Case C-464/02: Action brought on 23 December 2002 by the Commission of the European Communities against the Kingdom of Denmark
Date: 2003-02-22
Institutions: Court of Justice
Subjects: Denmark, European Commission, action for failure to fulfil an obligation, free movement of workers, motor car, tax-free allowance, transport regulations

22.2.2003

EN

Official Journal of the European Union

C 44/15

Action brought on 20 December 2002 by the Commission
of the European Communities against the Grand Duchy
of Luxembourg

23 December 2002 by the Commission of the European
Communities, represented by N. B. Rasmussen and D. Martin,
acting as Agents, with an address for service in Luxembourg.

(Case C-461/02)

(2003/C 44/28)

An action against the Grand Duchy of Luxembourg was
brought before the Court of Justice of the European Communi-
ties on 20 December 2002 by the Commission of the European
Communities, represented by H. Støvlbæk and F. Simonetti,
acting as Agents, with an address for service in Luxembourg.

The applicant claims that the Court should:

— declare that, by not reporting to the Commission every
two years on the results of the measures taken to
implement the programmes provided for in Council
Directive 93/76/EEC of 13 September 1993 to limit
carbon dioxide emissions by improving energy efficiency
(SAVE) (1), the Grand Duchy of Luxembourg has failed to
fulfil its obligations under Article 9 of that directive;

— order the Grand Duchy of Luxembourg to pay the costs.

Pleas in law and main arguments

In view of the period prescribed for transposing the directive,
a first report on the results of the measures taken to implement
the programmes provided for in the directive should have
been submitted to the Commission on 31 December 1996
and a second report on 31 December 1998. The Luxembourg
authorities’ lack of resources cannot be used to justify breach
of an obligation under a directive.

( 1) OJ L 237 of 22.9.1993, p. 28.

Action brought on 23 December 2002 by the Commission
of the European Communities against the Kingdom of
Denmark

(Case C-464/02)

(2003/C 44/29)

An action against the Kingdom of Denmark was brought
before the Court of Justice of the European Communities on

The applicant claims that the Court should:

— Declare that, in so far as it does not, under its legislation
and administrative practice, allow employees who work
outside Denmark and are resident in Denmark to use for
commercial or private purposes a company car registered
in a neighbouring country where the undertaking of
their employer has its principal office, the Kingdom of
Denmark has failed, within the terms of Article 226 EC,
to fulfil its obligations under the combined provisions of
Articles 39 EC and 10 EC;

— Declare that,

in so far as, under its legislation and
administrative practice, it allows employees who work in
another EU Member State and are resident in Denmark
to use for commercial and/or private purposes a motor
vehicle, in particular a company car, which is registered
in another Member State in which the undertaking of
their employer has its principal office or seat, only subject
to the conditions (i)
the work in the foreign
undertaking is the main activity engaged in by the person
concerned and (ii) that duty is paid on that vehicle, the
Kingdom of Denmark has failed, within the terms of
Article 226 EC, to fulfil its obligations under the com-
bined provisions of Articles 39 EC and 10 EC;

that

— Order the Kingdom of Denmark to pay the costs of the

present proceedings.

Pleas in law and main arguments

the present
The Danish rules which form the basis of
action were amended during the course of the administrative
procedure. According to the ‘previous scheme’ (see Notice
No 18 of the Ministry of Justice of 10 January 1992, which
subsequently became Notice No 592 of the Ministry of
Transport of 24 June 1996), Danish residents who used a
motor vehicle that had been registered by an employer/
undertaking outside Denmark could, as a main rule, do so
only if the vehicle was registered in Denmark or if authorisation
was granted. In the event of registration being required,
registration duty was also payable under the terms of the
Danish Law on registration duty. Under this legislation it was
Danish administrative practice to refuse to issue authorisations
requested for the purpose of ‘commercial trips within Den-
mark, including visits to clients’. Authorisation could, however,
be granted for vehicle use for the purpose of driving directly
between the Danish-German border and the place of residence
of the person concerned, but only with regard to weekends or
holidays. Under no circumstances was it permitted to use
company cars for private purposes, for example, outside of
working time.

