ECJ - Recent Developments in Direct Taxation 2012

S. 9Belgium: the Imfeld & Garcet case and the Levy case

S. 111. Imfeld and Garcet (C-303/12)

The question referred in Imfeld & Garcet (C-303/12) concerns the attribution of personal allowances to a married couple of which one of the partners earns all his income outside his home State and that income accounts for more than half of the family income.

1.1. Facts and legislation

Mr Imfeld, a German national residing in Belgium with his Belgian spouse Mrs Garcet and their two children, derived his entire income from activities as a self-employed person (lawyer) in a German fixed base (law office, hereinafter “FB”). Mrs Garcet earned income from an employment activity carried on in Belgium. The German income was the sole income of Mr Imfeld and accounted for more than half of the family income.

The double tax convention between Germany and Belgium (hereinafter “DTC”) provides that income derived by a Belgian resident from a liberal profession is taxable in the work State if the taxpayer has an FB in that State (Art. 14(1) DTC). It also provides that if income derived from German sources is taxable in Germany on the basis of the DTC (other than investment income), Belgium will exempt such income. This...