Judgment;Summary — ECLI:EU:C:2023:888
Date: 2023-11-16
Language of the case: Portuguese
Court formation: Eighth Chamber
Subject matter: Taxation
Procedure: Reference for a preliminary ruling
Origin: Portugal

Summary C-349/22 – 1 
Case C-349/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
31 May 2022 
Referring court: 
Tribunal Arbitral Tributário (Centro de Arbitragem 
Administrativa – CAAD) (Portugal) 
Date of the decision to refer: 
23 May 2022 
Applicant: 
NM 
Defendant: 
Autoridade Tributária e Aduaneira 
  
Subject matter of the main proceedings 
The request for a preliminary ruling concerns a challenge to a calculation of the 
imposto sobre veículos (vehicle tax; ‘ISV’). The applicant is requesting that ISV 
be charged on his second-hand plug-in hybrid vehicle, first registered in 2018 in 
Germany, at the intermediate rate of 25% rather than at the 100% rate, which is 
the rate that was applied. In 2018, the date of the vehicle’s first registration in 
another Member State, his vehicle satisfied the requirements laid down in 
Portuguese legislation to benefit from the intermediate rate of 25%. In that year, 
vehicles with the same characteristics as the applicant’s vehicle which were 
registered for the first time in Portugal were taxed at that rate. From 2021, the 
requirements in order to qualify for the intermediate rate of 25% were amended, 
and the applicant’s vehicle ceased to satisfy them. In essence, the question is 
whether, by establishing that the taxable event is the release for consumption in 
Portugal rather than the date of first registration, national legislation accords 
different treatment to vehicles registered in other Member States and is therefore 
contrary to Article 110 TFEU. 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-349/22 
 
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Subject matter and legal basis of the request 
Article 267 TFEU – Contradiction between Article 8(1)(d) of the Código do 
Imposto sobre Veículos (Code on Vehicle Tax; ‘CISV’) and Article 110 TFEU 
Question referred for a preliminary ruling 
Does Article 110 TFEU preclude a situation in which a rule of national law, such 
as Article 8(1)(d) of the CISV [(Código do Imposto Sobre Veículos; Code on 
Vehicle Tax)], which provides that private vehicles that satisfy certain 
environmental criteria are to be subject to tax on the release for consumption of 
motor vehicles ([imposto sobre veículos;] ISV) at a reduced rate of 25%, remains 
in force and, under the version of the legislation in force from 1 January 2021 – 
which is more restrictive than the version previously in force – applies both to 
new Portuguese vehicles and to second-hand vehicles from other Member States 
of the European Union which are registered for the first time in Portugal from that 
date onwards, thereby providing the same tax treatment for those vehicles but 
giving rise to what could be considered unequal treatment between second-hand 
vehicles which have been in use for the same length of time and which satisfy the 
less demanding environmental criteria that previously applied but which do not 
satisfy the requirements in the new law, under which treatment is dependent on 
whether (a) they were originally sold and registered in Portugal before the date on 
which the new version of the law came into force, in which case they will have 
benefited from the reduced tax rate of 25%, which is likely to be reflected in the 
purchase price of second-hand vehicles; or (b) they were registered in another 
Member State while the previous version of the law was in force and were 
released for consumption in Portugal after that date, in which case they are subject 
to tax at the rate of 100%? 
Provisions of national law relied on 
Lei No 22-A/2007, de 29 de junho de 2007, que aprova o Código do Imposto 
sobre Veículos e o Código do Imposto Único de Circulação (Law No 22-A/2007 
of 29 June 2007 approving the Code on Vehicle Tax and the Code on Annual 
Road Tax) (Diário da República No 124/2007, 1st Supplement, Series I) 
‘Article 4. Taxable amount 
1. Vehicle tax is of a specific nature, and the taxable amount comprises the 
elements listed below, which are recorded in the relevant certificate of conformity: 
(a) for passenger vehicles, goods vehicles or mixed-use vehicles taxed in 
accordance with Table A: the cubic capacity, the particulate emission level, where 
applicable, and the level of carbon dioxide (CO2) emissions measured under the 
combined test cycle, with tests being performed in accordance with the New 
European Driving Cycle (NEDC) or the Worldwide Harmonized Light Vehicle 
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Test Procedure (WLTP), depending on the testing system used for the purposes of 
the technical approval of the vehicle; …’ 
‘Article 5. Taxable event 
1. The taxable event is the manufacture, assembly, admission or importation of 
vehicles subject to tax in national territory which must be registered in Portugal. 
