C-260/86

Mr President, 6. The Kingdom of Belgium has not Members of the Court, formally submitted any conclusions. It has merely referred to a draft law which was 1. Case 260/86 is an action brought by submitted to the Chamber of Represen­ the Commission for a declaration that the tatives on 4 May 1987 for the purpose of Kingdom of Belgium has failed to fulfil bringing the breaches of its obligations to an its obligations as regards certain rules end. The following passage is to be found at governing the levying of a Belgian tax called page 17 of the statement of the reasons for 'précompte immobilier' (tax at source on the draft law: income from immovable assets). 'Article 162 (6) of the Code des impôts sur 2. The tax on income from immovable les revenus ... is incompatible with Article 7 assets is calculated on the basis of the of the Treaty establishing the European cadastral income of the property to which it Economic Community, with the second relates. The tax is payable by the owner of paragraph of Article 13 and Article 14 of the property. the Protocol on the Privileges and Immunities of the European Communities 3. Reductions in the tax may be granted in and with Articles 7 (2) and 9 of Regulation certain circumstances depending on the (EEC) No 1612/68 of the Council of 15 social circumstances of the occupant of the October 1968 on freedom of movement for property. Such is the case, for example, workers within the Community. Since our where the occupant is a war invalid, a tax legislation may not include any discrimi­ handicapped person or the head of a family nation on grounds of nationality, this article comprising at least two children. is intended simply to repeal the provision in question'. 4. Article 162 (6) of the Belgian Code des impôts sur les revenus (Income Tax Code), 7. The Belgian Government therefore introduced in 1981, provides that the accepts the objections raised by the reductions in question may not be granted if Commission. However, the aforementioned a residence is occupied 'by a tenant who, draft law has not yet been approved by the either himself or on account of his spouse, is Belgian Parliament. exempt from the tax on natural persons by virtue of international conventions'. 8. In view of the common ground between the applicant and the defendant with regard 5. The Commission submits that by to the substance of the case, it might be bringing that provision into force the tempting to stop at this point and simply Kingdom of Belgium has failed to fulfil its propose that the Court should declare the obligations under Article 7 of the EEC defendant in breach of its obligations. Treaty and under the second paragraph of Article 13 and Article 14 of the Protocol 9. However, before formally submitting on the Privileges and Immunities of the that conclusion I feel compelled to raise European Communities (hereinafter referred some reservations with regard to some of to as 'the Protocol'). the Commission's objections.

'Moreover, although under the second paragraph of Article 13 of the Protocol on 11. However, the Commission confirmed at the Privileges and Immunities of the the hearing that Community officials having European Communities [an official of the Belgian nationality do not obtain the Communities] is exempt from national taxes reduction in the tax on income from on salaries, wages and emoluments paid by immovable assets either. The criterion for the Communities, he is liable on the other the application of the provision at issue is hand, under the first paragraph of the same not therefore the nationality of the persons article, to a tax for the benefit of the concerned but the fact that they are Communities on salaries, wages and emol­ Community officials. uments from which the host Member State, as a member of the Communities, benefits indirectly. The fact that he does not pay a tax on his salary to the national Treasury is 12. In those circumstances I do not therefore not a valid reason for differen­ consider it possible to accept the charge that tiating the case of the official and his family Article 7, nor, moreover, Regulation No from that of the migrant worker whose 1612/68 of the Council of 15 October 1968 income is liable to taxation by the State in on freedom of movement for workers which he resides' (paragraph 19 of the within the Community (Official Journal, decision). English Special Edition 1968 (II), p. 475), has been infringed. It follows from that regulation that a worker who is a national of another Member State must enjoy the 14. Community officials must therefore be same social and tax advantages as national treated in the same way as other migrant workers (Article 7 (2)) as well as the rights workers residing in the same country. The and benefits accorded to national workers latter must be put on the same footing as in matters of housing (Article 9 (1)). The national workers as regards social regulation merely specifies, as regards a advantages. particular field, the consequences arising from Article 7. 15. For their part Community officials who are nationals of the country in which they perform their duties must not suffer 13. Would it be possible, however, to rely discrimination in comparison with in this connection on the Court's judgment Community officials having a different in Case 152/82, Forcheri1?That judgment is nationality. Otherwise the uniform certainly not immediately applicable to this application of the rules which the Staff case since it concerns a typical example of Regulations of Officials of the European Communities are intended to ensure for all 1 — Judgment of 13 July 1983 in Case 152/82 Forcheri v the persons covered by them would be Belgian State [1983] ECR 2323. jeopardized. The Staff Regulations were

19. One can only share that point of view. 16. It may therefore be concluded on the Although the non-reduction in the tax on basis of that reasoning alone that the income from immovable assets certainly exemption from national taxes from which imposes a charge on the income of an Community officials benefit regardless of official, it does not, however, amount to a their nationality cannot constitute a valid 'national tax on salaries, wages and emol­ reason for refusing them certain advantages uments paid by the Communities' since the which are granted to other persons residing taxable amount is the cadastral income from in the same Member State. However, this the property. reasoning has the defect of taking a circuitous route by taking into consideration the principle of non-discrimination on 20. It is no less true that, according to grounds of nationality laid down in Article Article 162 (6) of the Belgian Code des 7 of the EEC Treaty in conjunction with the impôts sur les revenus, a Community official principle of equality of treatment of all who is a tenant of property is excluded from Community officials, whereas the provision benefiting from a reduction in the tax solely at issue contains no reference to nationality. because he is 'exempt from the tax on In fact it is possible to arrive at the same natural persons'. That exemption is there­ result by a more direct route by referring to fore the legal reason for refusing to grant a the second paragraph of Article 13 of the reduction in the tax on income from Protocol. That is what I would now like to immovable assets. demonstrate.

Such taxation would be contrary to the III — Article 14 of the Protocol exemption provided by Article 11 since the Community salary, which is exempt from all 25. Article 14 of the Protocol provides in taxation, would even in this case constitute essence that, in the application of income the legal basis of the taxation in question'. tax, wealth tax and death duties, officials of the Communities are to be considered as having maintained their domicile for tax purposes in their country of origin. In the operative part of the judgment the Court ruled that the ECSC Protocol 26. As far as this provision is concerned, it 'prohibits the Member States from imposing is remarkable that the Commission on an official of the Community any complains solely of the fact that officials do taxation whatsoever which is based in whole not benefit from any reductions in the tax or in part on the payment of the salary to on income from immovable assets; it that official by the Community'. therefore implicitly accepts that in principle they may be liable to the tax (if they are property owners) or that the tax may be levied on them indirectly (if they are tenants). It may therefore be assumed that 22. In the case before the Court the in the Commission's view the tax on income situation is not precisely the same because from immovable assets does not fall within the salary paid by the Communities is not one of the categories of taxes referred to in taken into account, as it was in the Humblet Article 14. If that is so, there appears to be case, in order to justify a higher rate of no reason why the refusal to grant a taxation on the other income of officials. In reduction would constitute an infringement this case, the charge (that is to say the of that provision. difference between the reduced rate and the normal rate of tax) is not brought about by the level of salary in question but solely by 27. It follows from the foregoing obser­ the fact that the salary is exempt from vations that it is necessary to declare that national taxes. the Kingdom of Belgium has failed to fulfil its obligations under the second paragraph of Article 13 of the Protocol.

32 Even though all the Commission's complaints should not , in my view , be accepted , nevertheless the application should be granted in substance . It has , in fact, not been contested by Belgium. Consequently , it is justified to order the defendant Member State to bear the costs.