User:Kaihsu/IMlawB4

European internal market.

Module B: Equal treatment and non-discrimination.

Chapter 4: Non-discrimination claims in context – citizenship and fiscal sovereignty.

Citizens’ rights – Introduction
Article 18 TFEU prohibits discrimination on grounds of nationality within the scope of application of the Treaty. “[...] Every person holding the nationality of a Member State shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship. [...] Citizens of the Union shall enjoy the rights and be subject to the duties provided for in the Treaties. [...]”: Article 20 TFEU. “Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect”: Article 21(1) TFEU.

"Union citizenship is destined to be the fundamental status of nationals of the Member States, enabling those who find themselves in the same situation to enjoy the same treatment in law irrespective of their nationality, subject to such exceptions as are expressly provided for": Case C-184/99 Grzelczyk. TEU "does not require that citizens of the Union pursue a professional or trade activity, whether as an employed or self-employed person, in order to enjoy the rights provided in [TFEU] on citizenship of the Union": Case C-413/99 Baumbast. Contrast with Case C-60/00 Carpenter, where Article 56 (freedom to provide services), read in the light of the fundamental right to respect for family life, was engaged.

See the European Union Democracy Observatory on Citizenship.

EU citizenship and wholly internal situations
Any national of a Member State who has exercised his right to freedom of movement of workers and who has been employed in a Member State other than that of residence falls within the scope of Article 45 TFEU: Case C-152/03 Ritter-Coulais; likewise mere residence or property owning establishes link to EU law: Case C-212/05 Hartmann, Case C-527/06 Renneberg. Reverse discrimination of own nationals is outside the scope of EU law: Case C-212/06 Government of the French Community and Walloon Government.

Article 20 TFEU precludes national measures which have the effect of depriving Union citizens of the genuine enjoyment of the substance of the rights conferred on them by that status: Case C-34/09 Ruiz Zambrano. Distinguish this from Case C-434/09 McCarthy: A Union citizen who is a national of more than one Member State does not mean that she has made use of her right of freedom of movement; a risk of deprivation or of any impediment to exercising her rights must be shown.

A Member State can refuse to allow a third country national to reside on its territory, where that third country national wishes to reside with a member of his family who is a citizen of the Union residing in the Member State of which he has nationality, who has never exercised his right to freedom of movement, provided that such refusal does not lead, for the Union citizen concerned, to the denial of the genuine enjoyment of the substance of the rights conferred by virtue of his status as a citizen of the Union: Case C-256/11 Dereci. Also see Case C-86/12 Alokpa, Joined Cases C-356/11 and C-357/11 O, S and L.

Acquisition and loss of Union citizenship
Once a Member State confers its nationality on an individual, other Member States cannot put that grant into question: Case C-369/90 Micheletti. The same holds true where the individual acquires nationality of that Member State with a view to exercising a right to free movement in other Member States: Case C-200/02 Chen. An individual who acquires nationality of a Member State can derive rights from her new status under EU law immediately: Case 136/78 Auer.

When the Member States exercise their powers in the field of nationality, they must have due regard for EU law; but that the individual will become stateless as a result of a decision does not breach EU law: Case C-135/08 Rottmann.

The foundations of the Court’s analysis: Martínez Sala and the significance of ‘lawful residence’
An EU citizen who had moved from one to another Member State and was lawfully resident there is entitled not be discriminated against on grounds of her nationality in respect of all matters within the scope of EU law (under Articles 18 and 20 TFEU, instead of Article 21 TFEU): Case C-85/96 Martínez Sala. That Union citizens are treated differently to nationals in respect of the systematic processing of personal data for the purposes of fighting crime constitutes discrimination prohibited by Article 18(1) TFEU: Case C-524/06 Huber. A citizen of the Union can, on the basis of that status alone, enjoy a right to reside through direct application of Article 21(1) TFEU; once such a person is granted a residence card, Article 18 TFEU applies to his situation, so that he may obtain social assistance without discrimination on grounds of nationality: Case C-456/02 Trojani.

