of purpose.

23 It follows that in finding, in the judgment under appeal, that the child of the appellant could not be regarded as dependent on him for the period of his military service, since his maintenance was provided for entirely by the German army, the Court of First Instance did not infringe Community law.

24 As regards the argument which the appellant bases on internal circulars, it need merely be stated that, whilst confirming that even partial maintenance of a child may give rise to entitlement to the allowance in question, the view taken in them is that the allowance is not payable where the child is fully maintained by the national military authorities.

25 It follows from the foregoing that the first ground of appeal is unfounded.

II - The ground of appeal alleging that the interpretation of Article 2(3), (4) and (5) of Annex VII to the Staff Regulations is irrelevant

26 It must be pointed out that whilst it is true that there is no exact parallel between the dependent-child allowance and the tax abatement at issue, the fact nevertheless remains that, pursuing as they do the same social objective and reflecting the same concern, the provisions relating to the dependent-child allowance may be taken into account to corroborate the interpretation of the provisions relating to tax abatements for dependent children.

27 In those circumstances, the Court of First Instance was entitled to have recourse to the reasoning by analogy developed in paragraphs 22 and 23 of its judgment.

28 It follows that the third ground of appeal is likewise unfounded.

29 Since none of Mr Schwedler' s grounds of appeal has been upheld, the appeal must be dismissed in its entirety.

Decision on costs

Costs

30 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Article 70 of those rules provides that in proceedings brought by servants of Communities the institutions are to bear their own costs. However, by virtue of Article 122 of those rules, Article 70 is not to apply to appeals brought by officials or other servants of the institutions. Since Mr Schwedler' s appeal has been unsuccessful he must be ordered to pay the costs.

Operative part

On those grounds,

THE COURT

hereby:

1. Dismisses the appeal;

2. Orders the appellant to pay the costs.

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