C-102/76

In Case 102/76

Reference to the Court under Article 177 of the EEC Treaty by the Hoge Raad of the Netherlands for a preliminary ruling in the action pending before that court between

H.O.A.G.M. PERENBOOM, Nijmegen,

and

INSPECTEUR DER DIRECTE BELASTINGEN (Inspector of Direct Taxes) of Nijmegen,

on the interpretation of certain provisions of Regulations Nos 3 and 1408/71 of the Council in relation to the obligation, imposed on an employed person in the Member State in which he resides, to pay contributions on wages earned in another Member State which are subject, in that State, to assessment to social security contributions,

JUDGMENT

Facts

The facts, the procedure and the written insurance' scheme. As a result of his observations submitted under Article 20 membership of the scheme, the of the Protocol on the Statute of the Netherlands authorities assessed the Court of Justice of the EEC may be wages received by Mr Perenboom in summarized as follows: Germany to the social security contributions laid down by the general insurance scheme. For this purpose, I — Facts and written procedure those authorities assessed Mr Perenboom's earnings for contributions 1. Mr Perenboom, a Netherlands corresponding to the 217 days out of 360 national, resident in the Netherlands, during which he remained in the worked for 143 days in the Federal Netherlands and did not work in Republic of Germany in 1972, after Germany. having obtained his certificate of advanced secondary and general Mr Perenboom appealed against that education. During that year he did not assessment.

engage in any employment in the State of residence. His complaint having been dismissed, Mr Perenboom brought an action before the During the said period of work he was Gerechtshof, Arnhem. In support of this subject to German income tax and social action, which the Gerechtshof dismissed security contributions in respect of wages by judgment of 31. 1. 1975, he argued in received in that State. He was not, particular: however, subject to any tax in the — that, since he did not receive any Netherlands. earnings in the Netherlands in 1972, he could not be required to pay In 1972, principally on account of his contributions in that country in age (17) and his residence in the respect of non-existent earnings; Netherlands, he fulfilled the conditions — that, on the same portion of his for affiliation to the Netherlands 'general income — namely 4 015 guilders,

— as regards payment of the contested 2. How is the admissibility to be contributions, there are no rules adjudged if the employment in the providing for an exception where and other Member State occurs after 1 in so far as the income is subject to October 1972, that is to say after the corresponding contributions in entry into force of Article 13 of another State. Regulation No 1408/71 of the Council of the European The case having come before the Hoge Communities?' Raad, the latter referred Article 12 of Regulation No 3 and Article 13 of In its order making the reference, the Regulation No 1408/71 for interpretation Hoge Raad stated: by the Court, in order to ascertain the — that, inter alia, the objections put following: forward by the person concerned in '1. If a worker resides for a whole the present case do not raise the calendar year in one Member State question whether the social insurance (hereinafter referred to as the "State legislation of the Netherlands and of of residence") and for a part of that the Federal Republic of Germany can year works in another Member State be simultaneously applicable but with the result that in that part of the rather the question whether, in the year he is subject to the social circumstances of the case, the person security legislation of the other concerned can be obliged to pay the Member State and is not an insured contested contributions in the

person under the legislation of the Netherlands; State of residence in the same part of — that the employment undertaken by the year but for the remaining the person concerned in the Federal portion of the year is subject to the Republic of Germany was carried out legislation of the State of residence, partly before and partly after 1 does Article 12 of Regulation No 3 of October 1972, the date on which the Council of the European Regulation No 3 of the Council was Economic Community, whether or replaced by Regulation No 1408/71 not in conjunction with other rules of of the Council. Community law, permit the wages earned by the worker in the other 2. The Commission of the European Member State to be taken into Communities, represented by its Legal account in the State of residence for Adviser, Norbert Koch, acting as Agent,

The Commission states, first, that in which the person concerned is employed, in so far as the said legislation replying to the national court a distinction should be made between the requires him to contribute to the financing of a social security institution question of the legislation applicable and that of the basis of assessment for which will not give him additional contributions to be used under that advantages in respect of the same risk and over the same period. Thus the legislation. exclusive nature of the legislation (1) In connexion with the first point, applicable is given limited recognition in the Commission examines the relevant Regulation No 3. systems established by Regulation No 3 and by Regulation No 1408/71. (b) As regards the system established by (a) As regards the system established by Article 13 et seq. of Regulation No Regulation No 3, it notes that Article 12 1408/71, it corresponds to the system thereof lays down the following general contained in Regulation No 3 to a large principle: extent. Article 13 (1) expressly recognizes that the legislation applicable is of an '… wage-earners or assimilated workers exclusive nature, in that it provides that employed in the territory of one Member 'A worker … shall be subject to the State shall be subject to the legislation of legislation of a single Member State that State even if they reside in the only'. However, there is an exception to territory of another Member State …' that rule in Article 15 (3) of the regulation which provides that in respect Although it is true that the of invalidity, old-age and death abovementioned principle is only (pensions), the person concerned may applicable 'save as otherwise provided' in join the voluntary or optional continued Article 13 to 15 of the regulation, insurance scheme of a Member State, nevertheless of all those provisions, the even if he is compulsorily subject to the only one that could possibly apply is legislation of another Member State, to Article 15, which empowers the Member the extent that such overlapping is States to admitted by the national legislation.

