Opinion of the Economic and Social Committee on the 'Proposal for a Council Directive governing the tax treatment of private motor vehicles moved permanently to another Member State in connection with a transfer of residence or used temporarily in a Member State other than that in which they are registered'
Date: 1998-05-27
Institutions: European Economic and Social Committee
Subjects: free movement of goods, import, motor vehicle, tax-free allowance, vehicle registration

27.7.98

EN

Official Journal of the European Communities

C 235/31

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Directive
governing the tax treatment of private motor vehicles moved permanently to another Member
State in connection with a transfer of residence or used temporarily in a Member State other
than that in which they are registered’ (1)

(98/C 235/07)

On 6 March 1998 the Council decided to consult the Economic and Social Committee,
under Article 99 of the Treaty establishing the European Economic Community, on the
above-mentioned proposal.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 6 May 1998. The rapporteur
was Mr Kubenz.

At its 355th plenary session (meeting of 27 May 1998) the Economic and Social Committee
adopted the following opinion by 111 votes for with two abstentions.

1.

Introduction

1.1.
The proposed directive is intended to replace
Directive No 83/182/EEC on tax exemptions within the
Community for certain means of transport imported
into one Member State from another (2) and Directive
No 83/183/EEC on tax exemptions applicable to perma-
nent imports from a Member State of the personal
property of individuals (3), as amended by Directive
No 89/604/EEC (4).

Its aim is to consolidate and update the earlier
1.2.
directives, to address problems encountered in their
application, and to take account of the public’s expec-
tations of the internal market and the associated freedom
of movement.

1.3.
The proposal lays down that the Member States
will not levy registration duty or similar taxes on vehicles
brought into their territory on transfer of residence. In
the case of temporary moves, the proposal grants
individuals the right to use a vehicle for six months in
any 12-month period.

The proposal provides inter alia for:

expires in a different Member State and the hire
vehicle is left on the territory of that Member State;

— the right of the members of the owner’s family to
use the vehicle in a Member State other than that in
which it is registered. The same right is granted to
persons who are not members of the family provided
that the owner is also in the vehicle;

— greater flexibility concerning the right of persons
working in a Member State other than that in which
they are resident; such persons would have the right
to use their vehicle in the Member State where they
work for nine months in any 12-month period;

— the Member State not to apply taxes where, during
the authorized period of temporary use, a vehicle is
damaged and the cost of repair is greater than the
value of the vehicle;

— the repeal of the special tax arrangements for vehicles
transferred from one Member State to another by
right of marriage or inheritance;

— consultation between national authorities in the
event of disputes concerning a person’s presumed
place of residence.

— greater freedom to use a hire car in a Member State
other than that in which it is registered. It is proposed
to authorize a second rental where a rental contract

2. General comments

(1) OJ C 108, 7.4.1998, p. 75.
(2) OJ L 105, 23.4.1983, p. 59 (ESC opinion: OJ C 131 of

12.6.1976, p. 50).

(3) OJ L 105, 23.4.1983, p. 64 (ESC opinion: OJ C 131 of

12.6.1976, p. 49).

(4) OJ L 348, 29.11.1989, p. 28 (ESC opinion: OJ C 180 of

8.7.1987, p. 13).

2.1.
The proposed amendments take account of the
fact that obstacles to the free movement between
Member States of private vehicles are one of the most
sensitive problem areas for individuals residing within
the European Union. Such obstacles, whether of a tax
or other nature, impede the free movement of persons,
given the large number of cases where the motor car is
the preferred means of transport.

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2.2.

The Committee welcomes the proposed directive.

a time-limit would not be necessary as it is not required
in Article 7.

2.3.
The Committee is aware that those Member
States which levy registration taxes may suffer a loss of
revenue. However, in view of the small number of cases,
these losses should not be too high. The Member States
concerned could recoup the shortfall by, for example,
raising mineral oil taxes (see appended table).

3.3.2.
At all events the question arises as to how a
period of nine (or however many) months can be proved
or checked if there are no controls/proof at internal
border crossings.

