Krzysztof Filipiak v Dyrektor Izby Skarbowej w Poznaniu.

• Jurisdiction: European Union
• Celex Number: 62008CJ0314
• ECLI: ECLI:EU:C:2009:719
• Date: 19 November 2009
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-314/08

Case C-314/08

Krzysztof Filipiak

v

Dyrektor Izby Skarbowej w Poznaniu

(Reference for a preliminary ruling from the Wojewódzki Sąd Administracyjny w Poznaniu)

(Income tax legislation – Right to deduct social security contributions from the basis of assessment for tax – Right to a tax reduction on the basis of health insurance contributions paid – Refusal where contributions are paid in a Member State other than the State of taxation – Whether compatible with Articles 43 EC and 49 EC – Judgment of the national constitutional court – Unconstitutionality of provisions of national law – Deferral of the date on which those provisions are to lose their binding force – Primacy of Community law – Implications for the national court)

Summary of the Judgment

1. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Restrictions – Tax legislation – Income tax

(Arts 43 EC and 49 EC)

2. Community law – Primacy – Contrary national law – Existing rules automatically inapplicable

1. Articles 43 EC and 49 EC preclude national legislation under which the possibility for a resident taxpayer to obtain, first, a deduction from the basis of assessment in the amount of social security contributions paid in the tax year and, second, a reduction of the income tax which he is liable to pay by the amount of health insurance contributions paid in that period, exists solely when those contributions are paid in the Member State of taxation, while such advantages are refused in the case where those contributions are paid in another Member State, even though those contributions were not deducted in that other Member State.

Such legislation introduces a difference in the treatment of resident taxpayers. Any taxpayer who is resident in the Member State of taxation but pursues his economic activity in another Member State in which he is subject to compulsory social insurance and health insurance cannot deduct the amount of the contributions which he pays from his basis of assessment or to reduce the tax payable in the Member State of taxation by the amount of those contributions, and is therefore less favourably treated than any other taxpayer who is resident in that State but who restricts his economic activity to within the borders of that State and pays his compulsory social security and health insurance contributions to the competent public authority of that State. With regard to the taxation of their income in the Member State of taxation, however, resident taxpayers are not in objectively different situations capable of justifying such a difference in treatment according to the place in which contributions are paid, since they are subject to an unlimited tax liability in that Member State. Thus, the taxation of their income in that Member State should be carried out in accordance with the same principles and, consequently, on the basis of the same tax advantages. In those circumstances, the refusal to grant to the resident taxpayer the tax advantages in question may deter that taxpayer from taking advantage of the freedom of establishment and freedom to provide services under Articles 43 EC and 49 EC, and amounts to a restriction on those freedoms.

(see paras 66-71, 74, operative part 1)

2. To the extent that Community law prevails over provisions of national law, the primacy of Community law obliges the national court to apply Community law and to refuse to apply conflicting provisions of national law, irrespective of the judgment of the national constitutional court which has deferred the date on which those provisions, held to be unconstitutional, are to lose their binding force.

(see para. 85, operative part 2)

JUDGMENT OF THE COURT (Third Chamber)

19 November 2009 (*)

(Income tax legislation – Right to deduct social security contributions from the basis of assessment for tax – Right to a tax reduction on the basis of health insurance contributions paid – Refusal where contributions are paid in a Member State other than the State of taxation – Whether compatible with Articles 43 EC and 49 EC – Judgment of the national constitutional court – Unconstitutionality of provisions of national law – Deferral of the date on which those provisions are to lose their binding force – Primacy of Community law – Implications for the national court)

In Case C‑314/08,

REFERENCE for a preliminary ruling under Article 234 EC by the Wojewódzki Sąd Administracyjny w Poznaniu (Poland), made by decision of 30 May 2008, received at the Court on 14 July 2008, in the proceedings

Krzysztof Filipiak

v

Dyrektor Izby Skarbowej w Poznaniu,

THE COURT (Third Chamber),

composed of J.N. Cunha Rodrigues, President of the Second Chamber, acting for the President of the Third Chamber, A. Rosas (Rapporteur) and A. Ó Caoimh, Judges,

Advocate General: M. Poiares Maduro,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– the Polish Government, by M. Dowgielewicz, acting as Agent,

– the Commission of the European Communities, by R. Lyal and K. Herrmann, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 This reference for a preliminary ruling relates to the interpretation of Articles 43 EC and 49 EC.