[…] 
3. For the purposes of this Code: 
(a) “admission” means the entry into national territory of a vehicle which comes 
from another Member State of the European Union or is released for free 
circulation in that State; …’ 
‘Article 6. Accrual 
1. In the circumstances established in paragraph 1 of the previous article, the 
tax accrues on the release for consumption, which is deemed to occur: … 
(b) when the vehicle customs declaration is submitted by private individuals. … 
3. The applicable rate will be the rate that applies at the point when the tax 
accrues.’ 
Article 7. General rates – motor vehicles 
1. Table A, below, sets out the tax rates, which are based on the cubic capacity 
and the environmental component; it applies to the following vehicles: 
(a) passenger motor vehicles; …’ 
In the version introduced by Law No 82-D/2014 of 31 December 2014, which 
applied from 1 January 2015 to 31 December 2020, Article 8(1)(d) of the CISV 
was worded as follows: 
‘Article 8. Intermediate rates – motor vehicles 
1 – An intermediate rate – calculated by applying the percentages stated below to 
the amount arrived at by applying Table A in paragraph 1 of the previous article – 
will apply to the following vehicles: … 
(d) 25%, for private vehicles equipped with plug-in hybrid engines where the 
battery can be charged from the electricity network and the vehicle has a 
minimum range of 25 km in electric mode. …’ 
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In the version introduced by Law No 75-B/2020 of 31 December 2020, which 
applies from 1 January 2021, Article 8(1)(d) of the CISV was amended to read as 
follows: 
‘Article 8. Intermediate rates – motor vehicles 
1 – An intermediate rate – calculated by applying the percentages stated below to 
the amount arrived at by applying Table A in paragraph 1 of the previous article – 
will apply to the following vehicles: … 
(d) 25%, for private vehicles equipped with plug-in hybrid engines where the 
battery can be charged from the electricity network and the vehicle has a 
minimum range of 50 km in electric mode and official emissions of less than 50 g 
CO2/km. …’ 
‘Article 11. Rates – second-hand vehicles 
1. The tax on vehicles with a permanent EU registration certificate issued by 
other Member States of the European Union will be calculated provisionally in 
accordance with the rules of this Code; the percentage reductions listed in Table D 
will be applied to the amount of tax calculated in accordance with the applicable 
table, having regard to the cubic capacity and the environmental component and 
including the increment established in Article 7(3), with the percentages being 
linked to average depreciation in the value of vehicles in the national market and 
average remaining vehicle lifetime respectively: 
Table D […]’ 
Succinct presentation of the facts and procedure in the main proceedings 
1 The applicant submitted a Declaração Aduaneira de Veículo (Vehicle Customs 
Declaration; ‘DAV’) to the customs services in Leixões (Portugal). The 
declaration related to a hybrid private vehicle from Germany which was registered 
for the first time in that Member State on 14 September 2018. 
2 The customs services in Leixões assessed the amount of ISV due as being 
EUR 2 928.28, which was calculated by applying the tax at the rate of 100%; the 
applicant paid the amount in full. 
3 The version of Article 8(1)(d) of the CISV that was applied was the version 
introduced by Law No 5-B/2020 of 31 December 2020 (‘the version of Article 8 
in force from 2021’), under which the 25% intermediate rate applies to private 
vehicles equipped with plug-in hybrid engines where the battery can be charged 
from the electricity network and the vehicle has a minimum range of 50 km in 
electric mode and official emissions of less than 50 g CO2/km. 
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4 The applicant requested an arbitral tribunal. He argued before the tribunal that the 
version of Article 8(1)(d) of the CISV that should have been applied was the 
version introduced by Law No 82-D/2014 of 31 December 2014 (‘the version of 
Article 8 in force until 2020’), given that this was the version that was in force 
when his vehicle was registered for the first time in Germany in 2018. 
