With its sentences C-76/05 and C-318/05 issued on 18/9/2007, the Court of Justice of the European Community has confirmed that German federal legislation on the non-deductibility of educational expenses incurred abroad for purposes of income tax violates European law. The sentence of the judges in Luxembourg – which now constitutes the jurisprudence valid for all EU member states – follows an appeal brought by the tax tribunal of Cologne to verify the legality of the application made by a Germany family fiscally resident in Germany for the deduction from income tax of educational expenses incurred for their children who go to school in Scotland; this application had been rejected by the German Ministry of Finance. According to the European Court, parents, by enrolling their children in a school in another EU state, have exercised their right to free circulation and cannot for this reason be discriminated against by being denied the same tax facilities as their compatriots, who enjoy the tax-deductibility of 30% of educational expenses incurred on the national territory. Of particular significance is the fact that in its ruling the Court puts on the same footing schools “financed by private funds” and schools that “are not essentially financed by private funds”, on the basis of the principle of the free provision of services.
