CJ, 27-11-2025, nr. C-137/24 P

By the first limb of the second ground of appeal, directed against paragraph 50 of the judgment under appeal, the appellant submits that the General Court failed to comply with the obligation incumbent on the administration, in accordance with Article 41(2)(c) of the Charter, to give reasons for its decisions.

According to the appellant, it follows from the combined provisions of Article 90 of the Staff Regulations and Article 41 of the Charter that the Commission was under an obligation to adopt a decision concerning him. In his view, the administration's failure to act constitutes a breach of the principle of good administration on which he may rely.

According to the Commission, the first limb of the second ground of appeal must be rejected as unfounded.

It must be recalled that, according to well-established case-law, in the context of an appeal, objections directed against grounds of a judgment of the General Court included for the sake of completeness cannot lead to that judgment being set aside and must therefore be dismissed as being ineffective (judgment of 22 June 2023, DI v ECB, C-513/21 P, EU:C:2023:500, paragraph 47 and the case-law cited).

The contested ground of the judgment under appeal, set out in paragraph 50 of that judgment, is included purely for the sake of completeness. The appellant's arguments alleging the Commission's failure to adopt an explicit decision of refusal informing him of his right to lodge a complaint were rejected, in paragraph 49 of the judgment under appeal, as being ineffective, before the General Court proceeded to reject those arguments, for the sake of completeness, in particular in paragraph 50, as unfounded, ‘in any event’.

Accordingly, the first limb of the second ground of appeal must be rejected as ineffective.

By the second limb of the second ground of appeal, the appellant submits that the Commission infringed his right to be heard, enshrined in Article 41(2)(a) of the Charter, in so far as that institution completely ignored, even at the stage of the complaint procedure, the note, referred to in paragraph 7 of the judgment under appeal, which he had sent on 15 July 2021 to the Head of the Rights and Obligations unit of the PMO and to which he had received no reply.

According to the Commission, the second limb of the second ground of appeal should be rejected as inadmissible and, in any event, as unfounded.

It must be borne in mind that arguments in an appeal which criticise not the judgment delivered by the General Court following a claim for annulment of a decision, but the decision the annulment of which was sought before the General Court, are inadmissible (judgment of 27 April 2023, PL v Commission, C-537/21 P, EU:C:2023:363, paragraph 108 and the case-law cited).

By his arguments in support of the second limb of the second ground of appeal, the appellant, instead of criticising the grounds of the judgment under appeal, complains that the Commission infringed his right to be heard, enshrined in Article 41(2)(a) of the Charter, while relying on the note referred to in paragraph 7 of that judgment.

Accordingly, in accordance with the case-law referred to in paragraph 55 above, that second limb of the second ground of appeal must be rejected as inadmissible.

Consequently, the second ground of appeal must be rejected as in part ineffective and in part inadmissible.

By the first to third limbs of the third ground of appeal, which it is appropriate to examine together, the appellant submits, in the first place, that the General Court, in holding in paragraph 93 of the judgment under appeal that the tax abatement provided for in Article 3(4) of Regulation No 260/68 supplemented the dependent child allowance and that only actual payment of that allowance by an EU institution may give entitlement to that abatement, adopted an incorrect interpretation of Article 3 and misconstrued the true legal nature of that abatement. According to the appellant, there is no link between the grant of the tax abatement and entitlement to the dependent child allowance.

The appellant submits that it follows from the wording of Article 3 of Regulation No 260/68 and from the historical context of that article that the tax abatement is not to be granted in addition to the dependent child allowance, but as a supplement to the allowance for occupational expenses, referred to in the first subparagraph of Article 3(4) of that regulation, with the result that the grant of that abatement is not conditional on receipt of the dependent child allowance.

According to the appellant, the General Court's erroneous findings concerning the interpretation of Article 3(4) of Regulation No 260/68 result, inter alia, from an application of the General Court's case-law, in particular the judgment in XB v ECB referred to in paragraphs 81 and 82 of the judgment under appeal, which is itself vitiated by an error of law.

