Netherlands, District Court of Gelderland, 28 July 2021 AWB 19/6813

Identification of the case

• Right to education (art. 14 CFREU)

• Article 6.16 & 6.17, first paragraph, under a & 6.18 of the Income Tax Law 2001
• Article 46, third paragraph, of the Income Tax Law 1964
• Article 39a of the Execution Income Tax Law 2001

Summary of the case

The claimant and his partner were a male, same-sex couple. They participated in a surrogacy program, making use of IVF treatment to realise their desire to have a child. They submitted the expenses of the treatment to the tax authorities as tax deductible, under specific healthcare costs (Article 1.17, first provision, under a of the Income Tax Law 2001). For the IVF expenses to be considered ‘specific healthcare costs’, the law requires the expenses to relate to a medical condition such as disease or disability. The claimant submitted these costs to the tax authority (defendant), who rejected this submission as they believed that the cost did not qualify for income tax deduction, because the claimant himself did not have a medical condition, as required. This requirement consequently entailed that the claimant and his partner, as a homosexual couple, could never qualify for the right to deduct the IVF treatment costs, as they could never conceive a child naturally, whilst other couples with decreased fertility are able to deduct costs for IVF from their taxable income on the basis of the same right. The claimant found this to be both a violation of the principle of equality under national law and the principle of non-discrimination. The latter was interpreted by the court with reference to the European Convention of Human Rights.

• Administrative judicial enforcement

Legal aid used by claimant; Claim for restoration of costs unlawfully collected by tax authority, not granted by court; Defendant to pay the claimants’ costs of procedure

The court reasoned that in finding whether the prohibition of discrimination is violated, two factors are to be taken into account. First, not every unequal treatment of equals is prohibited – this is only the case when a reasonable and objective justification is absent. Second, as this concerns a fiscal matter, the margin of appreciation of the legislator is wide. However, this margin is limited by situations concerning fundamental rights of people belonging to a vulnerable group, who have in the past been a victim of discrimination on the basis of an innate characteristic. (E.B. v. France, no. 43546/02, ECHR 2008 and Guberina v. Croatia, no. 23682/13, ECHR 2016).

The right to deduct certain abnormal healthcare costs from your taxes is meant to make up for particular expenses that certain taxpayers pay more of than others, due to their specific or abnormal circumstances. The deduction is meant to ensure that such abnormal costs do not result in non-justified unequal treatment. A comparison was made with other couples (both hetero and homosexual) who make use of this same right to deduct the costs of IVF treatment, due to infertility of either or both partner(s) whom as a result are unable to naturally conceive. The court could not find any relevant difference between these couples and a male, same-sex couple – neither can naturally conceive due to circumstances beyond their will. Reference was made to a finding by the ECtHR in Varnas v. Lithuania, no. 42615/06, ECHR 2013, that for a similar situation to be comparable, it is not required that the situations are identical. Rather, the situations must have a relevant similarity in the sense of the concrete character of the goal of the right. (Petrov v. Bulgaria, no. 1519/702, ECHR 2008).

The court found that the claimant was treated unequally, as other couples with similar circumstances were able to use the relevant provision to deduct their tax expenses. The claimant and his partner could never qualify for the same right under this provision, which was an inequality inseparable from the fact that they were male and homosexual. No objective and reasonable justification existed for this unequal treatment and the legislator failed to take into account that this provision resulted in unequal treatment for homosexual males, for which no justification was provided. Furthermore, the court stressed the importance of equal treatment especially for this claimant and his partner, as they belonged to a vulnerable group that has been subject to discrimination in the past. Consequently, the importance of equal treatment with other taxpayers was of extra weight. The court ruled that the inability of the claimant to deduct the costs of the IVF treatment from their taxes was an infringement of their right to non-discrimination under the Convention.

Thereafter, the court concluded that it was unable to grant the claimant restoration, as this would not help the claimant, who desired that the relevant provision in the legislation that gave rise to this unequal treatment was amended. The court referred the matter to the legislator, providing them with some options to remove this provision violating the right to non-discrimination from the system, as the court did not have the discretion to do so itself.

Role of the Charter and role of the general principles on enforcement

The European Convention of Human Rights was applied by the court to review whether the Dutch legislation at hand constituted a violation of the principle of non-discrimination. The claimant included this principle in their claim, however without specific reference to the ECHR. The court interpreted this as invoking the prohibition of discrimination as enshrined in the Convention in its assessment.

• The obligation of the administration to give reasons for its decisions

In its assessment of whether the national legislation was contrary to the right of non-discrimination as according to Article 14 ECHR, the court took into account that the tax authority had not provided sufficient reason to justify not allowing male homosexual couples to deduct their IVF treatment expenses from their taxable income. Moreover, the purpose the legislator had in mind for which the relevant provision was included in the Tax law was reflected upon. This was useful to determine whether or not the claimant was meant to fall within its scope.

Elements of judicial dialogue

• Direct dialogue between CJEU/ECtHR and National court (out of preliminary reference procedure)
• Dialogue between high court - lower instance court at national level

• Sejdić and Finci v. Bosnia and Herzegovina
• E.B. v. France
• Guberina v. Croatia
• Petrov v. Bulgaria
• Varnas v. Lithuania

Conform interpretation with the ECHR as interpreted by the ECtHR; the court applied the guidance provided by the ECtHR to determine whether a Convention right had been violated.

To apply the prohibition of discrimination in Article 14 as meant according to the standards set by the ECtHR.

A judgment was made by reasoning in line with the guidelines provided by different ECtHR judgments. Amendment of the legislation has been recommended by the court, as the relevant provision of the Income Tax Law is considered discriminatory under the ECHR. Currently, the matter lies at the discretion of the legislator, it remains unclear whether they will implement any of the recommendations provided by the court.

Additional notes on the decision

Legislation has not been amended yet; the matter is left to the discretion of the legislator, who might choose to do so.