Brussels, 28/04/2009 (Agence Europe) - In a judgment delivered on 23 April (case C-544/07), the Court of Justice of the European Communities ruled that Community law precludes refusal of income tax reductions by the amount of health insurance contributions paid in another member state.
After living in Germany, where he was employed, Mr Rüffler moved to Poland and has been permanently resident there since 2006. At the time the dispute arose, Rüffler's only income came from two pensions paid in Germany: an invalidity pension, taxed in Germany, and an occupational pension paid by the Volkswagen company, which was taxed in Poland. During 2006, Rüffler applied to the Polish tax authorities for the income tax to which he is liable in Poland on his occupational pension paid in Germany top be reduced by the amount he paid in health insurance contributions in Germany. His request was rejected on the grounds that only health insurance contributions paid to a Polish insurance institution may be deducted from income tax, so Rüffler appealed to the Wojewódzki S¹d Adminstracyjny we Wroc³awiu (Regional Administrative Court, Wroc³aw), which sought clarification from the Court on whether the limitation of the right to a reduction of tax was compatible with Community law.
The Court's response was that rules such as those provided for under Polish law introduce a difference in the treatment of resident taxpayers depending on whether health insurance contributions that may be deducted from the amount of income tax due in Poland have or have not been paid under a national compulsory health insurance scheme. Under those rules, only taxpayers whose health insurance contributions are paid in the member state of taxation benefit from the right to a reduction in income tax. The Court took the view that such a limitation constitutes a restriction on the freedom of movement and residence in the territory of the member states, which is not objectively justified. (H.D./transl.rt)