In the second place, the appellant argues that the General Court's findings, in paragraphs 74 and 93 of the judgment under appeal, that all the criteria laid down in Article 2 of Annex VII to the Staff Regulations must be met, including the criterion relating to the age limit for the child concerned laid down in Article 2(3), in order for a child to be recognised as a dependent child and give rise to entitlement to payment of the tax abatement, are incorrect.

In that regard, the appellant observes that it follows from the judgment of 14 December 1990, Brems v Council (T-75/89, EU:T:1990:88), referred to in paragraph 74 of the judgment under appeal, that the definition of the concept of ‘dependent child’ must be assessed solely in the light of Article 2(2) of Annex VII to the Staff Regulations. Such an interpretation is supported by Conclusions No 222/04 of the Heads of Administration, which refer only to paragraph 2 of Article 2 and not to the other provisions of Article 2 of Annex VII to the Staff Regulations.

According to the appellant, it also follows that the General Court's finding, set out in paragraph 77 of the judgment under appeal, that the appellant should have argued that his daughters, pursuant to Article 2(4) of Annex VII to the Staff Regulations, were to be treated as if they were dependent children by special decision of the appointing authority is vitiated by an error of law. Such a finding would run counter to the administrative simplification sought by the adoption of Conclusions No 222/04 of the Heads of Administration.

Furthermore, the appellant argues that, first, it follows from the previous practice of the Commission over approximately 60 years that it was not necessary for the appellant to take action, under Article 2(4) of Annex VII to the Staff Regulations, given the conditions laid down in those conclusions of the heads of administration. Second, the Commission itself informed the appellant that he was no longer entitled to a dependent child allowance for his two children, but that he could receive a tax abatement if he so requested. Thus, the General Court should have granted him, in any event, that abatement in accordance with customary rules and the principle of the protection of legitimate expectations.

In the third and last place, the appellant takes the view that the General Court, in paragraph 100 of the judgment under appeal, misconstrued the true legal nature of a tax abatement. Thus, the appellant did not request that he should ‘continue to receive tax relief’ or, contrary to what is stated in paragraph 100, ‘reimbursement of the sums which, in his view, should have been deducted from the basic taxable amount of his remuneration’.

In that regard, the appellant submits that tax relief cannot be paid, but leads to a reduction in taxable income. It is only subsequently that it reduces the amount of tax by reference to the applicable tax rate. Thus, the appellant requested a tax refund on the basis of a recalculation of the tax due, after deduction of the applicable relief.

Moreover, the appellant argues that, when he would no longer receive any remuneration, for example, after his death, he would no longer pay any tax and, therefore, no longer receive any tax relief either. Thus, contrary to what is stated in paragraphs 72 and 73 of the judgment under appeal, there is no risk that the appellant's children will become a burden on the EU budget after his death. The General Court's findings in paragraphs 72 and 73 are therefore irrelevant.

Lastly, the appellant points out that he is not claiming any dependent child allowance, since it is common ground that he is not entitled to it. In addition, the burden of maintaining his children falls entirely on him, and not on the EU budget. However, it is inconceivable that he should pay, instead of the public authorities and from his income on which tax has already been paid, benefits such as, for example, housing allowance, heating assistance, social assistance or even education aid, which should normally be financed from tax revenue, without receiving, in return, a tax relief.

The Commission contends that the first to third limbs of the third ground of appeal should be rejected as unfounded.

It should be borne in mind that, in accordance with Article 3(1) of Regulation No 260/68, tax for the benefit of the European Union is payable each month on salaries, wages and emoluments of any kind paid by the European Union to each person liable.

Article 3(3) of that regulation lists the family allowance and social benefits to be deducted from the basic taxable amount. Those benefits and allowances include the dependent child allowance. Consequently, as the General Court held in paragraph 67 of the judgment under appeal, it follows from the wording of Article 3(3) that, in order to calculate the amount of tax payable by an official, such as the appellant, on his monthly remuneration, that allowance, inter alia, must be deducted from the basic taxable amount.

