CJEU: Lawyers admitted in another EU Member State may deduct mandatory pension contributions

Lawyers admitted to practise in Germany who are not resident in Germany may deduct part of their contributions. This was decided by the CJEU in its judgment of 6 December 2018 – C-480/17. The CJEU ruled following a request for a preliminary ruling from the Finance Court of Cologne, before which a lawyer admitted in Germany but resident in Belgium had previously brought proceedings. According to the CJEU’s decision, lawyers from other EU Member States who are subject to limited tax liability are treated in the same way as resident lawyers subject to unlimited tax liability when deducting pension contributions from the income tax assessment basis. This means that mandatory contributions to the lawyers’ pension scheme constitute expenses incurred in the course of practising as a lawyer and were therefore necessary for the exercise of that profession. These contributions may be deducted from income tax. Voluntary payments to a private or voluntary pension scheme, however, are not directly connected with the legal profession and therefore cannot be deducted from income tax.