He supreme court has established that the assignments that the European Parliament pays its deputies are not exempt from paying income tax. This has been established by the Contentious-Administrative Chamber of the High Court in a sentence, in which it has dismissed the appeal presented by the PP MEP Gabriel Mato, who between 2010 and 2013 stopped consigning to the Treasury 60,100 euros from his remuneration as a member of the European Parliamentunderstanding that it was exempt income.

The MEP filed his appeal before the Supreme Court, after the Superior Court of Justice of the Canary Islands confirmed the decision of the Tax Agency to correct his settlement and impose a sanction. The High Court confirms that in this case the exemption provided for in article 7 of the Personal Income Tax Lawwhich allows you to stop paying taxes of up to 60,100 euros each year in the event that you have worked abroad for the benefit of a foreign company.

After reviewing its jurisprudence, the Supreme Court emphasizes that said precept requires the concurrence of “employee, labor or statutory relationships, including civil servant relationships.” In this sense, the magistrates conclude that “there is no doubt that the relationship of a deputy with the European Parliament is completely unrelated to said characteristic of alienation, in the sense of dependency.”

Add that there is also no “employment relationship, in any of its possible aspects, nor statutory, nor is there any dependence of its members on the Chamber”. Furthermore, it stresses that article 7 in no case contemplates the case provided for in another article of said regulation (article 17), which refers to “the amounts that are paid, by reason of their position, to Spanish deputies in the European Parliament”.

Parliament is not a foreign company

On the other hand, the Supreme Court points out that the European Parliament cannot be understood as “a company or entity not resident in Spain”, nor as “a permanent establishment located abroad”. As the sentence explains, the parliamentary chamber does not constitute a fixed place of business, nor does it fit into common examples such as “branches, agencies, offices, workshops, warehouses, stores, mines, quarries, oil and gas wells or any other place extraction or exploitation of natural resources.

“In the Parliaments, therefore, resides the popular sovereignty represented by its members, having entrusted a function, mainly legislative, budgetary and political control Article 14 of the Treaty on European Union (TEU) and Articles 223, 224, 226, 229, 231 and 232 of the Treaty on the Functioning of the European Union (TFEU). While its members, the deputies, elected by universal suffrage, exercise their functions by representative mandate of the citizens of each Member State, functions of representation of the citizens that they exercise freely and independently, without hint of any dependency, labor or statutory or similar”, recalls the resolution.

With all this, the Contentious-Administrative Chamber affirms that The similarities and parallels are “artificial and forced” that the ‘popular’ MEP has exposed to try to take advantage of the tax exemption, whose objective is to “favor companies and their degree of internationalization and individually considered workers who must travel abroad for work reasons, which is not in keeping with the institutional character and parliamentary purposes in a common political and economic organization of several countries and the role that the European Parliament fulfills”.

It also indicates that the regime of MEPs nor can it be compared with the workers or officials who provide their services in the European institutions, since the deputies have their own and differentiated regime.

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By Nail

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