In addition, under the first subparagraph of Article 3(4) of that regulation, an abatement of 10 % for occupational and personal expenses is to be made from the amount obtained by applying the preceding provisions of that article.

Lastly, in accordance with the second subparagraph of Article 3(4) of Regulation No 260/68, ‘an additional abatement equivalent to twice the amount of the allowance for a dependent child shall be made for each dependent child of the person liable as well as for each person treated as a dependent child within the meaning of Article 2(4) of Annex VII to the Staff Regulations …’.

It is apparent from the wording of the second subparagraph of Article 3(4) that, as the General Court stated in paragraph 69 of the judgment under appeal, in order to receive the additional tax abatement provided for by that provision, the person liable must have one or more dependent children, or one or more persons treated as a dependent child within the meaning of Article 2(4) of Annex VII to the Staff Regulations.

However, as the Advocate General observed, in essence, in point 26 of her Opinion, the second subparagraph of Article 3(4) of Regulation No 260/68 does not make entitlement to the tax abatement conditional upon the dependent child allowance actually being paid to the person concerned on the basis of Article 2(3) of that annex, contrary to what the General Court held in paragraphs 81 and 93 of the judgment under appeal.

However, although entitlement to the tax abatement does not depend on actual payment of the dependent child allowance, it cannot be maintained, as the appellant does, that there is no link between that abatement and that allowance.

First, as is apparent from the case-law of the General Court, the tax abatement and the dependent child allowance both pursue an objective of a social nature and the provision thereof is justified by the expenses arising from a present and definite need, connected with the existence of the child and the cost of actually maintaining him or her (see judgments of 28 November 1991, Schwedler v Parliament, C-132/90 P, EU:C:1991:452, paragraphs 18 and 26; of 7 May 1992, Council v Brems, C-70/91 P, EU:C:1992:201, paragraph 9 and the case-law cited; and of 30 November 2023, MG v EIB, C-173/22 P, EU:C:2023:932, paragraph 47).

Second, as has been pointed out in paragraph 76 above, entitlement to the tax abatement and to the dependent child allowance depends on the existence of a ‘dependent child’ or a person treated as such a child, as defined in Article 2 of Annex VII to the Staff Regulations.

Article 2(2) of Annex VII to the Staff Regulations defines the concept of a ‘dependent child’ as a ‘legitimate, natural or adopted child of an official, or of his spouse, who is actually being maintained by the official’.

As the General Court observed, in essence, in paragraph 71 of the judgment under appeal, although that provision does not refer to any age limit for defining the concept of ‘dependent child’, it follows from a combined reading of the provisions of Article 2 of that annex as a whole that that concept must not be understood within the meaning of Article 2(2) alone, but more broadly.

In that regard, it should be borne in mind that, under Article 2(1) of Annex VII to the Staff Regulations, ‘an official who has one or more dependent children shall, in accordance with paragraphs 2 and 3 below, receive an allowance … per month for each dependent child’. It follows from those terms that only persons satisfying the conditions laid down in those two paragraphs may be regarded as being ‘dependent children’ for the purposes of applying Article 2.

That interpretation is supported by Article 2(6) of that annex, which expressly refers to ‘a dependent child within the meaning of this Article’ and by Article 2(7), which refers to ‘the dependent child within the meaning of paragraphs 2 and 3’.

