EN Official Journal of the European Union CE 88/327

(2004/C 88 E/0332)

WRITTEN QUESTION E-0570/03

by Freddy Blak (GUE/NGL) to the Commission

(28 February 2003)

Subject: Punitive charges on imported vehicles

The Danish Government imposes various charges on imported used motor vehicles depending on the age of the vehicle.

§ 4, paragraph 6 (1) and (2) of Law No 977 of 2 December 2002 on registration fees for motor vehicles, for example, indicates that the older the vehicle is, the higher the rate applied to the value of the vehicle (180 % as opposed to 105 %).

This means in practice that the system of importing used motor vehicles into Denmark in many cases makes it more expensive to import and register a foreign motor vehicle than an equivalent vehicle bought in Denmark, which constitutes a technical barrier to trade to the detriment of imported goods.

Will the Commission say whether this system is consistent with the provisions on the free and nondiscriminatory movement of goods across borders in the EU?

Answer given by Mr Bolkestein on behalf of the Commission

(8 April 2003)

At present there is little Community legislation or harmonisation of national fiscal provisions applied by the Member States in the area of taxation of passenger cars. Additionally, Community law on vehicle taxation is extremely complex and is not in keeping with the needs of an internal market. However, any change to that law can only be brought about by the unanimous agreement of the Member States, and in practice there is little that the Commission can do to improve the position in the short term.

In principle, Member States remain free to apply internal taxation to motor cars on the occasion of their first entry into circulation within their territory, and the majority of Member States in fact apply such taxes. However, Member States' rights in that respect are considerably restricted by the provisions of both the EC Treaty and derived Community law.

First, under Article 90 of the EC Treaty, Member States are not allowed to charge higher taxes on imports than on similar and competing domestic products. Bearing that in mind, a number of Member States charge their taxes on imported 2nd hand vehicles by reference to arbitrary valuation criteria.

Such a system of valuation came before the Court in case C-393/98 (Gomes Valente), recently confirmed by case C-101/00 (Antti Siilin). The Court ruled that:

The first paragraph of Article 95 of the Treaty (now Article 90) does not permit a Member State to apply to second-hand vehicles imported from other Member States a system of taxation in which the depreciation in the actual value of those vehicles is calculated in a general and abstract manner, on the basis of fixed criteria or scales determined by a legislative provision, a regulation or an administrative provision, unless those criteria or scales are capable of guaranteeing that the amount of the tax due does not exceed, even in a few cases, the amount of the residual tax incorporated in the value of similar vehicles already registered in the national territory.

In other words, no matter what system of valuation is used, where tax is charged on a 2nd hand import, the value on which tax is charged plus the tax itself should never exceed the price of an equivalent tax-paid 2nd hand vehicle already within the Member State. Denmark has yet to adapt its law in accordance with the ruling. The resulting legal position is currently under examination.

In addition to the provisions of the EC Treaty, two Council Directives severely restrict the rights of Member States to apply consumption taxes to vehicles that citizens import for their personal use from other Member States.

The first of these, 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 (1). The second Directive, Council Directive 83/183/EEC of 28 March 1983 on tax exemptions applicable to permanent imports from a Member State of the personal property of individuals (1).

In this respect, the Commission has already taken action against Denmark concerning the application of article 1 of the above-mentioned Directive. In particular, a reasoned opinion was recently sent to Denmark on this matter. If the Commission does not receive a satisfactory response within two months, the matter could be taken to the Court of Justice. At this regard, it is made reference to the press communication that was released on 23 January 2003.

The Commission presented recently a Communication on taxation of passenger cars in the Union (2), in order to launch a consultation with Member States, other Community Institutions and important stakeholders, on future options for action at Community and national levels. This consultation is currently underway. Based on the main principles of the Communication and in the light of the results of the consultation process, the Commission could submit proposals in 2004 for Community legislation covering, inter alia, the method of calculation of registration tax on used passenger cars transferred from one Member State to another.

(1) OJ L 105, 23.4.1983.

(2) COM(2002)431 final.