Brussels, 09/01/2004 (Agence Europe) - The European Commission has sent Germany two formal requests to eliminate discriminatory measures that run contrary to the Treaty provisions on the free movement of persons and the right of schools to set up and provide services in another Member State.
The first concerns the rule whereby houses outside Germany are excluded from the scope of the grant that is allowed to persons subject to unlimited German tax liability for the construction or acquisition of personal accommodation. Housing grants are available under German rules for the construction or acquisition of personal accommodation subject to two main conditions: the applicant must be subject to unlimited German tax liability and the house must be situated in Germany. Normally only persons resident in Germany are subject to German unlimited tax liability, but by virtue of double taxation conventions and other rules of international law, non-resident persons may also sometimes have that status. The Commission notes that the cumulative application of the two criteria means the exclusion from the benefit of the grant of persons, such as frontier workers, who are subject to unlimited German tax liability but purchase properties outside Germany.
The second request concerns the fact that fees paid to foreign schools cannot be deducted from German income tax; whereas fees paid to German schools are tax deductible. Under German law, 30% of the fees paid to certain German schools may be deducted from the income tax base as special expenses, provided that the Länder recognise the schools concerned as providing public education. Since no foreign schools are subject to the jurisdiction of German authorities, fees paid to a foreign school may never be deducted; this applies even to fees paid for tuition delivered in a German school situated outside Germany or in a European school. This restriction therefore places the provision of services by foreign schools at a disadvantage. The Commission notes that parents who would like their children to be educated in another Member State are worse off than those who send their children to a German school. Germany has two months to respond to the Reasoned Opinions.