Press Release: Direct taxation: Commission requests Austria to end discriminatory rules on personal income tax

By a reasoned opinion under Article 226 of the EC Treaty, the European Commission has formally requested Austria to change one provision of its personal income tax legislation that is incompatible with the principles of free movement of worker and freedom of establishment in the Internal Market. According to Austrian law, under certain conditions resident taxpayers with foreign income cannot benefit from full tax deduction of personal expenses while residents with domestic income can. If there is no satisfactory reaction to the reasoned opinion within two months, the Commission may decide to refer the matter to the European Court of Justice.