On 28 January 2016, the Advocate General of the European Court of Justice (ECJ) issued an opinion in Case C involving a supplementary tax on large pensions. The case was referred to the ECJ by the Supreme Administrative Court of Finland.

The referring court asked the ECJ to rule on the following questions:

1. Should the provisions of article 3(1)(c) of Directive 2000/78/EC be interpreted as meaning that national legislation, such as the provisions on supplementary tax on pension income in Finand’s Income Tax Law, fall within the scope of EU law and therefore should the provision concerning the prohibition of discrimination on grounds of age laid down in article 21(1) of the Charter of Fundamental Rights of the European Union be applied in the present case?

If the ECJ’s reply to the first question is that the matter falls within the scope of EU law then the following questions also apply:

2. Are articles 2(1) and (2)(a) or (b) of Directive 2000/78/EC and the provisions of article 21(1) of the Charter of Fundamental Rights of the European Union to be interpreted as precluding national legislation concerning the supplementary tax on pension income, under which the pension income received by a natural person (the receipt of which is based at least indirectly on the person’s age), is burdened in certain cases with more income tax than would be charged on the equivalent amount of employment income?

3. If those provisions of Directive 2000/78/EC and the Charter of Fundamental Rights of the European Union preclude national legislation such as the supplementary tax on pension income, should it also be examined in the present case whether article 6(1) of the Directive is to be interpreted as meaning that national legislation, such as the supplementary tax on pension income, may nevertheless be regarded in terms of its aim as objectively and reasonably justified within the meaning of that provision of the directive, in particular on the basis of a legitimate employment policy, labor market or vocational training objective, since the purposes expressed in the preparatory materials for the national law are, through the supplementary tax on pension income, (i) to collect tax revenue from recipients of pension income who are capable of paying, (ii) to narrow the difference in tax rates between pension income and employment income, and (iii) to improve incentives for older persons to continue working?

Provisions of the EU directive

EU Directive 2000/78/EC established a general framework for equal treatment in employment and occupation. Article 1 states that the purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment. Article 2 (1) states that the concept of equal treatment is to mean that there should be no direct or indirect discrimination on any of the ground mentioned in Article 1.

Article 2 (2) (a) of the Directive covers direct discrimination and Article 2 (2) (b) covers indirect discrimination where an apparently neutral provision, criterion or practice would put persons having a particular age at a particular disadvantage compared with other persons, unless that provision is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.

Under Article 6 (1) of the Directive the member states may provide that differences of treatment on grounds of age shall not constitute discrimination if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labor market and vocational training objectives; and if the means of achieving that aim are appropriate and necessary.

Article 21 (1) of the Charter of Fundamental Rights of the European Union is the non-discrimination Article and provides that any discrimination based on any ground shall be prohibited.

ECJ Advocate General’s opinion

The Advocate General issued an opinion in the case on 28 January 2016. The Advocate General’s opinion was that Finland’s national legislation providing for a supplementary tax on pension income is not to be assessed by reference to the EU law prohibition of discrimination on the grounds of age laid down in article 21(1) of the Charter of Fundamental Rights of the European Union and in Directive 2000/78/EC.

The ECJ may take the Advocate General’s opinion into account when arriving at its decision but is not obliged to follow it.