C-115/00

3. The object of the plaintiff company is national and international carriage of In particular, the German court seeks an goods. Until the end of 1995, the plaintiff interpretation of Article 6 of Regulation operated solely as a carrier for Hoves (EEC) No 3118/93 3and of Article 5 of Speditionsgesellschaft mbH in accordance Directive 93/89/EEC. 4 with a contract signed in January 1993. Under that contract, Hoves Speditionsge- sellschaft mbH drew up route plans for 1 — Original language: Spanish. 2 — Footnote not applicable to English version. vehicles and drivers and, after carriage was 3 — Council Regulation (EEC) No 3118/93 of 25 October 1993 completed, settled the account with the laying down the conditions under which non-resident plaintiff by way of a credit entry. As from carriers may operate national road haulage services within a Member State (OJ 1993 L 279, p. 1). 1996 it has also operated as a fleet carrier 4 — Council Directive No 93/89/EEC of 25 October 1993 on engaged in international carriage for vari- the application by Member States of taxes on certain vehicles used for carriage of goods by road and tolls and ous customers. It employs eight drivers, all charges for the use of certain infrastructures (OJ 1993 L 279, p. 32). resident in Germany who, it appears, take

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5. The plaintiff unsuccessfully claimed 6. The Bundesamt für Finanzen and the input tax reimbursements from the Bundes- Finanzamt Borken, which is the defendant amt für Finanzen (Federal Finance Office) in the main proceedings, concurred with for January 1993 to December 1994. In the view of the Luxembourg authorities those proceedings before the Finanzgericht and decided that the seat of management of Köln, the Bundesamt für Finanzen made a Andreas Hoves Internationaler Transport- request for judicial and administrative Service Sarl was in Germany. The Finanz- assistance to the Luxembourg authorities amt Borken assessed the basis of taxation in order to determine the plaintiff's seat of 6 — Council Directive 77/799/EEC of 19 December 1977 con- cerning mutual assistance by the competent authorities of 5 —Council Regulation (EEC) No 4059/89 of 21 December the Member States in the field of direct taxation. 1989 laying down the conditions under which non-resident 7 — Luxembourg/Germany Double Taxation Convention of carriers may operate national road haulage services within a 23 August 1958 and 15 July 1973 (BGBl. Il 1959, p. 1270; Member State (OJ 1989 L 390, p. 3). BGBl. II 1978, p. IUI.

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for corporation tax and turnover tax for under Paragraph 23 of the Road Transport 1989-1995, capital tax for 1992 and wages Registration Code (Straßenverkehrs- tax for 1989-1994. The appeals lodged Zulassungs-Ordnung). It also held that the against those assessments had not been plaintiff could not rely on Article 5 of decided at the time the questions for Council Directive 93/89 and that the preliminary ruling were drafted. cabotage authorisations issued in Lux- embourg were irrelevant.

10. In order to resolve the dispute, the German court stayed the proceedings and referred to the Court of Justice the follow- ing questions for a preliminary ruling: 8. The appeals by Andreas Hoves Inter- nationaler Transport-Service Sari were unsuccessful because the defendant argued that, in the given circumstances, irrespec- tive of the fact that the vehicles were registered in Luxembourg, where the '1. Does Article 6 of Council Regulation necessary cabotage authorisations had been (EEC) No 3118/93 of 25 October issued, there was an unlawful use of the of 1993 (OJ 1993 L 279, p. 1) preclude the vehicles in Germany within the mean- national rules which result in motor ing of Paragraph 1(1)(3) and Paragraph vehicle tax being charged for the use of 2(5) of the Law on Motor Vehicle Tax commercial goods vehicles which are (Kraftfahrzeugsteuergesetz), where the registered in another Member State of plaintiff had its regular base, and the the European Union, for which a vehicles were not registered as required cabotage authorisation has been issued

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in that Member State, which carry out ( 1 ) The following shall be subject to motor cabotage operations in the Federal vehicle tax: Republic of Germany and which have their regular base there?

1. ...

2. Does Article 5 of Council Directive 93/89/EEC of 25 October 1993 (OJ 1993 L 279, p. 32), in cases like that mentioned in Question 1, preclude 2. the keeping of foreign motor national rules such as the second half of vehicles for use on the public high- the second sentence of Paragraph way, if the vehicles are in the 1(1 )(2) of the Kraftfahrzeugsteuerge- Federal Republic of Germany; setz in conjunction with Paragraph 1(1)(3)of t h e KraftStG?'

