This week in Case E-11/22, RS and Fiscal Authority of the Principality of Liechtenstein, the EFTA Court ruled that it is contrary to Article 28 EEA (by analogy, Article 45 TFEU) to apply a higher rate of taxation to income gained through employment activity in that EEA state who are non-residents in comparison to residents for tax purposes in that EEA state.
The EFTA Court also held that the effects of the unlawful national measures cannot be maintained, as the case for keeping the indirectly discriminatory tax was not met.
In sum: a victory for cross-border workers (residing in one state, working in another), and Liechtenstein will be left to refund both the applicant’s excessive income tax (and even possibly render state liability), as well as permit many other excessively taxed workers from seeking the necessary refunds from the state.
The case was submitted to the EFTA Court under the request for an advisory opinion (judgment) procedure under Article 34 SCA by the Administrative Court of the Principality of Liechtenstein. Both the EFTA Surveillance Authority and European Commission intervened in the case.
Whilst it was a case from the only non-Nordic EFTA-EEA state (Liechtenstein), the case is good precedent for any cross-border and cross-pillar workers in the Nordic states where work or residence is in either Iceland or Norway.
The judgment of the EFTA Court can be viewed at the following link: https://lnkd.in/emf523KS
Graham Butler