Personal and family tax advantages granted to non-residents: the ECJ takes a step further

A comment of CJEU, 10 March 2022, Commission v. Belgium, C-60/21

Abstract

Member-States typically reserve certain family and personal tax allowances to residents, given that they (i.e., the States of residence) are deemed better placed than any other State to consider the personal and family situation of any taxpayer. Non-residents, being excluded from these tax allowances, risk being put in an unfavourable position. The article discusses the challenges faced by non-residents in the European Union regarding personal and family tax advantages, focusing on the disparities in tax systems that hinder mobility across Member States. It centres on the CJEU case law of Commission v. Belgium (C-60/21), in which the Court held that the Belgian deductibility of allowances, which was subject to certain conditions for non-residents of Belgium, violated the free movement of workers guaranteed by article 45 of the TFEU. The author examines previous CJEU case law, including Schumacker, Imfeld, and Renneberg, to illustrate how the Court has interpreted similar scenarios and emphasised the need for Member States to consider personal circumstances for non-residents taxation as well.