2.4.
It hopes that the new directive will give clearer
expression to the rights of European citizens and at the
same time prevent the abuse of tax concessions.

3.4. Article 6 ‘Specific cases of private use where

taxation is not permitted’

3. Specific comments

3.1. Article 2 ‘Definitions’

3.4.1.
limits laid down in Article 6(a) for car rental firms.

The Committee proposes extending the time-

3.4.2.
ing for Article 6(d):

The Committee proposes the following word-

3.1.1.
Article 2(f) defines ‘family’. The Committee
would point out that some Member States have defi-
nitions which are more all-embracing and include other
forms of life-long relationship (1).

‘a private vehicle used by a resident of the Member
State of temporary use, provided that the person
who brought the vehicle to the Member State of
temporary use is also on board the vehicle.’

3.2. Article 5 ‘General conditions under which tax is
not payable when a vehicle is used temporarily in
a Member State other than that of registration’

3.4.3.
The Committee urges that a binding provision
be laid down which covers the situation described in
Article 6(f) and which is also recognized mutually by
the Member States (2).

3.2.1.
Article 4(1)(b) contains the term ‘use of the
vehicle’. This is not clear because it is hardly ever
possible to prove on what date use began. The date of
registration in the name of the person transferring
residence would be more clear-cut.

3.2.2.
A specific problem is vehicles previously regis-
tered in the name of a member of the family transferring
residence who is not moving with them.

3.2.3.
Article 4(1)(c) stipulates that the vehicle be
brought into the Member State to which the person
transfers their residence not later than 12 months after
such transfer.

The Committee is of the view that this provision
3.2.4.
is irrelevant. Rather, what is required here are provisions
limiting resale within a certain period and stipulating
the maximum number of vehicles per family.

3.3. Article 5 ‘General condition under which tax is
not payable when a vehicle is used temporarily in
a Member State other than that of registration’

3.3.1.
The Committee considers that the matter dealt
with by Article 5(2) belongs in Article 7, in which case

3.5. Article 7 ‘Cases of business use where taxation is

not permitted’

3.5.1.
proposes that a binding provision be laid down.

As in the case of Article 6(f), the Committee

3.6. Article 8 ‘Provisions concerning irreparable dam-

age to vehicles’

3.6.1.
The Committee would point out that the
market value, especially of older used cars, is difficult
to determine.

3.7. Article 9 ‘Permanent use in a Member State other

than that of normal residence’

3.7.1.
Article 9(3) be relaxed.

The Committee urges that the refusal of use in

(1) Adopted and foster children could be a particular problem.

be filled out, even for short vehicle swaps.

(2) Some Member States require extensive questionnaires to

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C 235/33

3.8. Article 12 ‘Settlement of disputes’

3.8.1.
Article 12(3) gives the Commission the right to
issue a decision in disputes between Member States. The
Committee sees this rather as the responsibility of the
European Court of Justice.

4. Conclusions and summary

Completion of

4.1.
the internal market requires
freedom of movement of people and goods, in this case

private motor vehicles. At the same time some Member
States levy registration taxes on private vehicles in order
to pursue fiscal and political goals.

4.2.
The Committee considers that this directive,
along with the Committee’s own comments on it, will
strengthen the rights of citizens, especially when they
move to another Member State; it will also safeguard
the Member States’ entitlement to levy taxes.

Brussels, 27 May 1998.