Member States may reject claims to social assistance by EU citizens who have no intention to work and cannot support themselves. "[...] Article 7(1)(b) of Directive 2004/38 seeks to prevent economically inactive Union citizens from using the host Member State’s welfare system to fund their means of subsistence. [...] A Member State must therefore have the possibility, pursuant to Article 7 of Directive 2004/38, of refusing to grant social benefits to economically inactive Union citizens who exercise their right to freedom of movement solely in order to obtain another Member State’s social assistance although they do not have sufficient resources to claim a right of residence. To deny the Member State concerned that possibility would[...] thus have the consequence that persons who, upon arriving in the territory of another Member State, do not have sufficient resources to provide for themselves would have them automatically, through the grant of a special non-contributory cash benefit which is intended to cover the beneficiary’s subsistence costs.": Case C‑333/13 Dano.

Member States may reject claims for social assistance by EU citizens from other Member States who do not enjoy a right of residence or are entitled to reside on their territory solely because of their job-search. This includes claims by EU citizens from other Member States for benefits whose predominant function is to cover the minimum subsistence costs, even if such benefits are also intended to facilitate access to the labour market of the host Member States: Case C-67/14 Alimanovic.

A Member State can require recipients of child benefit and child tax credit to have a right to reside there. Although that condition is considered to amount to indirect indiscrimination, it is justified by the need to protect the finances of the host Member State: Case C-308/14 Commission v UK.

Students as citizens
A citizen who moved to another Member State must be treated the same in law as nationals of that Member State who are similarly situated; it would be incompatible with her free movement rights if her home Member State treated her less favourably for that reason on her return, under Articles 18, 20 and 21 TFEU: Case C-224/98 D’Hoop, see also Case C-184/99 Grzelczyk.

EU law precludes national legislation which grants students the right to assistance covering their maintenance costs only if they are settled in the host Member State, where national law prevents a national of another Member State from obtaining that status of settled person as a student even if he is lawfully resident and has received a substantial part of his secondary education in the host Member State and has consequently established a genuine link with the society of that State: Case C-209/03 Bidar, overturning Case 197/86 Brown. Compare with the controversial Case C-147/03 Commission v Austria: holders of secondary education diplomas awarded in other Member States must be able to gain access to higher and university education without discrimination. On the export of education grants from Germany, see Case C-275/12 Elrick and Case C-220/12 Thiele Meneses.

Opportunities given to Union citizens by Article 21 TFEU cannot be fully effective if a national of a Member State can be deterred from availing of them by obstacles placed in the way of staying in another Member State by legislation of his home State penalising the mere fact that he has used those opportunities: Joined Cases C-11/06 and C-12/06 Morgan and Bucher. A measure disadvantaging children of nationals solely because they had used their freedom of movement by going to another Member State to attend a school there is a restriction that cannot be justified: Case C-76/05 Schwarz and Gootjes-Schwarz, comparable to Case C-56/09 Zanotti.

A Member State requiring, prior to making a grant to a student from another Member State, that he or she was sufficiently integrated into the host State was proportionate under Article 18 TFEU: Case C-158/07 Förster, distinguished in Case C-542/09 Commission v Netherlands. A difference of treatment between residents and non-residents and this residence-based rule had to be considered as indirect discrimination based on nationality unless objectively justified: Case C-73/08 Bressol and Others.

Retired persons as EU citizens
Article 21(1) TFEU precludes legislation of a Member State which makes the granting of a right to a reduction of income tax by the amount of health insurance contributions paid conditional on payment of those contributions in that Member State on the basis of national law: Case C-544/07 Rüffler.

The mere fact that an EU citizen from another Member State had applied for a retirement supplement did not suffice to show that he was an unreasonable burden on the Austrian social assistance system; a full examination of his situation had to be carried out by the host Member State: Case C-140/12 Brey.

The extension of Martínez Sala as regards social security
Article 21 TFEU prohibits treating EU citizens less favourably by reason of the exercise of their Treaty freedom to move and reside freely in another Member State: Case C-135/99 Elsen (see also Case C-228/07 Petersen). But the freedom of movement and residence conferred by Article 21 TFEU does not prevent Member States from imposing a residence clause as a condition for entitlement to obtain unemployment benefit: Case C-406/04 De Cuyper, confirming Case C-138/02 Collins. However, "in view of the establishment of citizenship of the Union and the interpretation of the right to equal treatment enjoyed by citizens of the Union, it is no longer possible to exclude from the scope of Article 45(2) TFEU a benefit of a financial nature intended to facilitate access to employment in the labour market of a Member State": Joined cases C-22/08 and C-23/08 Vatsouras.

There could be no guarantee that moves would be neutral in their effects on social security: Case C-208/07 von Chamier-Glisczinski. Article 21 TFEU could capture a practice adopted by companies representing the implementation of a ‘political’ agreement: Case C-345/09 Van Delft.

