A French tax resident received in 2016 a. AOW allowance (Dutch national state pension) of € 13,676 taxed in France and b) a pension of € 31,959 taxed in the Netherlands (source state).
The income taxable in France is too low and does not exceed the tax-free amounts and therefore the resident could not make use of tax facilities (in this case: tax deduction of mortgage interest, alimony payment, health costs). In such case, the Netherlands as source must (also) provide the tax facilities. So the deductions were allowed and a part of the Dutch tax credits.
This Court’s verdict is based on EU law (“Schumacker case”) and not on Dutch tax law since this was more restrictive to allow deductions.
Source (in Dutch):