The President

of the Economic and Social Committee

Tom JENKINS

APPENDIX

to the opinion of the Economic and Social Committee

Revenue from vehicle-related taxes 1994

A. As a percentage of GDP

Registra- Circulation
tion tax

tax

Petrol
tax

Diesel
tax

Insurance
tax

Road
tolls

Total

0,07
0,14
1,43
0,40
0,10
0,00
0,52
0,78
0,05
0,00
0,60
0,87
0,22
0,11
0,00

0,20
0,42
0,46
0,29
0,22
0,43
0,14
0,67
0,08
0,07
0,82
0,11
0,22
0,27
0,57

1,03
0,88
0,66
1,24
1,04
1,18
1,74
1,09
1,34
2,12
0,95
1,53
1,02
1,44
1,43

0,43
0,65
0,31
0,47
0,73
0,55
0,77
0,68
0,69
1,50
0,58
1,14
0,73
0,31
0,64

0,34
0,12
0,10
0,13
0,33
0,17
0,00
0,00
0,00
0,00
0,00
0,00
0,01
0,00
0,01

0,45
0,00
0,02
0,00
0,00
0,00
0,00
0,00
0,33
0,00
0,00
0,24
0,20
0,00
0,00

2,52
2,21
2,99
2,54
2,42
2,33
3,17
3,22
2,48
3,70
2,95
3,88
2,18
2,13
2,65

Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
Sweden
UK

Source: Eurostat 1997 and GD XXI.

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Official Journal of the European Communities

27.7.98

B. As a percentage of total taxation (incl. social security contributions) general government

Registra- Circulation
tion tax

tax

Petrol
tax

Diesel
tax

Insurance
tax

Road
tolls

0,30
2,77
0,00
0,85
0,22
1,63
2,12
0,12
0,00
1,28
0,15
2,45
0,59
0,22
0,00

0,91
0,89
1,00
0,60
0,50
0,45
1,83
0,20
0,16
1,76
0,46
0,32
0,61
0,53
1,69

1,88
1,27
2,77
2,60
2,36
5,48
2,97
3,29
4,79
2,04
2,34
4,31
2,79
2,89
4,26

1,39
0,61
1,29
0,99
1,67
2,42
1,85
1,69
3,40
1,25
0,98
3,22
2,02
0,62
1,90

0,26
0,19
0,40
0,28
0,74
0,00
0,00
0,00
0,00
0,00
0,76
0,00
0,02
0,00
0,02

0,00
0,05
0,00
0,00
0,00
0,00
0,00
0,81
0,00
0,00
1,03
0,67
0,54
0,00
0,00

Total

4,72
5,77
5,46
5,32
5,49
9,98
8,77
6,10
8,35
6,33
5,73
10,96
5,98
4,27
7,88

Belgium
Denmark
Germany
Finland
France
Greece
Ireland
Italy
Luxembourg
Netherlands
Austria
Portugal
Spain
Sweden
UK

Source: Eurostat 1997 and GD XXI.

Opinion of the Economic and Social Committee on the ‘Eighth Annual Report on the
Structural Funds 1996’

(98/C 235/08)

On 25 November 1997 the Commission decided to consult the Economic and Social Committee,
under Article 198 of the Treaty establishing the European Community, on the ‘Eighth Annual
Report on the Structural Funds 1996’.

The Section for Regional Development and Town and Country Planning, which was
responsible for preparing the Committee’s work on the subject, adopted its opinion on 21 April
1998. The rapporteur was Mr Little.

At its 355th plenary session (meeting of 27 May 1998), the Economic and Social Committee
adopted the following opinion by 116 votes and 1 abstention.

1.

Introduction

The European Commission’s Report on the
1.1.
Structural Funds in 1996 is the eighth such annual report
since the last major revision of the regulations governing
the Structural Funds (the 1988 ‘reform’ of the Funds).

1.2.
The report is published in accordance with
Council Regulations (EEC) Nos 2052/88 and 4253/88
both as amended in 1993 and, as required, details their
operations during the year and the progress made
towards achieving their objectives.

1.3.
In November 1996, the Commission presented
its first three-yearly report on Economic and Social
Cohesion (1) as required by Article 130B of the Treaty
of European Union and a précis of this closely-related
report is incorporated in the report under review. This
report on cohesion includes an assessment of
the
contribution made by the Funds to the progress being
made towards economic and social cohesion. The
Economic and Social Committee adopted an opinion (2)
on this report on 23 April 1997.

(1) COM(96) 542 final.
(2) OJ C 206, 7.7.1997, pp. 78-87.