CJEU – Recent Developments in Direct Taxation 2023

1. RF v. Finanzamt G (C-15/22)

The case, which was already discussed at last year’s CJEU conference after the referral by the Bundesfinanzhof, has in the meantime been decided by the Court of Justice. In contrast to Advocate General Medina, the CJEU found that there was no violation of Union law.

1.1. Facts of the Case

The case concerns a project manager who was employed by a development assistance association with registered office in Germany. Although the project manager worked in Africa, her place of residence and centre of interests was in Germany. The projects were funded by the Seventh and the Ninth European Development Fund (hereinafter jointly referred to as the EDFs, which in turn were funded directly by the Member States, which provided financial contributions to the EDFs. The salary paid by the association was subject to German income tax. By contrast, the S. 2salary would have been exempt from income tax under the so-called Auslandstätigkeitserlass (ATE, Decree on Employment Abroad) had it been paid for activities in connection with German assistance.

The Bundesfinanzhof considered the ATE in the present case not to violate Union law but had doubts on the matter. It saw no infr...