**Case C-364/08**

**Marc Vandermeir**

**v**

**État belge – SPF Finances**

(Reference for a preliminary ruling from the Tribunal de première instance d’Arlon)

(First subparagraph of Article 104(3) of the Rules of Procedure – Freedom of establishment – Article 43 EC – Freedom to provide services – Article 49 EC – Motor vehicles – Use by a person residing in a Member State of a vehicle registered in another Member State – Taxation of that vehicle in the first Member State)

Summary of the Order

*Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Restrictions*

*(Arts 43 EC and 49 EC)*

Articles 43 EC and 49 EC are to be interpreted as precluding national legislation of one Member State under which a self-employed
person residing in that Member State is required to register there a vehicle leased from a company established in another
Member State, when it is not intended that that vehicle should be used essentially in the first Member State on a permanent
basis and it is not, in fact, used in that manner.

A Member State may impose an obligation to register a motor vehicle leased by a worker residing in that Member State from
a company established in another Member State where that vehicle is intended to be used essentially in the first Member State
on a permanent basis or where it is, in fact, used in that manner.

On the other hand, if those conditions are not satisfied, the connection with one Member State of the vehicle registered in
another Member State is weaker, so that another justification for the restriction in question is necessary. In that regard,
since those conditions do not apply to the use of his vehicle by the worker, the fact that he is self-employed in a Member
State other than that in which he is resident as a natural person who owns a fixed establishment there and not as a director
or manager of a company established there, or the fact that he has leased a vehicle from a company of that Member State himself
and not through an employer who then made a vehicle available to him, cannot justify an obligation to register the vehicle
in that worker’s Member State of residence.

(see paras 32-36, operative part)

ORDER OF THE COURT (Eighth Chamber)

24 October 2008 (*)

(First subparagraph of Article 104(3) of the Rules of Procedure – Freedom of establishment – Article 43 EC – Freedom to provide services – Article 49 EC – Motor vehicles – Use by a person residing in a Member State of a vehicle registered in another Member State – Taxation of that vehicle in the first Member State)

In Case C‐364/08,

REFERENCE for a preliminary ruling under Article 234 EC, from the tribunal de première instance d’Arlon (Belgium), made by
decision of 24 July 2008, received at the Court on 7 August 2008, in the proceedings

**Marc Vandermeir**

v

**État belge – SPF Finances,**

THE COURT (Eighth Chamber),

composed of T. von Danwitz, President of Chamber, R. Silva de Lapuerta (Rapporteur) and E. Juhász, Judges,

Advocate General: M. Poiares Maduro,

Registrar: R. Grass,

the Court proposing to give its decision by reasoned order in accordance with the first subparagraph of Article 104(3) of
its Rules of Procedure,

after hearing the Advocate General,

makes the following

**Order**

1        This reference for a preliminary ruling concerns the interpretation of Articles 43 EC and 49 EC.

2        The reference was made in the context of proceedings between Mr Vandermeir and État Belge – SPF Finances – relating to the
taxation of a vehicle registered and leased in Luxembourg.

**Legal context**

3        According to the referring court, the following national legislation is applicable to the main proceedings.

4        Article 3 of the Code of taxes assimilated to income tax, in the version applicable to the main proceedings (‘the Code’),
which forms part of Title II, ‘Road tax on motor vehicles’, provides:

‘A tax shall be imposed on steam and motor vehicles designed either for the transport of persons or for the road transport
of goods or any other types of items.’

5        Article 6 of the Code provides:

‘Every person who uses one or more vehicles defined in Articles 3 and 4 for his own use ... , whether he is the owner or in
personal possession thereof, whether he has permanent or habitual use thereof under a lease or other agreement, shall be subject
to the tax.’

6        Article 21(1) of the Code reads as follows:

‘The tax shall be payable by the natural or legal person who is or who should be noted on the registration certificate, so
long as a vehicle is or should be entered in the name of that person in the licence register of the vehicle registration department.’

7        Article 5(1)(9) of the Code exempts from the tax ‘motor vehicles used by Belgian residents provided for them by their employer,
where the employer is established abroad and the vehicle is registered there’.

8        Article 94(1)(1) of the Code, which forms part of Title V, ‘Registration Tax’, provides:

‘A tax assimilated to income tax shall be levied in favour of the State on:

(1)      cars ... , as those vehicles are defined in the rules governing the registration of motor vehicles ..., in so far as those vehicles
are or must be issued with a registration plate ... supplied under these rules.’

9        According to Article 99 of the Code, vehicles referred to in Article 94(1)(1) of the Code are to be regarded as put into use
on the public highway in Belgium if they are, or are required to be, entered in the licence register of the Road Traffic Office.