Citizenship and the right to a name
Though rules governing surnames are a matter of national law, they must be applied in conformity with EU law, applying Article 20 TFEU; Articles 18 and 20 TFEU preclude the administrative authority of a Member State from refusing to grant an application for a change of surname for children resident in that State and having dual nationality of that State and of another Member State, in the case where the purpose of that application is to enable those children to bear the surname to which they are entitled according to the law and tradition of the second Member State: Case C-148/02 Garcia Avello; compare with Case C-168/91 Konstantinidis where freedom of establishment applied.

Article 21 TFEU precludes national legislation which places individuals at a disadvantage simply because they have exercised their freedom to move and reside in another Member State; such an obstacle to freedom of movement could only be permitted if it was objectively justified: Case C-353/06 Grunkin and Paul. See balanced, complicated, careful application in Case C-391/09 Runevič-Vardyn and Wardyn.

In light of Austria’s status as a republic that by the refusal to recognise parts of a name granted in another Member State which might give the impression that the holder has noble status, the Austrian authorities had not gone beyond further than is necessary in light of the fundamental constitutional objective pursued by them: Case C-208/09 Sayn-Wittgenstein, similar to ECtHR ruling in Application 71074/01 Mentzen v Latvia.

Citizens’ rights to enter, reside and remain
A citizen of the European Union who no longer enjoys a right of residence as a migrant worker in the host Member State can, as a citizen of the Union, enjoy there a right of residence by direct application of Article 21 TFEU; children of an EU citizen who have installed themselves in a Member State during the exercise by their parent of rights of residence as a migrant worker are entitled to reside there in order to attend general educational courses there, pursuant to Article 10 of Regulation (EU) 492/2011; it is irrelevant that the parents of the children concerned have meanwhile divorced, that only one parent is a citizen of the Union and that parent has ceased to be a migrant worker in the host Member State and that the children are not themselves citizens of the Union; where children have the right to reside in a host Member State in order to attend general educational courses, the parent who is the primary carer of those children, irrespective of his nationality, is entitled to reside with them in order to facilitate the exercise of that right: Case C-413/99 Baumbast and R.

“The parent of a child who has attained the age of majority and who has obtained access to education on the basis of Article 12 of Regulation No 1612/68 on freedom of movement for workers within the Community as amended by Directive 2004/38, may continue to have a derived right of residence under that article if that child remains in need of the presence and care of that parent in order to be able to continue and to complete his or her education”: Case C-529/11 Alarape.

See the unusual case Case C‑364/10 Hungary v Slovakia: Article 21 TFEU does not oblige the Slovakia to guarantee access to its territory to the President of Hungary.

The greater the degree of integration of the Union citizen and their family members into the host State, the greater their degree of protection against expulsion: Case C-145/09 Tsakouridis.

Separated spouses must be allowed to remain in the host state: Case 267/83 Diatta; but 'spouse' does not include cohabitees: Case 59/85 Reed. A third-country national could move to another Member State with the migrant EU citizen only once the former has entered and resided lawfully: Case C-109/01 Akrich, Case C-370/90 Surinder Singh not applied and Case C-459/99 MRAX not followed. However, the ECJ limited Akrich to its facts in later cases such as Case C-1/05 Jia.

"Freedom of movement for Union citizens must therefore be interpreted as the right to leave any Member State, in particular the Member State whose nationality the Union citizen possesses, in order to become established under the same conditions in any Member State other than the Member State whose nationality the Union citizen possesses"; "A national of a non-member country who is the spouse of a Union citizen residing in a Member State whose nationality he does not possess and who accompanies or joins that Union citizen benefits from the provisions of" the Citizens’ Rights Directive: Case C-127/08 Metock. "The fact that a third-country national who is a member of a Community worker’s family did not, before residing in the Member State where the worker was employed, have a right under national law to reside in the Member State of which the worker is a national has no bearing on the determination of that national’s right to reside in the latter State": Case C-291/05 Eind.

"[...] national legislation such as that described in the order for reference, to the extent that it (i) prevents citizens of the Union from asserting the right conferred on them by Article 21 TFEU to move and reside freely against absolute territorial prohibitions that have been adopted for an unlimited period and (ii) prevents administrative bodies from acting upon a body of case-law whereby the Court has confirmed the illegality, under EU law, of such prohibitions, cannot reasonably be justified by the principle of legal certainty and must therefore be considered, in this respect, to be contrary to the principle of effectiveness and to Article 4(3) TEU": Case C‑249/11 Byankov.