The essential arguments of the parties in the main proceedings 
5 According to the applicant, when ISV is calculated in accordance with the 
version of Article 8 in force from 2021, this gives rise to differential treatment 
between vehicles originally registered in another Member State of the European 
Union and subsequently introduced into Portugal and vehicles that were originally 
purchased and registered in Portugal, with vehicles purchased in other Member 
States being taxed more heavily, contrary to Article 110 TFEU. 
6 If the applicant had purchased the same second-hand vehicle in Portugal, the 
vehicle would not have been subject to ISV at 100%, since the purchase price 
would already include the ISV paid in 2018 when the vehicle was imported as 
new, which would have been calculated in accordance with the legislation in force 
at the time. 
7 According to the applicant, where the ISV is calculated in accordance with the 
rule which came into force in January 2021, this gives rise to a higher tax charge 
which is more than the residual amount of the tax included in the value of second-
hand vehicles already registered in Portugal, meaning that the internal taxation 
gives rise to unfavourable treatment for second-hand vehicles from other Member 
States as compared with those sold in Portugal. 
8 The applicant drew particular attention to the fact that the Court of Justice has 
already ruled this to be illegal in respect of annual road tax, in its Order of 
17 April 2018, Dos Santos, C-640/17, EU:C:2018:275. With regard to Portugal, 
the applicant points to the judgments of 22 February 2001, Gomes Valente, 
C-393/98, EU:C:2001:109, and of 9 March 1995, Nunes Tadeu, C-345/93, 
EU:C:1995:66. 
9 According to the applicant, it is therefore necessary to clarify whether the 
calculation of ISV, in which his vehicle was treated in the same way as a new 
vehicle registered for the first time in 2021, infringes Article 110 TFEU by 
discriminating against second-hand vehicles from another Member State admitted 
into Portuguese territory, as compared with vehicles registered and sold in 
Portugal. 
10 The defendant states that the ISV is an internal consumption tax of a specific 
nature levied on vehicles, which accrues when vehicles which are subject to tax in 
national territory and must be registered in Portugal are released for consumption. 
Therefore it is not a tax that is harmonised across the European Union. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-349/22 
 
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11 Given that vehicle taxation is not harmonised, and differs considerably from one 
Member State to another, it is for Member States to administer the taxation of 
unregistered new vehicles or second-hand vehicles with foreign registration in 
accordance with various criteria designed to produce different outcomes, 
particularly as regards environmental considerations, tax revenues and road safety. 
Member States may freely exercise their jurisdiction over taxation and, in this 
context, the admission of vehicles into Portugal is subject to their being taxed and 
obtaining a national registration certificate. 
12 According to Article 5(1) of the CISV, the taxable event is the admission into 
national territory of taxable vehicles which must be registered in Portugal. 
13 In addition, under Article 6(1)(b) of the CISV, the ISV will accrue on release for 
consumption, which occurs when the individual submits the DAV and, under 
paragraph 3 of that article, the applicable rate will be the rate that applies on the 
accrual date. 
14 The requirement to submit the DAV is an obligation which is prompted by the 
occurrence of the taxable event (the admission of the vehicle into national 
territory), and the tax accrues on release for consumption. Therefore, release for 
consumption in another Member State cannot be considered to give rise to the 
occurrence of a taxable event within the meaning of Article 5(1) of the CISV. 
15 It is only the entry of the vehicle into national territory which can constitute a 
taxable event and this, via the requirement to submit the DAV, determines the rate 
of tax to be paid. The DAV made on the release for consumption is therefore a 
sine qua non in determining the taxable amount and calculating the tax due, with 
the result that the tax rate that is applied is the rate in force at the point when the 
tax accrues. 
16 Although the vehicle in question has a plug-in hybrid engine, it does not satisfy 
the current cumulative legislative requirements of a minimum range of 50 km in 
electric mode and official CO2 emissions of less than 50 g/km, since the emissions 
recorded by the vehicle are 52 g/km. 
17 The vehicle was released for consumption via a DAV which was accepted in 
2021, at which time the version of Article 8 in force from 2021 applied. 
18 Given that tax laws apply to events that occur after those laws come into force, it 
is clear that it is that version of Article 8 of the CISV which applies to the taxable 
event in question. 
