Croatian tax laws breached the EU principle of free movement by effectively removing any financial benefit from the popular student-exchange programme, judges said.
Croatia broke EU law when it effectively taxed an Erasmus bursary intended to help study for a Master’s degree in Finland, the EU’s top court said on Thursday.
The student’s mother made a legal complaint after the €1,800 bursary her child received led to a higher income tax charge – effectively removing any benefit from the EU scheme that’s intended to promote student exchanges.
“If a Member State participates in the Erasmus+ programme, it must ensure that the arrangements for the allocation and taxation of grants intended to support the mobility of beneficiaries of that programme do not create an unjustified restriction on the right to freedom of movement and residence” within the bloc, which Croatia had failed to do, the EU Court of Justice said, after the question was referred by the Constitutional Court in Zagreb.
The student’s mother argued the Erasmus payments should be regarded as a kind of social assistance, and that the higher tax rate she paid meant she was little better off – not least given the higher cost of living for her child in Finland.
According to the European Commission, 16 million people have benefited from the Erasmus programme since it was founded in 1987. The popular scheme allows students to spend part of their studies abroad in another EU university.
According to EU statistics agency Eurostat, around 9% of EU university students participated in some kind of mobility programme abroad in 2022, with Spain the most popular destination.
Planned cuts to the Erasmus programme’s annual budget, in 2024 set at €4.4 billion, led to a protest from MEPs and participants.
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