Judgment of the Court (Fifth Chamber) of 16 January 2025.E. P. v Ministarstvo financija Republike Hrvatske, Samostalni sektor za drugostupanjski upravni postupak.Reference for a preliminary ruling – Citizenship of the Union – Article 21(1) TFEU – Right to move and reside freely within the territory of the Member States – Tax legislation – Income tax – Calculation of the amount of the basic personal allowance for a dependent child who has received mobility support for educational purposes in the context of the Erasmus+ programme – Regulation (EU) No 1288/2013 – Taxation of grants to support the mobility of individuals covered by that regulation – Restriction on freedom of movement – Proportionality.Case C-277/23.

This judgment concerns the interpretation of EU law regarding taxation of Erasmus+ mobility support and its impact on tax benefits for parents of students participating in the program. Here are the key points:Essence of the act:
The Court ruled that EU member states cannot include Erasmus+ mobility support received by students when calculating their parents’ tax allowances in a way that reduces those allowances. Such practice violates EU citizens’ freedom of movement rights under Articles 20 and 21 TFEU.Structure and main provisions:
The judgment analyzes several key aspects:- The relationship between national tax competence and EU law requirements- The scope of EU citizens’ freedom of movement rights- The objectives of the Erasmus+ program- The proportionality of national tax measures affecting student mobilityKey provisions for practical use:
1. Member states cannot treat Erasmus+ mobility support as income that reduces parents’ tax benefits for dependent children2. Such tax treatment constitutes an unjustified restriction on freedom of movement3. Erasmus+ support is meant to cover additional costs of studying abroad and does not increase parents’ tax-paying capacity4. Both students and their taxpayer parents can rely on EU freedom of movement rights in challenging such tax measuresThe judgment is particularly relevant for Ukraine as it protects the rights of parents whose children participate in EU educational mobility programs and establishes important principles regarding taxation of EU program benefits.

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