Commissie verzoekt Duitsland om regelgeving te wijzigen inzake belastingvrijstellingen op schoolgeld en de bouw van onroerend goed

The European Commission has decided to send Germany two formal requests to eliminate discrimination. 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. The Commission considers that this exclusion, which affects cross-frontier workers in particular, is contrary to the Treaty provisions on the free movement of persons. 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. Both requests take the form of 'reasoned opinions' which is the second stage of the infringement procedure provided for in Article 226 of the Treaty. If there is no satisfactory response to the reasoned opinions within two months the Commission may refer the matter to the European Court of Justice.

Housing grants are available under German rules ("Eigenheimzulagegesetz") 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 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 Commission considers that the territorial limitation of the grant violates EC Treaty rules concerning people's rights to reside, work and establish themselves in other EU Member States (Articles 18, 39 and 43).

Tax deductibility of school fees

Under the German Income Tax Act, 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. 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.

Furthermore, parents who have moved abroad while remaining subject to unlimited tax liability in Germany and who for linguistic reasons have no choice but to send their children to a foreign school are hindered in their right of free movement. The Commission considers these rules to be in violation of EC Treaty rules concerning people's rights to reside, work and establish themselves in other EU Member States and concerning schools' right to establish themselves and provide services in another Member State (Articles 18, 39, 43 and 49).

The latest information on infringement proceedings against the Member States is available on the following site:

http://europa.eu.int/comm/secretariat_general/sgb/droit_com/index_en.htm