Therefore the difference to be found pension insurance), which compulsorily between the two regulations is not very applies to 'any employed person', great on this point. It remains evident in establishes a direct link between the the case where the social security obligation to be insured, and thus to pay legislation of the second State provides contributions, and the income received, for the payment of a contribution which together with its source. However, in in effect affords additional advantages determining the contribution, there is no and applies to the same risks over the direct connexion with the period in same period: in such a case overlapping respect of which the contribution is of the two systems is authorized by payable. Regulation No 3, whereas it is prohibited by Regulation No 1408/71. After noting that neither Regulation No 3 nor Regulation No 1408/71 nor any of The Commission concludes that in the the implementing regulations contains present case German social security specific provisions concerning the basis of assessment for contributions, the legislation should be applied to the person concerned for the period during Commission observes that according to which he worked in the Federal Republic the general rule set out in Articles 13 et of Germany, but that no provision of seq. of Regulation No 1408/71, a worker Community law prevents the legislation within the meaning of the regulation of the Netherlands from being applied to who works in the territory of a Member State other than that where he resides is him for the remainder of 1972. subject only to the legislation of one (2) On the second point, concerning State as regards compulsory insurance, the basis of assessment for contributions, namely the first. the Commission examines, first, the This rule of conflict of laws does not national social security schemes at issue mean that where the person concerned is

JUDGMENT OF 5. 5. 1977 - CASE 102/76

Germany, they nevertheless took into 2. The fact that social security consideration, in connexion with the said legislation, applied to a given scheme, matters which, by virtue of the situation in accordance with those rules on conflict of laws mentioned provisions, contains a provision by above, depended exclusively on the laws virtue of which account must be of another Member State. That taken of factors which, according to conclusion is wholly valid only as regards the aforesaid provisions, relate Regulation No 1408/71. As regards exclusively to the law of another Articles 12 et seq. of Regulation No 3, Member State, must be considered as according to the case-law of the Court incompatible with those provisions. two national legal systems may not be 3. Neither Articles 12 to 14 inclusive of applied simultaneously in the case of a Regulation No 3 of the Council of contribution to a social security the European Economic Community, institution which does not afford nor Articles 13 to 17 inclusive of additional advantages. However, since in Regulation No 1408/71 of the this case the Netherlands legislation is Council of the European the 'second' legislation, and since there is Communities authorize any Member no direct connexion between the State other than that in whose contribution and the rights resulting territory a worker is employed to from it, the principle of the exclusive apply its social insurance scheme application of the legislation of the State established by law to that person if of employment is equally valid for the result is that the worker or his Regulation No 3. employer have to bear increased charges which are not accompanied In the light of these observations, the by additional social security Commission suggests that the questions advantages.' referred should be answered as follows: '1. The provisions concerning the legislation to be applied, contained in III — Oral procedure Articles 12 to 15 inclusive of Regulation No 3 of the Council of The Commission of the European the European Economic Community Communities submitted its oral and in Articles 13 to 17 inclusive of observations at the hearing on 9 March Regulation No 1408/71 of the 1977.

4 Because he was subject to that scheme, the worker paid taxes under the legislation of the State of residence by way of contributions on the salary received in the State in which he was employed, in proportion to the part of the year during which he did not work in that State.

5 The person concerned contested the legality of that taxation, arguing in particular that since he was taxed in the State in which he was employed, on the basis of the salary which he received there, he cannot also be required to pay contributions in respect of a part of that income in the State of residence and thus be subjected to double taxation, which is contrary to the general principles of law and unacceptable from the point of view of Community law.

6 The competent national authority has observed, on the contrary, that for the purposes of the application of the Netherlands general insurance scheme it does not matter, in determining the income liable to tax under that scheme, whether that income arose in the Netherlands or in another State.

7 By the first question, the national court asks the Court to state whether, in the case of a worker who has been employed during a part of the year in a Member State other than the State of residence and has been subject, during that period, to the social legislation of the State of employment, while being subject to the social legislation of the State of residence for the remainder of the year, Article 12 of Regulation No 3 permits the salary received by that worker and taxed in the State in which he was employed, in accordance with the social legislation applicable there, also to be taxed by way of contributions in the State of residence in proportion to the part of the year during which

12 Moreover, it is perfectly clear that in the situation envisaged by the national court the worker was not subject to the general insurance legislation of the State of residence in respect of the period during which he worked in the other Member State and by virtue of which he was subject to the social legislation of that State.

13 The fact that a worker is required to pay, in respect of the same earned income, social charges arising under the application of several national legislations, although he can be an insured person only in respect of one of those legislations, involves the worker in payment of contributions twice over, contrary to the provisions of Regulation No 3 and of Regulation No 1408/71 cited above.

14 Accordingly, since the social legislation of the Member State of residence is not applicable in respect of periods of work performed in another Member State, the remuneration received by a worker for that work does not constitute a basis of assessment for contributions levied, even partially, under that legislation and is exempt, therefore, from the social charges arising from its application.

PERENBOOM v INSPECTEUR DER DIRECTE BELASTINGEN OF NIJMEGEN

15 For these reasons, the answer to the questions referred is that both Article 12 of Regulation No 3 and Article 13 of Regulation No 1408/71 prevent the State of residence from requiring payment, under its social legislation, of contributions on the remuneration received by a worker in respect of work performed in another Member State and therefore subject to the social legislation of that State.

Both Article 12 of Regulation No 3 and Article 13 of Regulation No 1408/71 prevent the State of residence from requiring payment, under its social legislation, of contributions on the remuneration received by a worker in respect of work performed in another Member State and therefore subject to the social legislation of that State.

Kutscher Donner Pescatore Mertens de Wilmars Sørensen

Mackenzie Stuart O'Keeffe Bosco Touffait

A. Van Houtte H. Kutscher

Registrar President