10      Article 108 of the Code, which forms part of Title VI ‘Countervailing excise charge’, states:

‘A countervailing excise charge shall be levied in favour of the State on cars ... with diesel motors.’

11      Article 2 of the Code, which forms part of Title I ‘Common provisions’, allows the Belgian State to impose administrative
fines where a taxpayer infringes the provisions of the Code.

12      Article 3 of the Royal Decree of 20 July 2001 concerning vehicle registration, in the version applicable to the main proceedings,
provides:

‘(1)       Persons residing in Belgium shall register the vehicles that they intend to put into circulation in Belgium with the register
of vehicles referred to in Article 6, even if those vehicles have already been registered abroad.

Persons shall be deemed to be resident in Belgium if they meet one of the following conditions:

(a)      they are entered in the population register of a Belgian commune;

...

(2)      In the cases referred to below, the registration in Belgium of vehicles registered abroad, and put into circulation by persons
mentioned in paragraph 1, is not compulsory for:

...

2.      a vehicle used by a natural person for business purposes and only incidentally in a private capacity and which is provided
by a foreign employer to whom that person is linked by a contract of employment; in such a case, a certificate issued by the
[value added tax] authorities must be carried in the vehicle; the detailed conditions for the use of the vehicle shall be
fixed by the Minister for Finance;

... .’

**The main proceedings and the question referred**

13      Mr Vandermeir resides in Belgium.

14      In 2004, he worked as a freelance journalist in Luxembourg, where he owned an office and where almost all of his clients were
situated. The fact of his establishment in that Member State has been confirmed by the social security inspectorate of Luxembourg.

15      In February 2004, Mr Vandermeir leased from a Luxembourg company a vehicle registered in Luxembourg in the name of that company
with the registration number FM7687.

16      On 10 August 2004, the Belgian Customs Services inspected Mr Vandermeir and drew up a record of breaches of the legislation
relating to vehicle registration.

17      That record was forwarded to the Belgian tax authorities, which, in due course, issued notices of assessment finding Mr Vandermeir
liable to pay road tax, registration tax, a countervailing excise charge and an administrative fine.

18      On 23 December 2005, Mr Vandermeir lodged a complaint against the taxes, charge and fine.

19      As that complaint was dismissed by decision of 26 June 2007, Mr Vandermeir brought proceedings before the referring court.

20      It is in those circumstances that the tribunal de première instance d’Arlon decided to stay proceedings and to refer the following
question to the Court for a preliminary ruling:

‘Do Articles 43 [EC] and/or 49 EC preclude national legislation of one Member State, such as the legislation in question,
which requires a self-employed person residing in that Member State to register his vehicle there, although he carries on
business almost exclusively in a second Member State from a fixed establishment that he owns there, and the vehicle is neither
intended to be essentially used in the first Member State on a permanent basis, nor is in fact so used?’

**The question referred for a preliminary ruling**

21      Pursuant to the first subparagraph of Article 104(3) of the Rules of Procedure, where the answer to a question referred to
the Court for a preliminary ruling may be clearly deduced from existing case-law, the Court may, after hearing the Advocate
General, at any time give its decision by reasoned order.

22      First of all, it should be noted that, apart from certain exceptions not relevant to the main proceedings, taxation of motor
vehicles has not been harmonised at Community level. The Member States are thus free to exercise their powers of taxation
in that area provided that they do so in compliance with Community law (see Case C-451/99 *Cura Anlagen* [2002] ECR I-3193, paragraph 40; Case C‐464/02 *Commission* v *Denmark* [2005] ECR I-7929, paragraph 74; Joined Cases C-151/04 and C-152/04 *Nadin and Nadin-Lux* [2005] ECR I-11203, paragraph 40; Case C-232/03 *Commission* v *Finland*, judgment of 23 February 2006, paragraph 46; order in Case C-242/05 *van de Coevering* [2006] ECR I-5843, paragraph 23; and order of 22 May 2008 in Case C-42/08 *Ilhan*, paragraph 17).

*The existence of restrictions on the freedom of establishment and on freedom to provide services*

23      Under Article 43 EC, restrictions on the freedom of establishment of nationals of a Member State in the territory of another
Member State are prohibited.

24      According to established case-law, all measures which prohibit, hinder or make less attractive the exercise of that freedom
must be regarded as such restrictions (see Case C-55/94 *Gebhard* [1995] ECR I-4165, paragraph 37; Case C-442/02 *CaixaBank France* [2004] ECR I-8961, paragraph 11; and Case C-298/05 *Columbus Container Services* [2007] ECR I-10451, paragraph 34).

