WRITTEN QUESTION P-2261/02

by Ari Vatanen (PPE-DE) to the Commission

(17 July 2002)

Subject: Leasing of motor vehicles: Does Case C-451/99 mean that Finland is likewise not permitted to levy motor vehicle tax other than for the period of the lease?

Case C-451/99 of the Court of Justice of the European Communities concerned the following matter: an Austrian business brought a leased motor vehicle into Austria from Germany, but was required to reregister the vehicle within three days and pay the environmentally based motor vehicle tax in its entirety. Giving judgment on 21 March 2002, the Court of Justice ruled that an EU Member State must not prevent the conclusion of a lease contract with a leasing company operating in another Member State. A Member State would be preventing such leasing if it required a roadworthiness test to be performed in the country of use when the vehicle had already undergone such testing in the Member State where the leasing company was established. It would be preventing such leasing if it compelled the lessee to take out vehicle insurance in the country of use. And above all, it would be preventing such leasing if it levied vehicle tax in full even though the vehicle might only remain in the country for a short time.

The Finnish customs service requires leased vehicles to be registered in Finland from the first day, and vehicle tax to be paid in full, irrespective of the period for which the vehicle is being brought into Finland. The customs service also considers that Case C-451/99 cannot be applied to Finland, because in its opinion Austria's tax system differs from Finland's. The Finnish State relies on the assertion that in Austria tax is based not only on the purchase price of the vehicle but also on its fuel consumption. However, this fact surely cannot be of any significance, since the main point is that in both Finland and Austria a vehicle can only be registered after a large one-off payment of tax has been made.

However, all that matters from the point of view of the functioning of the common market and the interests of EU citizens is that preventing trade by means of discriminatory taxation is prohibited, irrespective of the basis on which this is done.

Is the difference between the vehicle taxation systems in Finland and Austria essential for the purpose of the application of the case law in Case C-451/99?

Is the Finnish customs service violating any prohibition by refusing to apply the legal principle demonstrated by Case C-451/99?

Can Finland require motor vehicle tax to be paid in full on a leased vehicle which is not intended to remain in Finland throughout its period of use?

Answer given by Mr Prodi on behalf of the Commission

(24 September 2002)

Reference is made by the Honourable Member to the judgment of the Court of Justice of the European Communities of 21 March 2002 in case C-451/99. In that case, the Handelsgericht Wien (Austria) requested a preliminary ruling on a question on the interpretation of Articles 49 to 55 and Article 28

of the EC Treaty. That question was raised in proceedings between Cura Anlagen GmbH, a company established in Austria, and Auto Service Leasing GmbH, a company established in Germany and without a place of business in Austria, concerning the performance of a vehicle leasing contract concluded between those two companies.

The legislation concerning taxation of motor vehicles has not been harmonised. The taxation of cars is different in many respects in Austria and Finland and in depth research would be needed to establish the differences between the two systems. However, it may be noted that the car taxation in Finland does not vary on the basis of how long the vehicle is registered in Finland. Likewise the Austrian Normverbrauchsabgabe does not change according to the duration of registration.

In case C-451/99 the Court ruled that the provisions of the EC Treaty on the freedom to provide services (Articles 49 to 55 of the EC Treaty) preclude legislation of a Member State requiring an undertaking established in that Member State which takes a lease of a vehicle registered in another Member State to register it in the first Member State in order to be able to use it there beyond a period that is so short that it makes it impossible or excessively difficult to comply with the requirements imposed and imposing payment, in the Member State of use, of a consumption tax the amount of which is not proportionate to the duration of the registration of the vehicle in that Member State.

The Commission takes note of the information on leased cars provided by the Honourable Member and will consider it in its ongoing examination of the compatibility of the Finnish rules on car taxation with Community law and, in particular, Article 49 of the EC Treaty. It stresses, however, that although the Finnish car taxation and the Austrian taxation system examined by the Court of Justice appear to have some similar features, the matter needs further study.