Case C-387/01

Harald Weigel and Ingrid Weigel

v

Finanzlandesdirektion für Vorarlberg

(Reference for a preliminary ruling from the Verwaltungsgerichtshof)

(Freedom of movement for workers – Importation of a motor vehicle – Standard fuel consumption tax (‘Normverbrauchsabgabe’) – Customs duties and charges having equivalent effect – Discriminatory taxation – Sixth VAT Directive – Turnover tax)

Summary of the Judgment

1. Tax provisions – Harmonisation of laws – Tax exemptions in respect of the permanent import of the personal property of individuals – Directive 83/183 – Scope – Tax on consumption charged on registration of imported second-hand motor vehicles – Excluded

(Council Directive 83/183, Art. 1)

2. Freedom of movement for persons – Workers – Equal treatment – Tax on registration of imported second-hand motor vehicles – Whether permissible

(Arts 12 EC and 39 EC)

3. Tax provisions – Internal taxation – Tax on registration of imported second-hand motor vehicles – Classified as internal taxation and not as a charge having equivalent effect to a customs duty

(Arts 23 EC, 25 EC and 90 EC)

4. Tax provisions – Internal taxation – Tax on registration of imported second-hand motor vehicles – Amount of the tax not exceeding the residual tax incorporated in the value of similar vehicles in the national market – Whether permissible – Additional tax – Not permissible

(Art. 90 EC)

1. Directive 83/183 on tax exemptions applicable to permanent imports from a Member State of the personal property of individuals does not preclude the imposition of a tax on consumption charged on registration of imported second-hand motor vehicles on a private individual from one Member State who, on taking up residence in another Member State because of a change of place of work, imports his or her car into the latter State, since the operative event attracting that tax is first-time registration in the State, which is not necessarily linked to the act of importation. Thus such a tax must be regarded as falling outside the scope of the exemption in Article 1(1) of the directive.

(see paras 47, 49)

2. Articles 39 EC and 12 EC do not preclude the imposition of a consumption tax charged on registration of imported second-hand motor vehicles on a private individual from one Member State who on taking up residence in another Member State because of a change of place of work imports his or her car into the latter State.

Although it is true that such a tax is likely to have a negative bearing on the decision of migrant workers to exercise their right to freedom of movement, the Treaty offers, however, no guarantee to a worker that transferring his activities to a Member State other than the one in which he previously resided will be neutral as regards taxation. Given the disparities in the legislation of the Member States in this area, such a transfer may be to the worker’s advantage in terms of indirect taxation or not, according to circumstance. It follows that, in principle, any disadvantage, by comparison with the situation in which the worker pursued his activities prior to the transfer, is not contrary to Article 39 EC if the legislation in question does not place that worker at a disadvantage as compared with those who were already subject to it.

(see paras 54-55, 60, operative part 1)

3. A tax on consumption charged on registration of imported second-hand motor vehicles constitutes internal taxation of which the compatibility with Community law must be examined not under Articles 23 EC and 25 EC, relating to charges having equivalent effect, but under Article 90 EC relating to internal taxation, since it is manifestly of a fiscal nature and is charged not by reason of the vehicle crossing the border of the Member State which established it, but in view of other operative events, of which first-time registration of the vehicle in that State is one, and thus forms part of a general system of internal dues applying systematically to categories of products.

(see paras 64-65, 81, operative part 2)

4. Article 90 EC must be interpreted as meaning that it does not preclude a tax on consumption charged on registration of imported second-hand motor vehicles to the extent that the charges to that tax precisely reflect the actual depreciation of second-hand vehicles imported by private individuals and produce the desired outcome that the tax charged on imported second-hand vehicles in no case exceeds the amount of the residual tax incorporated in the value of similar second-hand vehicles already registered in the State.

However, that obligation precludes the imposition, in the case of the importation by a private individual of a second-hand car from another Member State, of a 20% surcharge of the tax in question since that 20% surcharge is generally assessed only on the base tax charged on imported second-hand vehicles and applies only in exceptional circumstances to that charged on purely domestic transactions.

