Finnish tax law imposes a supplementary tax of 6% on pension income which exceeds €45,000. This is in addition to standard income tax that is imposed on earnings.

C received a retirement pension in Finland of a total of €461,900.88, of which €251,351.10 was deducted as advance income tax. In addition to his retirement pension, C received earned income for work undertaken in Finland.

C challenged the imposition of the supplementary tax on his pension income. He argued that it was age discrimination and contrary to the Framework Directive 2000/78/EC..


The first issue for the ECJ was to determine whether pension income fell within the scope of the Framework Directive 2000/78/EC. The ECJ said that the Framework Directive is intended to cover equal treatment “in employment and occupation”. It does not cover state social security or social protection schemes.

The ECJ then went on to discuss the concept of “pay” and stated that it must be interpreted broadly. It covers anything (cash or payment in kind) that an employee receives either immediately or at some point in the future and which is in respect of their employment. The ECJ held that pension income is capable of being pay.

However, the ECJ said further that it does not follow from this that national legislation relating to the tax on pension income would fall within the scope of the Framework Directive.

The ECJ held that a supplementary tax on pension income, without any link to the contract of employment, derives directly and exclusively from national tax legislation. It therefore does not fall within the Framework Directive.

The ECJ therefore ruled against C.

The judgment is available here.

C, 2 June 2106, Case C-122/15