OPINION OF MR RUIZ-JARABO — CASE C-115/00

Republic of Germany. Exemptions used on public roads in the Federal shall apply to motor vehicles and Republic of Germany without the reg- articulated vehicle combinations istration required under road transport intended exclusively for the carriage law... of goods by road and with a maximum permissible laden weight under road transport law of not less than 12 000 kg, which are registered in another Member State of the European Com- munity in accordance with Article 5 of Council Directive 93/89/EEC of 25 Oc- tober 1993; this shall not apply to cases B — Road Transport Registration Code under section 3; 8

Paragraph 18. Obligation to register

3. unlawful use of motor vehicles;...

Motor vehicles with a maximum speed Paragraph 2. Definition of terms, partici- determined by their type of more than pation by transport authorities 6 km/h and their trailers (vehicles carried behind motor vehicles with the exception of non-operational vehicles which are being towed and towing axles) may be operated on public roads only if they have been registered to operate through the issue of an operating permit or an EC type approval and through the allocation of a registration number for motor vehicles or trailers by the administrative authority (registration 4. A motor vehicle is a foreign motor office). vehicle where it is registered under the registration procedure of another State.

Paragraph 23. Allocation of registration 5. Unlawful use within the meaning of number this Law exists where a motor vehicle is

13. In December 1989, the Council intro- duced, by virtue of Regulation No 4059/89, (a) ... a transitional cabotage system whereby, as from 1 July 1990, carriers established in a Member State and authorised to carry on business as international road hauliers were entitled, under certain conditions, to oper- ate on a temporary basis national road (b) foreign registration certificate haulage services in another Member State, without having a seat or other establish- ment therein. Cabotage could be carried out within a quota of 15 000 cabotage authorisations valid for two months. The Regulation was applicable until 31 De- cember 1992 and the Council was to adopt and a regular base has not been estab- before 1 July 1992 a regulation laying lished within the area of application of down the definitive cabotage system. this Regulation.

10 — Judgment of the Bundesfinanzhof of 21 November 1989 9 — RGBl. I, p. 1137. VII R 59/87, BFH/NV 1990, p. 602).

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The Court of Justice annulled this Regu- the dispute are paragraphs 1 to 3 of lation on the grounds that the Council Article 6 which provide, respectively: infringed essential procedural requirements by failing to consult the Parliament a second time, despite the fact that the provision adopted differed from the pro- posed text. Nevertheless, it held that the provisions of the Regulation should con- tinue to have effect until the Council, after '1. The performance of cabotage transport due consultation of the Parliament, had operations shall be subject, save as other- adopted fresh rules on the subject. 11 wise provided in Community regulations, to the laws, regulations and administrative provisions in force in the host Member State in the following areas:

(d) driving and rest time; it is the 'taxe sur les véhicules automoteurs' and for Germany the 'Kraftfahrzeugsteuer'.

(e) value added tax (VAT) on transport services. Pursuant to Article 5,

'As regards vehicles registered in the Member States, the taxes referred to in Article 3 shall be charged solely by the Member State of registration.' '3. The provisions referred to in paragraph 1 shall be applied to non-resident transport operators on the same conditions as those which that Member State imposes on its own nationals, so as to prevent any open or hidden discrimination on grounds of nationality or place of establishment.' The Court of Justice annulled this Directive on the grounds that the Council infringed essential procedural regulations by failing to consult the Parliament a second time after introducing amendments to the Com- mission's proposal. Nevertheless, it held 16. The same day on which the Council that the provisions of the Directive should adopted Regulation No 3118/93, it also continue to have provisional effect until the adopted Directive 93/89 requiring Member Council adopted a new directive, 13 which States to adjust their tax systems on road did not happen until June 1999. 14 It fixed haulage vehicles on the basis of the mini- the time-limit as 1 July 2000 for Member mum taxes applicable according to the States to adapt national laws. Neither number of axles and maximum authorised Article 3, which refers to the names of the weight. The time-limit was fixed at vehicle taxes in Luxembourg and Germany, 1 January 1995. nor Article 5, as interpreted by the Finanz- gericht Münster, have been amended by Directive 1999/62/EC.

17. The plaintiff, the French Government and the Commission submitted written observations in these proceedings within 19. The plaintiff in the main proceedings the time-limit laid down in Article 20 of the contends that this question should be Statute of the Court of Justice. answered in the affirmative because the motor vehicle tax was paid in the Member State of registration, namely Luxembourg. The plaintiff was granted Community licences and cabotage authorisations in Luxembourg for the vehicles in question after the Luxembourg authorities carried At the hearing held on 16 October 2001, out annual checks that the necessary the defendant's representative, the United requirements were met including, in par- Kingdom's agent and the Commission's ticular, checks to determine the company agent appeared to present their oral argu- seat, the vehicles' place of connection, and ments. compliance with the technical and financial rules. The plaintiff contends that it has neither its own garage nor parking spaces for the vehicles in Luxembourg, but con- siders that, had it been necessary to have those facilities in order to operate a trans- port business, the Luxembourg authorities would not have allowed it to do so without VI — The questions raised such facilities.