25      Even though, according to their wording, the provisions of the EC Treaty concerning freedom of establishment are directed
to ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that
State, they also prohibit the Member State of origin from hindering the establishment in another Member State of one of its
nationals or of a company incorporated under its legislation (see Case C-264/96 *ICI* [1998] ECR I‐4695, paragraph 21; Case C-196/04 *Cadbury Schweppes and Cadbury* *Schweppes Overseas* [2006] ECR I-7995, paragraph 42; and Case C-414/06 *Lidl Belgium* [2008] ECR I-0000, paragraph 19).

26      An obligation to register vehicles, such as that imposed by the legislation in question in the main proceedings on self-employed
persons residing in Belgium, impedes access by those persons to self-employed work in other Member States and is thus liable
to hinder or make less attractive their exercise of freedom of establishment (see, to that effect, *Commission* v *Denmark*, paragraph 46; *Nadin and Nadin-Lux*, paragraphs 36 and 37; and *Commission* v *Finland*, paragraph 40).

27      As a result, that obligation constitutes a restriction on the freedom of establishment prohibited, as a rule, by Article 43
EC.

28      Article 49 EC prohibits restrictions on freedom to provide services within the European Community.

29      According to established case-law, that provision precludes the application of any national legislation which, without objective
justification, impedes a provider of services from actually exercising that freedom or which has the effect of making the
provision of services between Member States more difficult than the provision of services purely within one Member State (see
*Cura Anlagen*, paragraphs 29 and 30, and orders in Case C-435/04 *Leroy* [2006] ECR I-4835, paragraph 11, and *van de Coevering*, paragraphs 19 and 20).

30      An obligation to register vehicles, such as that at issue in the main proceedings, has the effect of making cross-border leasing
activities more difficult (see *Cura Anlagen*, paragraph 37, and order in *Leroy*, paragraph 12).

31      Therefore, that obligation constitutes a restriction within the meaning of Article 49 EC.

*Justification for the restrictions on the freedom of establishment and freedom to provide services*

32      It is evident from the case-law of the Court that a Member State may impose an obligation to register a motor vehicle leased
by a worker residing in that Member State from a company established in another Member State where that vehicle is intended
to be used essentially in the first Member State on a permanent basis or where it is, in fact, used in that manner (see, to
that effect, *Cura Anlagen*, paragraph 42; *Commission* v *Denmark*, paragraphs 75 to 78; *Nadin* *and* *Nadin-Lux*, paragraph 41; and *Commission* v *Finland*, paragraph 47).

33      On the other hand, if those conditions are not satisfied, the connection with one Member State of the vehicle registered in
another Member State is weaker, so that another justification for the restriction in question is necessary (see *Commission* v *Denmark*, paragraph 79; *Commission* v *Finland*, paragraph 48; and order in *van de Coevering*, paragraph 26).

34      With regard to a possible justification for the registration obligation in question in the main proceedings, the Court has
already held, first, that it is contrary to Article 43 EC for the domestic legislation of one Member State to require a self-employed
person residing in that Member State to register there a company vehicle made available to him by the company for which he
works, established in another Member State, when it is not intended that that vehicle should be used essentially in the first
Member State on a permanent basis and it is not, in fact, used in that manner (see *Nadin and Nadin-Lux*, paragraph 55, and order in *Leroy*, paragraph 13) and, secondly, that it is contrary to Article 49 EC for the domestic legislation of one Member State to require
a person residing in that Member State to register there a vehicle rented from a leasing company established in another Member
State, when it is not intended that that vehicle should be used essentially in the first Member State on a permanent basis
and it is not, in fact, used in that manner (see order in *Leroy*, paragraph 14).

35      It follows that, since Mr Vandermeir does not use his vehicle in the conditions set out in paragraph 32 above, the fact that
he is self-employed in Luxembourg as a natural person who owns a fixed establishment in that Member State and not as a director
or manager of a company established in that Member State, or the fact that he has leased a vehicle from a Luxembourg company
himself and not through an employer who then made a vehicle available to him, cannot justify a registration obligation such
as is at issue in the main proceedings.

36      Taking all the above considerations into account, the answer to the question referred must be that Articles 43 EC and 49 EC
are to be interpreted as precluding national legislation of one Member State, such as that in question in the main proceedings,
under which a self-employed person residing in that Member State is required to register there a vehicle leased from a company
established in another Member State, when it is not intended that that vehicle should be used essentially in the first Member
State on a permanent basis and it is not, in fact, used in that manner.

**Costs**

37      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court,
the decision on costs is a matter for that court.

On those grounds, the Court (Eighth Chamber) hereby rules:

**Articles 43 EC and 49 EC are to be interpreted as precluding national legislation of one Member State, such as that in question
in the main proceedings, under which a self-employed person residing in that Member State is required to register there a
vehicle leased from a company established in another Member State, when it is not intended that that vehicle should be used
essentially in the first Member State on a permanent basis and it is not, in fact, used in that manner.**

[Signatures]

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- Language of the case: French.