Background
A had worked for the European Investment Bank since 1995, when he moved from Austria to Luxembourg for his job. After marrying in 2010, he moved to Germany to live with his spouse while continuing to use his Luxembourg flat.
In 2013, A received a EUR 300,000 gift from his brother in Austria. German tax authorities assessed EUR 56,000 in gift tax, treating A as German-resident and therefore subject to unlimited German gift-tax liability. A argued that Article 13 of Protocol No 7 required Germany to treat him as maintaining his Austrian tax domicile. The German Federal Fiscal Court referred questions to the CJEU.
The Court’s Holding
The Court held that the first paragraph of Article 13 of Protocol No 7 applies to gift tax. Although the provision expressly mentions income tax, wealth tax and death duties, those are autonomous EU-law concepts rather than categories defined by national law. Gift tax shares essential features with income tax and death duties and must be included to preserve a coherent, predictable tax-residence rule for EU staff.
The Court further held that an EU official or servant who moved from the home Member State to enter EU service retains the tax domicile in that home State, even if the person later moves for personal reasons to a Member State other than the State of employment. Article 13 permits only one relevant tax domicile for the covered taxes: the domicile in the State of origin. A later personal move cannot change it while the person remains in EU service.
Key Takeaways
- Article 13 of Protocol No 7 covers gift tax as well as income tax, wealth tax and death duties.
- For those taxes, covered EU officials and servants retain their tax domicile in their Member State of origin.
- A subsequent personal relocation to another Member State does not create an additional tax domicile under Article 13.
Why It Matters
The ruling gives EU officials and servants a uniform tax-residence rule for gifts, preventing Member States from reaching different outcomes by classifying gift tax differently under domestic law. It also prevents a later personal move from shifting the applicable tax domicile away from the official’s home State.
For national tax authorities, the decision limits the ability to impose residence-based gift tax on covered EU staff merely because they live within the authority’s territory. The referring German court must now apply that interpretation to A’s challenge to the German assessment.