In addition, Article 2(4) of Annex VII provides that ‘any person whom the official has a legal responsibility to maintain and whose maintenance involves heavy expenditure’ may exceptionally be treated as if that person were a dependent child. The Court has already held that the object of that provision is precisely to ensure that a person who does not satisfy the conditions laid down in paragraph 3 of that article, in that that person is neither the minor child of the official nor that official's adult child who is receiving educational or vocational training, may be treated as a dependent child where the official has in fact to maintain that person. In particular, it stated that the exceptional nature of that treatment does not imply that the child of the official must necessarily be excluded from the scope of Article 2(4) of that annex (see, to that effect, judgment of 7 May 1992, Council v Brems, C-70/91 P, EU:C:1992:201, paragraphs 7 and 10). The case-law resulting from that judgment precludes any child being maintained by the official from being regarded as his or her dependent child, irrespective of the conditions laid down in Article 2(3) of that annex.

Furthermore, it should be noted that other provisions of the Staff Regulations, namely, in particular, Article 72 thereof, relating to sickness insurance, and Article 80 thereof, relating to the orphan's pension, refer, as regards the definition of the concept of ‘dependent child’, to Article 2 of Annex VII to the Staff Regulations as a whole, and not only to paragraph 2 thereof. Thus, for reasons, in particular, of consistency of the Staff Regulations, it is necessary to refer to the provisions of Article 2 as a whole in order to define that concept.

Thus, the Court has already held, in essence, that the concept of ‘dependent child’ has to be interpreted by taking in to account Article 2 of Annex VII to the Staff Regulations as a whole (judgment of 20 November 1980, Gerin v Commission, 806/79, EU:C:1980:264, paragraph 15).

It follows from the foregoing that the General Court did not err in law in holding, in paragraphs 74, 75 and 93 of the judgment under appeal, in essence, that the concept of ‘dependent child’, within the meaning of Article 2 of Annex VII to the Staff Regulations, must be interpreted by taking into account the age limits laid down in paragraph 3 of that article.

Since, as has been pointed out in paragraph 80 above, entitlement to the tax abatement depends on the existence of a ‘dependent child’ within the meaning of Article 2 of Annex VII to the Staff Regulations, it must be held that the General Court did not err in law in holding, in paragraph 80 of the judgment under appeal, that Article 3(4) of Regulation No 260/68 applied only in situations where the person concerned also satisfies the conditions for entitlement to the dependent child allowance under Article 2.

The foregoing finding follows from the very wording of the second subparagraph of Article 3(4) of Regulation No 260/68 and Article 2 of Annex VII to the Staff Regulations, as interpreted by the Court of Justice. That finding cannot be invalidated by the appellant's arguments based on case-law of the General Court and on Conclusions No 222/04 of the Heads of Administration, summarised in paragraphs 64 and 65 above, or by his arguments based on the alleged legal nature of a tax abatement set out in paragraphs 67 to 70 above.

As regards the appellant's argument, referred to in paragraph 66 above, that the General Court should have granted him, in any event, the tax abatement in accordance with customary rules and the principle of the protection of legitimate expectations, it must be borne in mind that, in accordance with Article 58 of the Statute of the Court of Justice of the European Union, the grounds of appeal must be based on arguments made in the proceedings before the General Court. Moreover, according to Article 170(1) of the Rules of Procedure of the Court of Justice, the subject matter of the proceedings before the General Court may not be changed in the appeal. The jurisdiction of the Court of Justice in an appeal is confined to a review of the findings of law on the pleas and arguments debated before the General Court (judgment of 19 September 2024, Coppo Gavazzi and Others v Parliament, C-725/20 P, EU:C:2024:766, paragraph 149 and the case-law cited).

Since the argument referred to in the preceding paragraph of the present judgment was not raised by the appellant before the General Court, it must be rejected as inadmissible.

In the light of all the foregoing considerations, the first to third limbs of the third ground of appeal must be discarded as in part inadmissible and in part unfounded.

By the fourth limb of the third ground of appeal, the appellant submits that the General Court erred, in paragraph 94 of the judgment under appeal, in holding that Conclusions No 222/04 of the Heads of Administration, on the basis of which he should have received the tax abatement, were not applicable in the present case.