The plaintiff also claims that, in order to A — Question 1 determine the company's operational centre, various objective factors must be taken into account, such as: for the most part, the vehicles operate abroad; rest periods in Luxembourg are at least as long 18. By this question, the referring court as those in Germany; the vehicles are asks whether Article 6 of Council Regu- registered in Luxembourg and motor lation No 3118/93 precludes a Member vehicle tax on them is paid there; technical State's rules which result in motor vehicle controls are carried out every two years in tax being charged for the use of commercial Luxembourg; fuel is also purchased there goods vehicles in its territory, where they and the vehicles are insured there; the have their regular base, which are regis- drivers are registered and insured in Lux-

22. At the oral hearings, the United King- dom's agent argued that cabotage oper- ations constitute an exception to the gen- eral rule that motor vehicle tax should be charged by the State on whose territory they are carried out. In the light of the 20. The Finanzamt Borken presented oral purpose of Regulation No 3118/93, bear- arguments contesting the interpretation ing in mind that vehicle registration and which the Commission proposes be given vehicle taxation go hand in hand, it is to the Community rules. It contends that contended that Article 6 precludes Ger- Regulation No 3118/93, which applies many from taxing vehicles registered in directly as from 1 January 1994, did not Luxembourg belonging to the plaintiff in preclude, before 1 January 1995, the date the main proceedings. by which domestic legislation was to be amended to comply with Directive 93/89, Member States from applying their rules concerning vehicle registration.

The Court of Justice has recently confirmed that companies are entitled to carry on their business in another Member State through an agency, branch or subsidiary. The location of their registered office, general or central administration or princi- pal place of business serves as the con- 26. Pursuant to Article 3, the Commission necting factor with the legal system of a granted cabotage authorisations to Member State in the same way as does Member States of establishment which, in nationality in the case of a natural per- turn, issued them to hauliers who requested son. 16 them.

28. It is acknowledged that, during the permanency associated with the possession contested period, the plaintiff in the main of a seat. It would be counterproductive proceedings possessed cabotage authori- and, above all, hardly profitable if com- sations, issued by the Luxembourg auth- panies were obliged to pay motor vehicle orities to operate transport services in tax in the host State each time they wished Germany, for another party, as a result of to operate cabotage services. which Regulation No 3118/93 is applicable to the plaintiff. It has also been shown that Article 6, in enumerating the legal obli- gations with which a carrier operating cabotage services must comply in the host State, does not contain any rules on vehicle The Court of Justice has held that the registration or motor vehicle tax. temporary nature of cabotage activities has to be determined in the light not only of the duration of the provision of the service, but also of its regularity, periodicity or con- tinuity. 17

31. In its reference, the Finanzgericht 29. Accordingly, I consider that Germany, Münster states that the case-law of the as a host country for cabotage services Bundesfinanzhof stipulates that a vehicle's operated by the plaintiff in the main regular base is the place from which the proceedings, is not entitled to require the vehicle is used directly for public road plaintiff to comply with its legislation on transport and at which it is parked at the vehicle registration and motor vehicle tax. end of the journey and, in the event of inter-regional transport, the operational centre where decisions are taken about the vehicle's route, including rest time.

fact that carriers established in other somewhat sceptical about the fact that the Member States would be allowed to oper- plaintiff, which has fifteen vehicles regis- ate national transport services without tered in its name in Luxembourg, is able to needing to change their seat or open an make full use of them with eight drivers. establishment; second, given that cabotage Further, if there are only those eight drivers is national transport, while such operations resident in Germany, who take their are being carried out in Germany it is more vehicles home, why is the Finanzamt logical for the vehicles to be used and Borken seeking to tax the fifteen vehicles parked in that State; finally, in a business as owned by the plaintiff? small as Mr Hoves' business in Lux- embourg would appear to be, in which one or two persons take the decisions concerning the use of the vehicles, especially at a time where communications have undergone such radical development, the idea of a fixed operational centre seems outdated. 33. According to the Court's case-law, a Member State is entitled to take measures designed to prevent certain of its nationals from attempting, under cover of the rights created by the Treaty, improperly to cir- cumvent their national legislation or to prevent individuals from improperly or fraudulently taking advantage of provisions 32. There is agreement between the parties of Community law. 18 that throughout the contested period Andreas Hoves Internationaler Transport- Service Sàrl was in possession of auth- orisations to operate cabotage services in Germany, issued by the Luxembourg auth- orities, and that the plaintiff did not have any establishment in Germany.