(see paras 81, 87, 89 operative part 3-4)

JUDGMENT OF THE COURT (Sixth Chamber) 29 April 2004 (1)

(Free movement of workers – Importation of a motor vehicle – Standard fuel consumption tax (‘Normverbrauchsabgabe’) – Customs duties and charges having equivalent effect – Discriminatory taxation – Sixth VAT Directive – Turnover tax)

In Case C-387/01,

REFERENCE to the Court under Article 234 EC by the Verwaltungsgerichtshof (Austria) for a preliminary ruling in the proceedings pending before that court between

and

on the interpretation of Articles 12 EC, 23 EC, 25 EC, 39 EC and 90 EC and Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), as amended by Council Directive 91/680/EEC of 16 December 1991 supplementing the common system of value added tax and amending Directive 77/388/EEC with a view to the abolition of fiscal frontiers (OJ 1991 L 376, p. 1),

THE COURT (Sixth Chamber),,

composed of: V. Skouris, acting for the President of the Sixth Chamber, C. Gulmann, J.-P. Puissochet, R. Schintgen and N. Colneric (Rapporteur), Judges,

Advocate General: A. Tizzano,

after considering the written observations submitted on behalf of:

after hearing the oral observations of Mr and Mrs Weigel, represented by W. Weh and W. Simmer, Rechtsanwalt; of the Austrian Government, represented by F. Sutter, acting as Agent; of the Danish Government, represented by J. Molde; of the Finnish Government, represented by T. Pynnä, acting as Agent; and of the Commission, represented by K. Gross, at the hearing on 10 April 2003,

after hearing the Opinion of the Avocate General at the sitting on 3 July 2003,

gives the following

The provisions of the EC Treaty

‘Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.’

‘The Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.’

‘Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature’.

‘1.

2.

3.(a) to accept offers of employment actually made;

(b) to move freely within the territory of Member States for this purpose;

(c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action;

(d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in implementing regulations to be drawn up by the Commission.

4.‘No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.’

Secondary law

‘The following shall be subject to value added tax:

1. the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such;

2. the importation of goods’.

‘Without prejudice to other Community provisions, in particular those laid down in the Community provisions in force relating to the general arrangements for the holding, movement and monitoring of products subject to excise duty, this Directive shall not prevent a Member State from maintaining or introducing taxes on insurance contracts, taxes on betting and gambling, excise duties, stamp duties and, more generally, any taxes, duties or charges which cannot be characterised as turnover taxes, provided however that those taxes, duties or charges do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers’.

‘1. Every Member State shall, subject to the conditions and in the cases hereinafter set out, exempt personal property imported permanently from another Member State by private individuals from turnover tax, excise duty and other consumption taxes which normally apply to such property.

2. Specific and/or periodical duties and taxes connected with the use of such property within the country, such as for instance motor vehicle registration fees, road taxes and television licences, are not covered by this Directive’.

‘The following transactions shall be subject to the NoVA:

…’.

‘(1)

(2)

(3)

‘In the case of an intra-Community acquisition of a vehicle from an authorised dealer, the purchase price shall be deemed to be the fair market value of the vehicle.’

‘5.2 – Fair market value:

In all cases where the charge to tax does not arise as a result of a supply (e.g. leasing, private import, change of circumstances through change in use, transfer to personal use), the chargeable value is the fair market value exclusive of VAT and NoVA (see Paragraph 5(3) of the NoVAG). The fair market value is determined in accordance with Paragraph 10 of the BewG and takes into account the taxable person’s position in the supply chain … .

The following computation methods apply:

5.2.1 Intra-community import:

Fair market value is based on the domestic Eurotax valuations. It is the mean of the dealer’s purchase and selling price (excluding VAT and NoVA). That mean corresponds, broadly speaking, to the price that the imported vehicle would achieve if sold privately in the national territory (= the private sale price within the meaning of Paragraph 10 of the BewG). The fair market value may differ from that value in the specific circumstances, because of differences in the terms of warranty coverage and after-sales service, repairs that may be required, features, and wear-and-tear. The price paid for the car in its country of origin may be taken as the fair market value for NoVA purposes if it is within 20% of the Eurotax mean valuation. If it lies outside that range, the taxable person has to substantiate the reason for the discrepancy’.

‘(1) …

(2) The rate for other motor vehicles shall be 2% multiplied by the fuel consumption in litres reduced by 3 litres (2 litres in the case of diesel vehicles), to be measured by overall consumption on the MVEG (Motor Vehicles Emissions Group) Cycle in accordance with Directive 80/1268, as amended by Directive 93/116. Where average consumption is not more than 3 litres (2 litres in the case of diesel vehicles) the rate shall be 0%.

(3) The resulting rates shall be rounded up or down to the nearest whole percentage. The rate shall not exceed 16% of the basis of assessment.

…

(6) The tax shall be increased by 20% where the NoVA is not included in the chargeable value for VAT purposes’.

The first part of the first question

– Directive 83/183

– Article 39 EC

– Article 12 EC

The first part of the second question

– Articles 23 EC and 25 EC

– Article 90 EC

The second part of the second question

– Articles 23 EC and 25 EC

– Article 90 EC

The second part of the first question and the third question

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Verwaltungsgerichtshof by order of 20 September 2001, hereby rules:

Skouris

Gulmann

Puissochet

Schintgen

Colneric

Delivered in open court in Luxembourg on 29 April 2004.

R. Grass

V. Skouris

Registrar

President