Case C‑249/15

Wind 1014 GmbH and Kurt Daell

v

Skatteministeriet

(Request for a preliminary ruling from the Østre Landsret)

(References for a preliminary ruling — Article 56 TFEU — Freedom to provide services — Restrictions — Motor vehicle leased by a resident of one Member State from a leasing company established in another Member State — Registration tax calculated proportionately to the duration of use of the vehicle — Requirement of approval from the national tax authorities before use — Justification — Prevention of circumvention of tax rules and fraud or abuse — Safeguarding States’ powers of taxation — Proportionality)

Summary — Judgment of the Court (Ninth Chamber), 18 January 2018

Freedom to provide services — Restrictions — Tax legislation — Motor vehicle leased by a resident of one Member State from a leasing company established in another Member State — Registration tax calculated proportionately to the duration of use of the vehicle — National legislation making the use of the vehicle subject, in return for payment of the tax, to prior approval by the tax authorities — Legislation making the immediate use of the vehicle subject to the payment of the full amount of the registration tax — Restriction — Justification — Circumvention or abusive application of taxation rules — None — Breach of principle of proportionality

(Art. 56 TFEU)

Article 56 TFEU must be interpreted as precluding a Member State’s legislation and administrative practice, such as those at issue in the main proceedings, under which:

– use by a resident in that Member State of a vehicle leased from a leasing company established in another Member State for the purpose of temporary use of that vehicle in the first Member State, in return for payment of a proportionate registration tax calculated proportionately to the duration of that use, is subject to prior approval of that payment by that Member State’s tax authorities, without which the vehicle may not, in principle, be used in its territory, and

– the possibility of making immediate use of such a vehicle in that first Member State whilst the taxpayer’s application to pay a proportionate registration tax on that vehicle based on the duration of use in that first Member State is being processed, is subject to advance payment of the full amount of registration tax, with provision made for repayment of the surplus paid, plus interest, if and when the taxpayer is eventually authorised by the tax authorities to pay the registration tax calculated proportionately.

In the case of the prior approval scheme, as evidenced by paragraphs 45, 46 and 50 of this judgment, it is aimed at preventing circumvention of the taxation rules as well as fraud or abuse which, according to the Court’s case-law, is an objective that may justify a restriction on the freedom to provide services.

It should be noted that a prior approval scheme, such as that at issue in the main proceedings, may be held to be suitable for ensuring attainment of the objective referred to in the preceding paragraph. In the present case, in the course of the administrative procedure leading, where successful, to prior approval, the tax authorities verify whether the conditions of application of the proportionate tax are met, including the duration of the leasing contract and the identity of the actual owner of the vehicle in question. That check enables the amount of the tax to be calculated according to the duration of the lease in question and, therefore, the planned period of use of the vehicle in Danish territory. In that regard, the Court’s case-law is to the effect that, in order to be consistent with the principle of proportionality, the national legislation laying down the detailed rules for calculating such a tax must take into account the period of use of a vehicle leased from a company established in another Member State in the territory of the Member State in question (see, to that effect, judgment of 19 September 2017, Commission v Ireland (C‑552/15, EU:C:2017:698, paragraph 95 and the case-law cited).

However, the fact that a resident of Denmark uses temporarily in Danish territory a vehicle leased from a leasing company established in another Member State does not by itself provide the basis for a general presumption that there is an abusive practice and justify a measure undermining the exercise of a fundamental freedom guaranteed by the FEU Treaty (see, by analogy, judgment of 4 December 2008, Jobra, C‑330/07, EU:C:2008:685, paragraph 37 and the case-law cited).

As evidenced by paragraph 25 of this judgment, under the Danish legislation and administrative practice, the possibility of making immediate use of a vehicle leased by a resident of Denmark from a company established in another Member State for the purpose of temporary use of that vehicle in Danish territory is subject to payment of the full amount of registration tax, with provision made for subsequent repayment of any surplus paid, plus interest.

It should be observed in that regard that that possibility, provided for under the Danish legislation and administrative practice, takes no account of the duration of use of the vehicle in question in Denmark.

As rightly observed by the Commission at the hearing, a national measure under which the use of vehicles leased by residents of the Member State in question from a leasing company established in another Member State for the purpose of temporary use of those vehicles in the first Member State is permitted upon payment of a tax calculated proportionately to the duration of use of such a vehicle in the first Member State, upon notification of the lease to the tax authorities, with the contract stating, as applicable, information such as that required under Article 3b(9) of the Law on Registration Tax for Motor Vehicles and, subject to a subsequent verification by those authorities, of compliance with the conditions of application of that tax, is a less restrictive measure than those resulting from a Member State’s legislation and administrative practice, such as described in paragraphs 22 to 25 of this judgment. As part of such a measure, the Member State in question may also limit the validity of the registration to the duration of the leasing contract.

Such measures comprising, where necessary, in proven cases of circumvention of the tax rules or abuse, an obligation for the resident of Denmark, alone or, as the case may be, jointly and severally with the relevant leasing company, to pay the difference between the proportionate registration tax registration and the full amount of the registration tax, and also appropriate criminal sanctions, give the Member State in question the means to prevent and combat the risk referred to in paragraph 46 of this judgment.

Accordingly, the conclusion is that a Member State’s legislation and administrative practice, such as described in paragraphs 22 to 25 of this judgment, go beyond what is necessary to achieve the objectives pursued by that legislation and practice.

(see paras 51-53, 55-57, 59, 60, operative part)