C 44/16

EN

Official Journal of the European Union

22.2.2003

in Denmark, subject

the work for the undertaking or at

Under the ‘amended scheme’ (see the Notice of the Ministry of
Transport of June 1999 on the registration and MOT-testing
of vehicles), Danish workers resident in Denmark may use
within Denmark a foreign registered vehicle without having to
to compliance with the
register it
condition that
the
established place of operation outside Denmark constitutes the
main activity of the person concerned. The full registration
duty need not therefore be paid inasmuch as registration is not
required. On the other hand, the Law on registration duty does
require payment of a charge which is defined as a part payment
calculated on the basis of the full registration duty or —
following authorisation and subject to the further condition
that the car is used solely for commercial purposes — as a
periodic payment of a fixed amount.

Both the ‘previous scheme’ and the ‘amended scheme’ create
barriers to the free movement of workers contrary to the
combined provisions of Articles 39 EC and 10 EC.
It is
contrary to Article 39 EC to introduce or retain national
provisions which give rise to obstacles to the free movement
of workers, irrespective of whether the national provisions
apply indiscriminately, if the provisions affect workers’ access
to the labour market. The Danish rules are precisely of such a
character. A worker resident outside Denmark will, as a matter
of course, be able to use a foreign company car within
Denmark without having to obtain authorisation or to pay
duty. There is thus clear discrimination of a person resident in
Denmark vis-à-vis a person resident outside Denmark in
respect of precisely the same use in Denmark of a foreign
registered company car. In conclusion, a worker who does not
perform his ‘main activity’ within the foreign undertaking —
which might precisely point to an extremely limited use of the
company car — is prohibited from using that company car
within Denmark.
It seems obvious that an employer will
thereby be dissuaded from employing a person resident in
Denmark in preference to a worker resident outside Denmark
as the above obstacles exist even for purely commercial use of
the vehicle. It is in this context of secondary importance
whether the Danish rules can be regarded as constituting a
barrier to a worker’s right to seek employment outside of
Denmark or a barrier to an employer’s prospects of recruiting
workers resident in Denmark. There will be a barrier irrespec-
tive of whether it is the employer or the employee who must
pay the costs and obtain authorisation or effect registration.

seeking employment and obstacles that prevent an employer
from offering such use will have the result of discouraging
Danish residents — in contrast to persons resident outside
Denmark — from seeking employment in a foreign undertak-
ing offering such ancillary private use of a company car.

The Danish Government has set out four principal grounds of
justification: the interest
in maintaining supervision (road
safety and the monitoring and control of road users), the
interest in preventing the erosion of tax revenue in Denmark,
the fact that certain barriers resulting from differences in
taxation levels must be accepted, and the interest in achieving
equivalent conditions of competition as between Danish and
non-Danish undertakings. None of these considerations can
justify the Danish rules, whether by reference to the dero-
gations from Article 39 EC authorised by the Treaty or to the
case-law which states that national measures liable to restrict
the exercise of the fundamental freedoms guaranteed by the
Treaty or to make the exercise of those freedoms less attractive
may be accepted under certain conditions.

Finally, the Commission disputes the contention that Council
Directive 83/182/EEC (2) can be construed as meaning that the
Danish rules may be treated as lawful, quite apart from the fact
that provisions of secondary Community law cannot exempt
a Member State from its obligations under the combined
provisions of Articles 39 EC and 10 EC.

(1) Case C-297/99 Skills Motor Coaches and Others [2001] ECR I-

573.

(2) Council Directive 83/182/EEC of 28 March 1983 on tax exemp-
tions within the Community for certain means of transport
temporarily imported into one Member State from another (OJ
L 105 of 23.4.1983, p. 59).

Action brought on 23 December 2002 by the Commission
of the European Communities against the Kingdom of
Belgium

(Case C-469/02)

(2003/C 44/30)

With specific reference to ancillary private use, it should be
noted at the outset that transport from one’s place of residence
to one’s place of work cannot be treated as constituting ‘private
use’; this follows from the judgment in Case C-297/99 Skills
Motor Coaches Ltd (1). The possibility of ancillary private use
of a company car is an obvious incentive when it comes to

An action against the Kingdom of Belgium was brought
before the Court of Justice of the European Communities on
23 December 2002 by the Commission of the European
Communities, represented by H. Michard, acting as Agent,
with an address for service in Luxembourg.