The European Court of Justice (ECJ) was requested by Finland’s Supreme Administrative Court (KOH) on 6 March 2015 to give a preliminary ruling in respect of the pension surtax.

Finland has imposed a surtax of 6% on large pensions since 2013. The surtax applies to pensions in excess of EUR 45,000 after the deduction of the pension income allowance. A number of appeals have been lodged in Finland in relation to compatibility of the pension surtax with EU law and the Directive that establishes the framework for equal treatment in occupations and employment (Council Directive 2000/78/EC dated 27 November 2000). The case at issue concerns an appeal against the pension surtax on the grounds that it discriminates based on age and the law should therefore not be applied. In the view of the Finnish tax authorities this is a direct tax matter that falls within the competence of the member state concerned and the ECJ therefore does not have jurisdiction over the matter.

Council Directive 2000/78/EC

The Directive on employment provides that equal treatment means there should be no direct or indirect discrimination and direct discrimination is taken to occur when one person is treated less favorably than another in a comparable situation. Indirect discrimination occurs where an apparently neutral provision puts persons with a particular religion or belief, disability, age or sexual orientation at a particular disadvantage compared with other persons, unless the criterion is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.

Article 3 on the scope of the Directive provides that it applies to all persons in the public and private sectors in relation to conditions for access to employment, all types of vocational guidance and training, employment and working conditions, including dismissals and pay.

Art. 21(1) of the EU Charter of Fundamental Rights

Article 21 of the EU Charter of Fundamental Rights is concerned with non-discrimination. Article 21 (1) provides that discrimination on any ground such as sex, race, color, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age, or sexual orientation is prohibited.

Questions for preliminary ruling by ECJ

The ECJ has been requested to give a preliminary ruling on the following issues:

1. Should Art. 3(1) of the Council Directive 2000/78/EC be interpreted so that the national law on a pension surtax is within the competence of the EU and that Art 21 (1) of the EU Charter of Fundamental Rights prohibiting age discrimination applies?

2. If the answer to the first question is yes, should Art. 2(1) and 2 (2) (a) or (b) of Directive 2000/78/EC and Art. 21(1) of the EU Charter of Fundamental Rights be interpreted as prohibiting national law on pension surtax under which pension income of an individual, obtained at least indirectly based on age, is in some situations subject to higher income tax than would be imposed on employment income?

3. If the above articles of Directive 2000/78/EC and the EU Charter of Fundamental Rights prohibit a national law providing for the pension surtax, is Art. 6 (1) of the Directive to be interpreted to mean that the pension surtax is objectively and reasonably justified, due to legitimate employment policy, the labor market and vocational training objectives, when the aim is to collect the tax revenue from pensioners who have the ability to pay, decrease the difference in tax burden between pension and employment income, and increase incentives for older people to continue working?

Article 6(1) of the Directive

Article 6 (1) of Directive 2000/78/EC provides that different treatment based on age is not discrimination if the measures are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labor market and vocational training objectives, and the means of achieving the aim are appropriate and necessary.