Brussels, 09/07/2003 (Agence Europe) - The European Commission has decided to take Denmark before the Court of Justice as it considers the Danish tax system is discriminatory against the pension funds of the other Member States. According to Danish law, employees and employers can deduct from their taxes payments made to complementary retirement funds, but only if such funds are established in Denmark. The Commission considers this provision is discriminatory and runs counter to the rules on the free provision of services and the free movement of capital.
Several similar procedures are under way. In February 2003, formal requests were issued to France, Italy, Spain, Belgium and Portugal. The Commission has just opened two procedures against the United Kingdom and Ireland.
These decisions follow the line defined by the Commission in its Communication of April 2001 on retirement taxation: not to adopt new legislation but to strictly apply the internal market rules and develop jurisprudence.
In a ruling of 26 June on the Swedish case Skandia, the Court confirmed that the tax regime must be the same for complementary pensions, whether these are with a national insurance fund or with pension institutions outside Denmark in another Member State (see EUROPE of 4 July, p.18). The Court thus confirmed the Danner case law (October 2002), and that of Jessica Safir (April 1998) and Wielockx (August 1995), the Commission recalls in a press release.