C-387/01

OPINION OF MR TIZZANO — CASE C-387/01

OPINION OF ADVOCATE GENERAL TIZZANO delivered on 3 July 2003 1

1. By order of 20 September 2001, the of nationality within the field of application Austrian Verwaltungsgerichtshof (Adminis- of the Treaty. That principle is then given trative Court; 'the Verwaltungsgerichtshof') effect, inter alia, in Article 39 EC, according referred to the Court for a preliminary to which the free movement of workers ruling under Article 234 EC three questions within the Community requires the aboli- by which the referring court asks, in tion of all discrimination based on nation- substance, whether Articles 12 EC, 23 EC, ality between workers of the Member States 25 EC, 39 EC and 90 EC or the Commu- as regards employment, remuneration and nity VAT directives preclude national rules other conditions of work and employment. imposing a registration tax based on fuel consumption on a vehicle imported from another Member State if those rules are applied to the private vehicle of a taxable person moving residence from one Member State to another for reasons of work.

3. Articles 23 and 25 EC, which regulate the operation of the customs union, prohi- I — Legislative background bit the imposition, in trade between Mem- ber States, of customs duties on imports and of all charges having equivalent effect.

A — Community law

The Treaty provisions

'Without prejudice to other Community provisions, in particular those laid down in the Community provisions in force relating '1. Every Member State shall, subject to the conditions and in the cases hereinafter set 2 — Sixth Council Directive 7-/388/EEC of 17 May 1 9 7 7on the out, exempt personal property imported harmonisation ot the laws of the Member States relating to permanently from another Member State turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145. p. 1). as amended by Council Directive 91/680/EEC of 16 December 1991 supplementing the common system of value added tax and amending Directive 7 7 / 3 8 8 / E E C with a view to the abolition of fiscal frontiers (OJ 1991 L 376. p. 1). 3 — OJ 1983 1 105, p. 64.

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by private individuals from turnover tax, 9. The party liable for the tax is the excise duty and other consumption taxes supplier or lessor respectively in the case which normally apply to such property. of a supply or a commercial hiring out (Paragraph 4(1) of the NoVAG), while in the case of a first-time registration it is the person in whose name the motor vehicle has been registered (Paragraph 4(2) of the NoVAG).

2. Specific and/or periodical duties and taxes connected with the use of such property within the country, such as for instance motor vehicle registration fees, road taxes and television licences, are not covered by this Directive'.

10. The basis of assessment of the tax is set forth in Paragraph 5 of the NoVAG and is defined, in the case of a supply, as the value of the motor vehicle, calculated in accor- dance with Paragraph 4 of the Umsatz- The national legislation steuergesetz (Turnover Tax Law).

13. The purchase price abroad may be deemed to be the fair value on which the NoVA is based if it does not differ from the Eurotax mean valuation by more than 20%. If it does, the taxpayer is required I I— Facts and procedure to explain in each case the difference of over 20% from the mean valuation.

17. Mr and Mrs Weigel, who are German nationals originally resident in Germany, moved to the Vorarlberg region of Austria 14. Under Paragraph 6(2) of the NoVAG, in 1996. Their move followed Mr Weigel's the tax rate for motor vehicles varies appointment as director of the Vorarlberger according to fuel consumption and is equal Landesbibliothek (Vorarlberg State to the fuel consumption rating, in litres, Library). reduced by three litres (or two litres, in the case of diesel vehicles) and multiplied by two. Paragraph 6(3) of the NoVAG pro- vides that the rate may not in any case exceed 16% of the basis of assessment.

18. On moving, the plaintiffs brought their respective cars with them and applied to have them registered in Austria. This resulted in a decision of the Finanzamt 15. Under Paragraph 6(6) of the NoVAG, (Tax Office) Feldkirch of 2 October 1996, where the chargeable event is not subject to assessing Mr and Mrs Weigel to the NoVA VAT in Austria and the VAT amount is in respect of both motor vehicles, on the thus not included in the basis of assessment basis that it was in each case a first-time of the NoVA, a surcharge of 20% of the registration in Austria (Paragraph 1(3) of base tax applies. the NoVAG).

