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European Commission

Press release

Brussels, 27 September 2012

Taxation: Commission refers Germany to the Court of Justice for discriminatory inheritance tax provisions

The European Commission has decided to refer Germany to the EU's Court of Justice because of its legislation on inheritance and gift tax allowances. Under German law, there is a higher tax exemption for inherited German property if the testator or the heir are living in Germany, than if they are both living abroad. As a result, non-residents are taxed much higher on inherited assets located in Germany than German residents are. Such a provision could dissuade citizens living abroad from investing in property located in Germany. The Commission is of the opinion that this provision is discriminatory and constitutes an unjustified restriction on the free movement of capital, as provided for in the Treaties.

The referral to the CJEU is the last step in the infringement procedure.


A tax exemption on inheritances and gifts of up to € 500 000 is granted to German residents (depending on the degree of kinship) under Article 16 of the Law on Inheritance and Gift Tax, whereas the exemption is only € 2 000 if both the testator and the heir are not resident in Germany.

The Court of Justice dealt with the German Law on Inheritance and Gift Tax in its Mattner case (judgment of 22 April 2010 in case C-510/08) and decided, in the context of this case, that this provision was contrary to the free movement of capital.

After the Commission issued a reasoned opinion, Germany amended the Law on Inheritance and Gift Tax and, since December 2011, has granted non-residents the possibility to be treated, upon request, in Germany as tax residents for the purposes of gift and inheritance tax. However, this option does not, in view of the Commission, eliminate the infringement.

For press releases on infringement cases in the taxation or customs field see:

For the latest general information on infringement measures against Member States see:

For more information on EU infringement procedures, see MEMO/12/12 and MEMO/12/708 regarding the September infringement package decisions.

Contacts :

Emer Traynor (+32 2 292 15 48)

Natasja Bohez Rubiano (+32 2 296 64 70)

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