As early as 2000, Italy and France agreed that, for treaty purposes, a pension paid by the sector-specific pension fund for the electricity and gas sector (CNIEG) qualifies as a social security pension. As a result, such pensions are taxable in both countries.
On 1 November 2023, EDF (Électricité de France) became fully owned by the French State and is now considered a company of strategic national importance.
Against this background, a French resident considering relocating to Italy raised the question whether this change in ownership could lead to a requalification of the pension as a government pension. If so, the taxing rights would shift, and the pension would become taxable exclusively in France rather than in both states.
The Italian tax authorities reject this interpretation. They emphasize that the treaty contains an explicit agreement between the contracting states that CNIEG pensions qualify as social security benefits. This agreement remains binding unless both states decide to amend it.
In addition, the authorities point out that the underlying employment was largely carried out for a private-sector employer, meaning that the pension rights were accrued in a private-law context.
Finally, even following the nationalization, the government pension provision of the treaty does not apply. That provision generally includes an exception where the public employer carries out a commercial activity. EDF continues to engage in such commercial activities, which prevents the pension from being treated as a government pension.
What lessons can be drawn for a Belgian context? Comparable questions may arise in Belgium, for instance in relation to the Dexia–Belfius restructuring in the past, or potentially in the context of Engie’s nuclear activities in the future.
In such cases, attention should be paid in particular to the following elements:
- whether the treaty contains an explicit qualification agreed upon by the contracting states;
- whether the government pension provision includes an exception for state-owned entities performing commercial activities; and
- failing that, whether the qualification at the time of payment prevails over the qualification at the time of accrual.