19 An examination of the DAV shows that the percentage reductions that are 
currently provided for were applied to the tax, taking into account the cubic 
capacity and the environmental component; those percentages are linked to the 
average depreciation in the value of vehicles in the national market and average 
remaining vehicle lifetime. Thus, the ISV payable on the vehicle was reduced to 
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reflect the years of use between the date of the first registration and the deadline 
for submitting the relevant DAV. 
20 For vehicles already registered in national territory, the amount of tax paid is 
included in their value. Therefore, when a vehicle registered in Portugal is sold 
second hand, its market value, which includes the residual amount of ISV, equates 
to a percentage of its original value which is determined by the vehicle’s 
depreciation. 
21 An infringement of Article 110 TFEU only occurs if the amount of tax payable on 
a second-hand vehicle from another Member State is higher than the residual 
amount of the tax included in the value of similar second-hand vehicles already 
registered in national territory. This means that the tax levied on second-hand 
vehicles from other Member States when they are registered in the admitting 
Member State to enable the vehicle to enter circulation must reflect the length of 
use; in other words, the taxation of second-hand vehicles from other Member 
States must be based on the same criteria used in the taxation of new vehicles, 
adjusted to take account of the length of use or vehicle depreciation. 
22 The [defendant] also maintains that there is no judgment by the Court of Justice 
which states that the definition of the taxable event in national legislation infringes 
Article 110 TFEU, nor is that concept defined in EU law. 
23 Article 5(1) of the CISV applies to all operators and individuals who are liable for 
ISV in Portugal, and applies equally to the taxation of domestic goods and goods 
from other Member States; alongside the admission or entry of a vehicle from 
another Member State, manufacture and assembly in national territory are also 
classed as taxable events. Therefore there is no discriminatory effect because, 
irrespective of which taxable event is concerned, vehicles are taxed in accordance 
with Article 7 and, for second-hand vehicles, the reductions in Table D of 
Article 11(1) of the CISV apply. 
24 Nor is there any discrimination or barrier to the free movement of goods based on 
whether or not the tax benefit provided for in the CISV applies, because Article 8 
applies in the same way to all vehicles, irrespective of whether the vehicle is from 
another Member State or a domestic vehicle, and therefore the application of the 
reduced rate is not solely dependent on the vehicle being produced domestically. 
25 The defendant states that, for this reason, it does not consider that the national 
measure is contrary to the principles of the proper functioning of the internal 
market and the free movement of goods. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
26 By way of background to its position, the referring court draws attention to the 
national case-law and the case-law of the Court of Justice on ISV calculations 
performed in accordance with the previous Article 11 of the CISV governing the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-349/22 
 
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tax levied on vehicles with a definitive registration issued in other Member States 
of the European Union. That article was amended to introduce percentage 
reductions by year, starting from first registration, in order to reflect the 
environmental component. The amendment was introduced in response to the 
judgments of the Court of Justice in Cases C-200/15 and C-169/20. 
27 In the view of the referring court, while Article 8(1)(d) of the CISV appears to 
differ from Article 11 of the CISV, they are not different in absolute terms, given 
that the issues concerned are not mutually exclusive. 
28 Over the course of the various legislative amendments, the environmental 
component has come to reflect the length of use of second-hand vehicles from 
other Member States which are released for consumption in Portugal, thereby 
solving the issue of the breach of Article 110 TFEU by Article 11 of the CISV. 
The negative discrimination enshrined in this article when compared with the 
treatment of comparable second-hand vehicles purchased in the national market 
was eliminated, taking into account the fact that the purchase price of the latter 
vehicles includes the effect of depreciation over the period of use, since the price 
includes the ISV paid. 
29 The intermediate rates provided for in Article 8 operate by means of a specific 
percentage reduction in the ISV which is calculated, first, based on the type of 
vehicle, and then, where a second-hand vehicle from another Member State is 
released for consumption in Portugal, by applying Table D of Article [11] of the 
CISV in which, for ISV calculation purposes, the environmental component and 
the cubic capacity take into account the length of use. 
30 The referring court considers that it is therefore important to determine whether, 
in the light of the way in which these legal regimes have been applied over time, 
there continues to be a breach of Article 110 TFEU if the amount of tax payable 
on a second-hand vehicle from another Member State exceeds the residual amount 
of the same tax which is included in the value of similar second-hand vehicles 
already registered in national territory.