Wind 1014 GmbH and Kurt Daell v Skatteministeriet.
Date: 2018-01-18
19


First of all, it should be noted that, apart from certain exceptions not relevant to the main proceedings, taxation of motor vehicles has not been harmonised at European Union level. The Member States are thus free to exercise their powers of taxation in that area provided that they do so in compliance with EU law (judgment of 19 September 2017, Commission v Ireland, C‑552/15, EU:C:2017:698, paragraph 71 and the case-law cited).
20


Leasing is a ‘service’ within the meaning of Article 56 TFEU (judgment of 21 March 2002, Cura Anlagen, C‑451/99, EU:C:2002:195, paragraph 18).
21


According to the Court of Justice’s settled case-law, restrictions on the freedom to provide services enshrined in Article 56 TFEU are those measures which prohibit, impede or render less attractive the exercise of that freedom (see, to that effect, judgment of 14 January 2016, Commission v Greece, C‑66/15, not published, EU:C:2016:5, paragraph 24 and the case-law cited).
30


The Court has held previously that the obligation to register in the Member State where they are used vehicles which have been leased from an undertaking established in another Member State has the effect of making cross-border leasing activities more difficult, with the result that such an obligation amounts to a restriction (see, to that effect, judgment of 21 March 2002, Cura Anlagen, C‑451/99, EU:C:2002:195, paragraphs 37 and 38).
37


Given the very high amount of registration tax due upon first registration of a vehicle in Denmark, which, according to the explanations provided by the Danish Government, amounts to 105% of the taxable value of the vehicle on the first 81700 Danish Crowns (DKK) (around EUR 10980) and 180% of the remaining taxable value of the vehicle over that amount, the obligation to pay the full amount of registration tax in advance entails the freezing of substantial funds and therefore represents a considerable cash-flow disadvantage for the person liable to pay the tax (see, by analogy, judgment of 19 September 2017, Commission v Ireland (C‑552/15, EU:C:2017:698, paragraphs 80 and 81).
38


Making immediate use of a vehicle leased by the residents of one Member State from a leasing company established in another Member State subject to advance payment of the full amount of registration tax is, therefore, liable to deter both residents of the first Member State from calling on vehicle leasing services offered by service providers established in other Member States and those service providers from offering vehicle rental or leasing services to those residents. Such an obligation thus constitutes a restriction on the freedom to provide services, prohibited, in principle, by Article 56 TFEU (see, by analogy, judgment of 19 September 2017, Commission v Ireland (C‑552/15, EU:C:2017:698, paragraph 82).
39


According to the Court’s settled case-law, restrictions on the freedom to provide services are allowed only by way of exception as expressly provided for in Article 52 TFEU, which applies here by virtue of Article 62 TFEU, or only if justified by overriding reasons relating to the public interest, provided that they are suitable for securing the attainment of the objective which they pursue and do not go beyond what is strictly necessary in order to attain it (see, to that effect, judgment of 21 March 2002, Cura Anlagen, C‑451/99, EU:C:2002:195, paragraphs 31 and 32 and the case-law cited).
40


As regards, more specifically, vehicle registration taxes, it is settled case-law of the Court that a Member State may levy a registration tax on a vehicle made available to a person residing in that State by a company established in another Member State when that vehicle is intended to be used essentially in the first Member State on a permanent basis or is in fact used in that way (judgment of 19 September 2017, Commission v Ireland (C‑552/15, EU:C:2017:698, paragraph 72 and the case-law cited).
41


On the other hand, if the conditions set out in the previous paragraph are not satisfied, the connection with the territory of the first Member State is weaker, so that another justification for the taxation is necessary (judgment of 19 September 2017, Commission v Ireland (C‑552/15, EU:C:2017:698, paragraph 73 and the case-law cited).
42


Even if such a justification, founded on an overriding reason in the public interest, exists, it is also necessary for the tax to comply with the principle of proportionality (judgment of 19 September 2017, Commission v Ireland (C‑552/15, EU:C:2017:698, paragraph 74 and the case-law cited).
46


The Danish Government submits in that regard that Paragraph 3b of the Law on Registration Tax for Motor Vehicles on the proportionate registration tax departs from the general rules which require, as part of that Member State’s powers of taxation in this area, payment of the full amount of registration tax before a vehicle is used in Danish territory. The purpose of the prior approval scheme is to enable the tax authorities to ensure, before the vehicle is used, that the conditions for payment of the proportionate registration tax are met and, therefore, to ensure compliance with the Danish State’s powers of taxation. The system is also aimed at preventing residents from concluding artificial leasing contracts for vehicles that are actually intended for long-term use in Denmark and/or actually are theirs, thereby avoiding payment of the full amount of registration tax. The Danish Government observes in that regard that the verification of duration of use and actual leasing arrangement, which are points covered in the examination procedure for prior approval, is inherent in the principle of payment of a tax, such as the proportionate registration tax, the amount of which is calculated proportionately to that duration (see, to that effect, judgment of 21 March 2002, Cura Anlagen, C‑451/99, EU:C:2002:195, paragraph 69).
49


The fact that vehicle taxation falls within the Danish State’s powers of taxation cannot therefore justify the restriction on the freedom to provide services (see, by analogy, judgment of 19 September 2017, Commission v Ireland (C‑552/15, EU:C:2017:698, paragraph 87).
50


Secondly, regarding the need to prevent circumvention of the taxation rules as well as fraud or abuse, it is apparent from the Court’s settled case-law that a restriction on the freedom to provide services can be justified by the need to prevent abusive practices where it specifically targets wholly artificial arrangements which do not reflect economic reality and whose only purpose is to obtain a tax advantage (judgment of 22 December 2010, Tankreederei I, C‑287/10, EU:C:2010:827, paragraph 28 and the case-law cited).
52


It should be noted that a prior approval scheme, such as that at issue in the main proceedings, may be held to be suitable for ensuring attainment of the objective referred to in the preceding paragraph. In the present case, in the course of the administrative procedure leading, where successful, to prior approval, the tax authorities verify whether the conditions of application of the proportionate tax are met, including the duration of the leasing contract and the identity of the actual owner of the vehicle in question. That check enables the amount of the tax to be calculated according to the duration of the lease in question and, therefore, the planned period of use of the vehicle in Danish territory. In that regard, the Court’s case-law is to the effect that, in order to be consistent with the principle of proportionality, the national legislation laying down the detailed rules for calculating such a tax must take into account the period of use of a vehicle leased from a company established in another Member State in the territory of the Member State in question (see, to that effect, judgment of 19 September 2017, Commission v Ireland (C‑552/15, EU:C:2017:698, paragraph 95 and the case-law cited).
53


However, the fact that a resident of Denmark uses temporarily in Danish territory a vehicle leased from a leasing company established in another Member State does not by itself provide the basis for a general presumption that there is an abusive practice and justify a measure undermining the exercise of a fundamental freedom guaranteed by the FEU Treaty (see, by analogy, judgment of 4 December 2008, Jobra, C‑330/07, EU:C:2008:685, paragraph 37 and the case-law cited).