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Decision in case 1834/2017/TE on the European Commission’s handling of an infringement proceeding against France

Available languages: en.fr
  • Case: 1834/2017/TE
    Opened on 08 Nov 2017 - Decision on 16 May 2018
  • Institution(s) concerned: European Commission

The case was about how the European Commission was dealing with an infringement procedure against France. The infringement procedure in question concerned the imposition of social contributions on income from assets in their country of residence on persons who are, at the same time, subject to the social security system of another Member State where they are employed. The complainant, who resides in France, but works in Luxembourg, had submitted a complaint in this regard to the Commission. The Ombudsman inquired into the issue and found that there was no maladministration in the Commission’s conduct.

Background to the complaint

1. The complainant works in Luxembourg and resides in France.

2. On 2 August 2016, the complainant submitted an infringement complaint against France to the European Commission (CHAP(2016)02580). Therein, he expressed concerns about the fact that he is required to pay social contributions on rental income and capital in France, although he is subject to the social security legislation of Luxembourg where he is employed. This means that he is subject to social charges in two EU Member States. The relevant French legislation was therefore, he argued, in breach of EU law, in particular in light of the Court of Justice’s judgment in De Ruyter[1].

3. It follows from the De Ruyter judgment of 2015 that the deduction of social contributions from the income[2] of persons who, though resident in France, are subject to the social security legislation of another Member State, is incompatible with the prohibition of overlapping social security legislations.

4. On 14 October 2016, the Commission replied to the complainant. It explained that it had already launched an infringement procedure on the matter with a letter of formal notice in June 2015 (n° 4168/2013). The Commission stated that, following the Court’s judgment in De Ruyter and the Commission’s letter of formal notice, the French authorities had adopted measures to reimburse the sums levied in breach of EU law. The Commission also explained that the French authorities had recently changed how they applied their tax rules. In this context, the Commission noted that it had started a dialogue with the French authorities on these new rules. It stressed that the infringement procedure was still ongoing and that the Commission had not yet taken a decision on the compatibility of the new French legislation with EU law.

5. On 15 May 2017, the complainant sent an email to the Commission asking about the state of play of his complaint.

6. On 23 May 2017, the Commission replied to the complainant. It reiterated that the infringement procedure was still ongoing and that his arguments were well known to the Commission.

7. On 13 October 2017, the complainant turned to the Ombudsman.

The inquiry

8. The Ombudsman opened an inquiry into the following aspect of the complaint:

The Commission failed to act upon France’s infringement of EU law given that the complainant had filed his complaint in August 2016.

9. In the course of the inquiry, the Ombudsman’s inquiry team inspected the Commission's file on the infringement proceeding in question. The Ombudsman's decision takes into account the arguments and views put forward by the parties.

The Ombudsman's assessment

10. The Ombudsman notes that the complainant currently pays certain social contributions in two EU Member States, that is, in France and Luxembourg. The complainant brought this issue to the attention of the Commission in August 2016. However, the relevant infringement proceeding is still ongoing. The Ombudsman understands that this situation is frustrating for the complainant. She also notes that the infringement case is of importance for him and many other EU citizens, who are subject to the French legislation in question.

11. Having said that, the Ombudsman notes that Article 258 of the Treaty on the Functioning of the European Union (TFEU) provides a mechanism by means of which the Commission can seek to ensure that Member States apply EU law correctly. According to well-established case law[3], the Commission enjoys a wide margin of discretion in deciding when and how to act in infringement proceedings against a Member State. The Ombudsman has consistently taken the view that her role in such cases is limited to verifying whether the Commission has acted diligently and in accordance with the principles of good administration. This role may, for instance, include a review of whether the Commission has taken measures without delay.

12. At the inspection meeting, the Ombudsman’s inquiry team was satisfied that the Commission has acted without delay since the launch of the infringement procedure in June 2015. Since then, the Commission has engaged in a constant dialogue with the French authorities, with a view to resolving the issue at hand. The inquiry team was satisfied that the long duration of the infringement procedure is due to the very complex nature of the matter in question. The inquiry therefore has not brought to light any instance of maladministration. Given that thousands of citizens have the same concern as the complainant, the Ombudsman encourages the Commission to pursue the matter vigorously.

Conclusion

Based on the inquiry, the Ombudsman closes this case with the following conclusion:

There is no maladministration by the Commission.

The complainant and the Commission will be informed of this decision.

 

Emily O'Reilly

European Ombudsman

Strasbourg, 16/05/2018

 

[1] Case C-623/13 de Ruyter [2015] ECLI:EU:C:2015:123.

[2] Income irrespective of whether it comes from an employment relationship or from assets.

[3] See judgment of the Court of Justice in Case C-247/87, Star Fruit v Commission [1989], ECLI:EU:C:1989:58, para. 11.