CJEU – Recent Developments in Direct Taxation 2015

I. S. 52Introduction

Since the tax year 2013 a special provision concerning a supplementary tax on pension income has been applied in Finland. According to the provision, pension income is subject to a supplementary tax of 6 % in addition to the regular progressive income tax that applies to all earned income. The supplementary tax concerns only the amount of pension income in excess of EUR 45,000 after the pension income deduction. The tax on pension income thus may be higher than the tax that would apply to the same amount of employment income.

Taxpayer C considers that the supplementary tax falls within EU law and is in conflict with the provisions of Directive 2000/78/EC concerning equal treatment in employment and occupation (“the Directive”) and the provision concerning the prohibition of discrimination on grounds of age laid down in Article 21(1) of the Charter of Fundamental Rights of the European Union (“the Charter”). Based on the taxpayer’s application, the Supreme Administrative Court of Finland (Korkein hallinto-oikeus, KHO) decided to refer the case to the CJEU under Article 267 of the TFEU to ask whether the supplementary tax falls under EU Law and if so, whether it is in c...