Economy The Supreme Court establishes that European parliamentarians must pay personal income tax on their salary

The Supreme Court has established that European parliamentarians cannot consider their salary as exempt income and thus avoid paying personal income tax

Economy The Supreme Court establishes that European parliamentarians must pay personal income tax on their salary

The Supreme Court has established that European parliamentarians cannot consider their salary as exempt income and thus avoid paying personal income tax.

The Contentious-Administrative Chamber has dismissed the appeal presented by the PP MEP Gabriel Mato referring to the personal income tax settlements between 2010 and 2013 in which he failed to record, on the understanding that it was exempt income, 60,100 euros from his remuneration as an MEP. This figure is the maximum that the law allows to consider as exempt income for having been generated abroad.

The Tax Agency corrected his settlement and included that income, in addition to imposing a sanction on the MEP. The Superior Court of Justice of the Canary Islands confirmed the decision of the Treasury and the politician appealed to the Supreme Court. He argued that the exemption from the Personal Income Tax Law for certain jobs carried out abroad was applicable to the salary of a member of the European Parliament. In another article, the same law establishes that "the amounts paid, by reason of their position, to Spanish deputies in the European Parliament" must be declared.

The Supreme Court emphasizes that the law requires, in order to be able to wield the article of exempt income, that it be produced within a relationship "of alienation", that is, of dependency. And he concludes 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; there is no employment relationship, in any of its possible aspects, nor statutory, nor is there dependence of its members on the Chamber.

The magistrates add that neither can the European Parliament be considered "a company or entity not resident in Spain" or "a permanent establishment located abroad", as provided by law to determine what can be exempt income. "A Parliament, of course, which neither constitutes a fixed place of business, nor does it fit into some of the common examples such as branches, agencies, offices, workshops, warehouses, shops, mines, quarries, oil and gas wells or any other place of extraction or exploitation of natural resources", says the ruling.

The magistrates insist that parliaments exercise their function as representatives of citizens "freely and independently, without any hint of dependency, labor or statutory or similar."

Thus, they conclude that it is "obvious" that the similarities and parallelism that the appellant intends to establish are "artificial and forced, and not only is it strange to the literal wording of the precept, but it does not even fulfill the purpose for which the exemption [...], since it has already been said that it is about favoring 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 purposes parliamentarians in a common political and economic organization of several countries and the role that the European Parliament fulfills and, therefore, the public obligations assumed by the State of origin and the MEPs whose displacement is totally unrelated to an economic or company incentive or entity, nor of workers for labor reasons".

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