According to the appellant, Commission Internal Directive No 36-2004 of 24 May 2004 (‘the internal directive’), which transposes Conclusions No 222/04 of the Heads of Administration, is not an internal decision of a general nature, taken on the basis of the Staff Regulations, but a decision adopted on the basis of Article 10 of Regulation No 260/68 in order to guarantee uniform interpretation of that regulation.

In addition, the appellant submits that those conclusions of the heads of administration constitute a lex specialis, with the result that the conditions which they lay down, in particular that relating to the age limit for dependent children, are applicable.

According to the Commission, the fourth limb of the third ground of appeal must be rejected as unfounded.

It should be noted, as the General Court found in paragraph 90 of the judgment under appeal, that the internal directive transposes Conclusions No 222/04 of the Heads of Administration. Those conclusions provide that, for dependent children over 26 years of age, the tax abatement under Article 3(4) of Regulation No 260/68 is to be approved only if the child has commenced training at the normal age for that child before reaching the age of 26 and if he or she is regularly pursuing that training. It is also provided that, in any event, the tax abatement ends with effect from the date on which the child receives an income exceeding 40 % of the salary of an official of grade 1, step 1, or when the child reaches the age of 30.

According to the case-law of the Court, internal acts adopted by an EU institution, such as an internal directive of the Commission, must be regarded as rules of conduct, indicating the practice to be followed, which the administration imposes on itself and from which it may not depart without specifying the reasons which have led it to do so (see judgment of 1 December 1983, Blomefield v Commission, 190/82, EU:C:1983:358, paragraph 20 and the case-law cited).

However, such internal acts may not in any circumstance derogate from binding and higher-ranking acts, such as, in the present case, the provisions of the Staff Regulations or of Regulation No 260/68 (see, to that effect, judgment of 1 December 1983, Blomefield v Commission, 190/82, EU:C:1983:358, paragraph 21).

It follows that the General Court was fully entitled, in paragraph 92 of the judgment under appeal, to recall that an internal directive adopted by an EU institution is a norm of lower rank than the Staff Regulations and, more generally, than a regulation, before holding that such an internal directive cannot lawfully lay down rules which derogate from the provisions of the Staff Regulations or of a regulation.

It follows from the findings relating to the first to third limbs of the third ground of appeal that, without prejudice to the fact that certain persons may exceptionally be treated as if they were dependent children pursuant to Article 2(4) of Annex VII to the Staff Regulations, the tax abatement provided for in Article 3(4) of Regulation No 260/68 cannot apply to an official's children who are over 26 years of age, in so far as those children exceed the age limit laid down in Article 2(3) of that annex, above which a person can no longer be regarded as a ‘dependent child’ within the meaning of Article 2.

It follows from the foregoing that the General Court did not err in law by holding, in paragraph 94 of the judgment under appeal, that the internal directive cannot apply in the present case, since such an application would have been contrary to Article 3(4) of Regulation No 260/68, read in conjunction with Article 2 of Annex VII to the Staff Regulations, it being specified that the exceptional treatment as dependent children under Article 2(4) is not at issue in the present case.

As regards the argument referred to in paragraph 95 above, it should be noted, as the Advocate General observed in point 55 of her Opinion, that the file before the Court does not make it possible to identify the legal basis on which the Commission adopted the internal directive. That said, whatever the basis on which that internal directive was adopted by that institution, in accordance with the case-law referred to in paragraph 100 above, such an internal act cannot, in any event, apply if it is contrary to a binding and higher-ranking EU act.

In the light of all the foregoing considerations, the fourth limb of the third ground of appeal must be rejected as unfounded.

Accordingly, the third ground of appeal must be rejected as in part inadmissible and in part unfounded.

As is apparent from paragraph 42 above, the General Court erred in law in finding, in paragraph 45 of the judgment under appeal, that the appellant's claim for annulment was inadmissible in so far as it concerned the implied rejection decision of 18 December 2021. It follows that the judgment under appeal must be set aside to that extent. Since the second and third grounds of appeal must be rejected, the appeal must be dismissed as to the remainder.