WRITTEN QUESTION P-2786/01

by Mathieu Grosch (PPE-DE) to the Commission

(1 October 2001)

Subject: Registration of motor vehicles in Belgium Royal Decree of 20 July 2001

On 20 July 2001 the Kingdom of Belgium issued a Royal Decree on the registration of motor vehicles in Belgium. Article 3 lays down the following:

Article 3(1) Persons resident in Belgium shall register vehicles which they wish to bring into use in Belgium at the registry referred to in Article 6, even if those vehicles are already registered abroad. Residence in Belgium means that the persons concerned meet one of the following conditions:

Article 3(2) In the following instances, however, registration of vehicles registered abroad and brought into use by the persons referred to in paragraph 1 shall not be compulsory if the vehicle concerned:

(i) is made available by a foreign hire establishment, for a period not exceeding 48 hours, to a natural or legal person entered on the residence register of a local authority in Belgium or on a business register in Belgium;

(ii) is used by a natural person in pursuit of his or her occupation and registered abroad in the name of a foreign owner with which that person has a contract of employment; a certificate issued by the authority whose powers include responsibility for value-added tax shall be present inside the vehicle; the detailed conditions governing the use of the vehicle shall be laid down. (unofficial translation).

1. Is this an infringement of freedom to provide services pursuant to Article 49 of the EC Treaty, since this rule places an additional financial burden on residents of Belgium working in a self-employed capacity in the neighbouring country of Luxembourg?

2. Do such rules exist in other Member States, and how are they applied to self-employed persons?

Answer given by Mr Bolkestein on behalf of the Commission

(29 October 2001)

1. The Commission is of the opinion that, generally, the freedom to provide services laid down in Article 49 (ex Article 59) of the EC Treaty may not be restricted by an obligation to register vehicles in the country of residence of the user unless that obligation is consistent with the case-law of the Court of Justice on the freedom to provide services, and in particular if it is proportional to the public interest objective pursued.

As far as Belgium is concerned, the Commission has opened infringement proceedings in respect of the old Belgian rules governing the registration of motor vehicles, and it is examining the new laws on the subject.

With regard to tax, the answer to the Honourable Member's question relates to the application of Directive 83/182/EEC(1). It only ceased to apply on 31 December 1992 in respect of value-added tax, which has been governed since then by the directives establishing the internal market in VAT(2).

For other taxes on means of transport, such as the registration tax, the tax for vehicles on entry into service, etc., tax relief on the temporary private use of motor vehicles in a Member State other than the one in which they were registered (the period of use is usually not more than six months in any 12 months) is dealt with in Article 3 of the Directive. The first condition for obtaining exemptions is that the user of the vehicle must have his normal residence in a Member State other than the Member State of temporary importation.

As tax exemptions for the temporary use of a vehicle depend, under current Community law, on the Member State in which the user has his normal residence, a vehicle issued with a standard registration plate in the Member State in question can be used temporarily in any other Member State without being liable to taxation. On the other hand, if the vehicle was registered in a Member State other than the Member State in which the user normally resides for instance, by a self-employed person working in a Member State other than the Member State of his residence (the situation referred to by the Honourable Member) the vehicle cannot be used in the Member State of his residence without paying taxes (except VAT), unless the tax administration concerned has given its approval.

However, Article 5 of the Directive provides quite a satisfactory solution for people who work in one Member State and reside in another: exemptions not subject to any time limit are granted where a private vehicle registered in the country of normal residence of the user is used regularly for the journey from his residence to his place of work in the territory of another Member State, and vice-versa.

2. The Commission has not carried out a systematic analysis of existing national laws and the way in which they apply to self-employed persons, but it will take into account this kind of issue in the follow-up to its communication entitled A new internal market strategy for services(3). The first stage of this follow-up will be to identify existing obstacles, the second to propose appropriate solutions.

(1) Council Directive 83/182/EEC of 28 March 1983 on tax exemptions within the Community for certain means of transport temporarily imported into one Member State from another, OJ L 105, 23.4.1983.

(2) 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 L 376, 31.12.1991.

(3) COM(2000) 888 final.