35. Accordingly, I consider that Article 6 On the other hand, Article 8 requires of Regulation No 3118/93 precludes a Member States to assist one another in Member State's rules which result in motor applying the Regulation and confers on the vehicle tax being charged for the use of authorities of the host State, without preju- commercial goods vehicles in its territory, dice to any criminal proceedings, the power where they have their regular base, which to impose penalties, on a non-discrimina- are registered in another EU State, where a tory basis, on a non-resident carrier who cabotage authorisation has been issued. has committed infringements of this Regu- lation or of Community or national trans- port legislation in their territory during a cabotage operation. Such penalties may range from a simple fine up to a temporary ban on operating transport services of that type in its territory, requiring the offences and penalties to be notified to the State of establishment which, subject to consul- tation with the authorities of the host State, B — Question 2 may withdraw the authorisation to operate as a carrier.

36. This question to the Court of Justice refers to the express provisions of the German law on motor vehicle tax, without stating what they are. Those provisions, on the one hand, exempt from motor vehicle If the German public authorities considered tax vehicles registered in another Member that Andreas Hoves Internationaler Trans- State and, on the other, deny that advan- port-Service Sàrl was infringing the cabot- tage to vehicles used unlawfully. The age authorisations issued by Luxembourg, definition of unlawful use is given in they should have taken action within the Article 2(5) of the Law and entails the scope afforded them by Regulation vehicle being used in Germany without No 3118/93, instead of seeking to impose being registered in that State when the on the plaintiff the obligation to pay motor legislation in force requires it.

40. The reply which the French Govern- ment proposes be given to this question is that Directive 93/89 allows tax to be charged on motor vehicles solely by the State where they are legally registered.

37. Consequently, with this question the Finanzgericht Münster asks whether, in cases like that mentioned in the first ques- tion, Article 5 of Council Directive 93/89 precludes national rules which, after 41. The United Kingdom's agent concurs excluding payment of motor vehicle tax with the position adopted by France and

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the Commission. It maintains that Article 5 annex, may be charged solely by the State of Directive 93/89 is clear and the position of registration; and Article 7 allows of Germany, seeking to separate the regis- Member States to maintain or introduce tration of a vehicle in a Member State from tolls or user charges, under certain con- the right to tax it, is contrary to the ditions. It is clear that the Directive links abovementioned Community law. the right to levy motor vehicle tax insepar- ably to registration, and provides that the vehicle may be registered in one State only where it must be taxed accordingly.

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registered in compliance with the legis- in Luxembourg, where it is obliged by law lation in force, could not benefit from the to register its vehicles and where, by technical exemption. Moreover, a foreign application of the Directive, it must pay vehicle cannot be authorised for use in motor vehicle tax, could be obliged to pay Germany, even on a temporary basis, if its an identical tax in another Member State regular base is in that State. 20 for the same vehicles when carrying out cabotage operations.

45. Iconcur with the Commission that the intention of Article 5 of Directive 93/89 is not to prevent a Member State, in the absence of any harmonisation of the crite- Such a situation is contrary to Article 5 of ria governing the registration of road haul- Directive 93/89 and constitutes a discrimi- age vehicles, from imposing its own natory measure against foreign providers of requirements as regards compliance with transport services, as those providers estab- and the application of conditions governing lished in Germany, who have registered registration laid down by its transport their vehicles in that State, pay tax only legislation. However, any conflicts arising once. as a result of such measures must be resolved in compliance with Community law and not by creating a new tax which, in any event, is contrary to the letter of Article 5 and the purpose of the Directive.

47. Given that only the Member State of registration is authorised to tax motor vehicles registered on its territory, I must 46. If the argument advanced by the Ger- conclude that Article 5 of Directive 93/89 man authorities in the main proceedings precludes a national rule which, after were to be upheld, a company such as excluding the payment of tax on vehicles Andreas Hoves Internationaler Transport- registered in another Member State, in Service Sàri, incorporated and established which tax has already been paid for the same purpose, refuses to apply that tech- nical exemption to those suspected of 20 — That is my interpretation, contrario sensu, of unlawful use, in the sense that the foreign Article 1(1)(b) of the Regulation on the international movement of vehicles. vehicle's regular base is in its territory.

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