Tom O’Shea on the Ettwein case (C-425/11): ECJ Determines Applicability of German Tax Advantages for Swiss Residents

Tom O’Shea has just published a relevant article on the ECJ Judgment of 28 February 2013, Ettwein, C-425/11: “ECJ Determines Applicability of German Tax Advantages for Swiss Residents”, Tax Notes International, 72(3) 2013, p. 257.

“The European Court of Justice determined that German nationals who had moved their residence to Sw itzerland were still entitled to some tax advantages [splitting] granted to German residents. The Court’s judgment inEttwein(C-425/11) clarified the EU-Swiss agreement of June 21, 1999, and provided helpful guidance on the meaning and rights of ‘‘self-employed frontier workers. ’’

According to Tom, “The judgment raises a number of significant EU law points worth further analysis. First, theEttweincircum- stances provide an example of an origin member state situation in which a tax rule of the origin member state hinders an origin member state national from ex- ercising free movement rights granted under the agreement of 1999. Second, it is clear from the Ettwein judgment that nationals of the origin member state may claim the rights granted under the agreement of 1999 against its own state of origin. Third, the agreement of 1999 puts in place a right of residence for EU nation- als to reside in Switzerland and vice versa. Last, the judgment demonstrates the consistency of the ECJ in determining comparability of residents and nonresi- dents in situations concerning tax advantages involving personal and family circumstances such as the ‘‘income-splitting’’ tax advantage at issue in this case. The Court applied its Schumacker line of cases in the Ettwein judgment in line with its internal market jurisprudence.”

In Tom’s view, “the judgment in Ettwein indicates that the Court’s earlier jurisprudence in Werner ( C-112/91), concerning residence in the Netherlands while working in Germany, would have a different outcome since the introduction of EU citizenship rights.”

Many thanks for yor interesting coments and your co-operation with the blog, dear Tom. We encourage the reading of the full article.

Pedro M. Herrera

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