2 The reference has been made in the context of proceedings between Mr Filipiak, a Polish national who is subject to unlimited tax liability in Poland, and the Dyrektor Izby Skarbowej w Poznaniu (Director of the Poznań Tax Chamber) (‘the Dyrektor’) concerning the refusal of the Polish tax authorities to grant Mr Filipiak entitlement to tax advantages in respect of the payment of social security and health insurance contributions in the tax year, in the case where the contributions were paid in a Member State other than the State of taxation, even though such tax advantages are granted to taxpayers whose contributions are paid in the Member State of taxation.

National law

3 Article 2 of the Polish Constitution provides:

‘The Republic of Poland is a democratic State subject to the rule of law and implementing the principles of social justice’.

4 Under Article 8 of the Polish Constitution:

‘1. The Constitution is the supreme law of the Republic of Poland.

2. The provisions of the Constitution shall apply directly, unless the Constitution provides otherwise’.

5 Article 32 of the Polish Constitution provides:

‘1. All persons are equal before the law. All persons shall have the right to equal treatment by public authorities.

2. No one shall be discriminated against in political, social or economic life for any reason whatsoever.’

6 Article 91 of the Polish Constitution states:

‘1. After publication thereof in the Journal of Laws of the Republic of Poland (Dziennik Ustaw), a ratified international agreement shall constitute part of the domestic legal order and shall be directly applicable, unless its application depends on the enactment of a statute.

2. An international agreement ratified upon prior consent granted by statute shall have precedence over that statute if such an agreement cannot be reconciled with the provisions of that statute.

3. If an agreement, ratified by the Republic of Poland, establishing an international organisation so provides, the laws established by that organisation shall be applied directly and have precedence in the event of a conflict of laws’.

7 Under Article 188 of the Polish Constitution:

‘The Trybunał Konstytucyjny [Polish Constitutional Court] shall adjudicate on the following matters:

(1) the conformity of statutes and international agreements with the Constitution;

(2) the conformity of a statute with ratified international agreements whose ratification required prior consent granted by statute;

(3) the conformity of legal provisions issued by central State authorities with the Constitution, ratified international agreements and statutes;

(4) the conformity with the Constitution of the purposes or activities of political parties;

(5) complaints concerning constitutional infringements, as specified in Article 79(1)’.

8 Paragraphs 1 to 4 of Article 190 of the Polish Constitution are worded as follows:

‘1. Judgments of the Constitutional Court shall be of universally binding application and shall be final.

…

3. A judgment of the Constitutional Court shall take effect from the day of its publication; however, the Constitutional Court may specify another date for the end of the binding force of a normative act. Such time period may not exceed 18 months in the case of a statute or 12 months in the case of any other normative act. …

4. A judgment of the Constitutional Court on the non-conformity with the Constitution, an international agreement or statute, of a normative act on the basis of which a legally effective judgment of a court, a final administrative decision or settlement of other matters has been issued, shall constitute a basis for reopening proceedings, or for quashing the decision or other settlement in a manner and in accordance with principles specified in provisions applicable to the given proceedings.’

9 Article 3(1) of the Law of 26 July 1991 on income tax payable by natural persons (ustawa z dnia 26 lipca 1991 r. o podatku dochodowym od osób fizycznych, Dz. U of 2000, No 14, heading 176; ‘the Law on income tax’), which sets out the general rule of unlimited tax liability, provides:

‘Natural persons who are resident in the territory of the Republic of Poland shall be liable to tax on all of their income, wherever it arises …’.

10 Article 26(1)(2) of that Law provides:

‘Without prejudice to Article 24(3), Articles 29 to 30c and Article 30e, the basis of assessment shall be income determined in accordance with Article 9, Article 24(1), (2), (4), (4a) to (4e) and (6), or with Article 24b(1) and (2), or with Article 25, after...