EU Commission refers the NETHERLANDS to the Court for taxing the transfer of pension capital to other Member States, but not domestic transfers

The Commission decided today to refer the Netherlands to the Court of Justice for taxing the transfers of pension capital by mobile workers.

Under EU law, mobile workers are free to take up jobs in Member States that allow full or partial lump sum out-payments of pensions.

12 Member States allow out-payments of pensions as lump sums: Belgium, Denmark, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Austria, Slovakia, Spain and Czechia.

Taxing transfers of pension capital to these Member States, while not taxing domestic transfers is a serious obstacle to the free movement of workers, the freedom to provide services and the free movement of capital (Articles 45, 56, 63 TFEU).

The Dutch legislation in question is, therefore, a restriction of the freedom of movement of workers (Article 45 TFEU), the freedom to provide services (Article 56 TFEU) and the free movement of capital (Article 63 TFEU).

The European Commission sent a letter of formal notice on 21 November 2012, followed by a reasoned opinion on 19 July 2018. Since the Netherlands has not yet complied, the Commission is now bringing the matter before the Court of Justice of the European Union.

Daniel Ferrie