The ‘avoir fiscal’ ruling
Although residence may indeed be a legitimate basis on which to distinguish between the situations of two individuals or two companies for tax purposes, any such distinction must be applied systematically; the tax authority cannot treat the two firms as identically situated in terms of imposing a burden but differently situated when offering some form of benefit: Case 270/83 Commission v France (avoir fiscal).

Discrimination/comparable situations
What is an objective, relevant difference in situation?

Article 45 TFEU does not permit national rules under which a worker who is a national of, and resides in, another Member State and is employed in the host State is taxed more heavily than a worker who resides in the host State and performs the same work there when there is no objective difference between their circumstances: Case C-279/93 Schumacker.

Freedom of establishment does not, in principle, allow for distinction between subsidiaries and branches; the difference between the two forms of establishment is not considered to be an objective one in EU law: Case 270/83 Commission v France (avoir fiscal), Case C-446/03 Marks & Spencer.

Articles 49 and 55 TFEU prevent national legislation from granting a repayment supplement on overpaid tax to companies which are resident for tax purposes in that country at the same time as refusing the supplement to companies resident for tax purposes in another Member State: Case C-330/91 Commerzbank.

Fiscal restrictions on cross-frontier activities
Tax cohesion and fiscal supervision was accepted as reasons in principle for accepting national fiscal rules that distinguish between taxpayers based on the place of the taxpayer’s residence, but they must be proportionate: Case C-204/90 Bachmann. However, discriminatory treatment cannot be justified by the fact that the victim enjoys some unrelated benefit; arguments based on ensuring fair competition between undertakings are rejected: see inter alia Case C-294/97 Eurowings Luftverkehr, Case C-422/01 Skandia. A direct link must be established between the tax concession concerned and the offsetting of that concession by a particular tax levy: Case C-471/04 Keller Holding, Case C-347/04 Rewe Zentralfinanz, Case C-443/06 Hollmann; similarly Case C-281/06 Jundt.

The Member State may not assume that all non-residents are tax evaders simply because they are not resident; arguments on protection of revenue/integrity of the tax base are rejected: see inter alia Case C-264/96 ICI, Case C-446/03 Marks & Spencer. A Member State is not entitled to lay down a longer limitation period for the valuation of shares in non-resident companies than that applicable for resident companies: Case C-132/10 Halley. However, insofar as a Member State lays down a longer recovery period for taxable items of which the tax authorities had no knowledge, it cannot be reproached for applying that period only to taxable items not located in its territory: Joined Cases C-155/08 and C-157/08 X.

"The rationale for promoting research must surely be to encourage excellence; excellence, however, is not necessarily restricted to French research centres": Case C-39/04 Laboratoires Fournier per Jacobs AG; similarly for ensuring the survival of small and medium-sized enterprises, see Case C-464/05 Geurts and Vogten.

National tax legislation must respect the rules on free movement of capital: Case C-436/06 Grønfeldt, Case C-487/08 Commission v Spain (Spanish dividend exemptions), Case C-418/07 Papillon.

Fiscal restrictions and citizenship (shift to restrictions approach)
Less favourable treatment of cross-border residence can only be dealt with under the citizenship rules where the other, more specific, provisions of the Treaty are not applicable: compare Case C-112/91 Werner and the later Case C-470/04 N. Article 21 TFEU can be relevant where Articles 45, 49 or 56 are not in issue: Case C-365/02 Lindfors.

Where a pensioner who moved his residence from one Member State to another automatically loses the possibility of having his tax bills taken into account in determining how much of the pension was paid to him, and received a smaller amount, such national legislation would violate EU law: Case C-224/02 Pusa, reason similar to Cases C-76/05 Schwarz, Case C-318/05 Commission v Germany. (Such shift from a non-discrimination/equal treatment approach to a restrictions/obstacle approach was confirmed in Case C-192/05 Tas-Hagen. Such restrictions can be justified only if proportionate: Case C-499/06 Nerkowska, Joined Cases C-11/06 and C-12/06 Morgan.)

Article 21(1) TFEU precludes national legislation which makes the granting of a right to a reduction of income tax by the amount of health insurance contributions paid conditional on payment of those contributions in that Member State: Case C-544/07 Rüffler.