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21. The Weigels brought proceedings before the Verfassungsgerichtshof (Consti- tutional Court) which declined to hear the case and, upon the plaintiffs' application, 3. Is the surcharge payable on the Norm- remitted the case to the administrative court verbrauchsabgabe referred to in the of competent jurisdiction, the Verwaltungs- first question compatible with the gerichtshof, before which the plaintiffs Sixth Council Directive (77/388/EEC) claimed that the aforementioned tax rules of 17 May 1977 on the harmonisation were incompatible with Community law. of the laws of the Member States I - 4988

WEIGEL

relating to turnover taxes (...), as Treaty provisions expressly cited by the amended by Council Directive referring court but also to take into 91/680/EEC (...)?' consideration various provisions of second- ary law, contained in Directive 83/183, which pursue essentially the same objective.

23. In the proceedings before the Court, written observations were submitted by Mr and Mrs Weigel, by the Austrian, Finnish 25. Let me preface my analysis by saying and Danish Governments, and by the that, strictly speaking, the answer to this Commission. question may require separate considera- tion of the NoVA base tax and the NoVA surcharge (above, paragraphs 15 and 16). However, I will deal with the latter, in relation to the specifically fiscal aspects, in my analysis of the second question, and I can therefore restrict the discussion here to the NoVA base tax. I will now examine, in turn, its compatibility with Article 39 EC III — Legal Analysis and with Directive 83/183.

28. They contend, first of all, that accord- 31. Since therefore the measure is in sub- ing to the case-law of the Court, non- stance one applicable without distinction, discriminatory national rules which affect the alleged obstacle to the free movement of access to the labour market only indirectly persons, even if it existed, would be justified are not an obstacle to the free movement of by overriding reasons of public interest, workers. 6 The tax in question does not such as environmental protection, road have any direct effect on the ability of safety and combating the erosion of the workers coming from other Member States tax base. The measure in question could not to take up employment in Austria. therefore be regarded as contrary to Article 39 EC.

32. The Commission, for its part, concerns 29. The NoVA should therefore be itself only secondarily with the conformity regarded as one of the many provisions of of the NoVA with Article 39 EC, because in national law that emigrant workers taking its view the tax must be considered in the up employment in another Member State first instance in the light of Directive have to reckon with and by which they are 83/183. sometimes adversely affected due to the failure to harmonise national legislation at Community level.

33. In the Commission's opinion, given that the NoVA is incompatible with that directive in respect of the part of it that exceeds the administrative cost of the 30. In any event, the Austrian Government vehicle registration formalities, there would in particular points out, the imposition of be no point in also examining whether or the NoVA does not constitute a discrimi- not it is compatible with Article 39 EC, except — obviously — in respect of the part that does not exceed the cost of the service rendered and which is therefore not incom- 6 — Case C-190/98 Graf [2000] ECR I-493, paragraph 23. patible with the directive.

8 — Sec, in relation to Article 48 of the Treatv (now, after amendment. Article 39 EC), Case 1/78 Kenny [1978] ECR 7 — In support, the Commission cites Case C-177/94 Perfili 1489, paragrapli 18. Sec also Joined Cases C-393/99 and [19961 ECR I-161, paragraph 27, Case C-379/92 Peralta C-394/99 Hen-em and Others [2002] LCR I-2829, para- [1994| ECR I-3453, paragraph 52. and the Opinion of graphs 50 and 51. In relation to other aspects of the free Advocate General Jacobs in Case C-451/99 Cura Anlagen movement of persons, see the cases cited by the Commission, [2002] ECR I-3193, points 37 to 47. footnote 7 above.

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39. It therefore follows directly from the 42. In the Weigels' view, then, Article 1(1) case-law cited that taxation such as the of Directive 83/183 applies to the No VA as No VA base tax is not contrary to Article 39 well, since the NoVA is in reality a turnover EC. tax.

The No VA and Directive 83/183

43. The Commission reaches the same conclusion, at least in respect of the part 40. I now turn to examine whether, as the by which the No VA base tax exceeds the plaintiffs in the main proceedings and the administrative cost of registering the vehi- Commission maintain, the tax in issue is cle. The provision in the directive prohibits contrary to Directive 83/183 and specifi- not only taxes that directly hinder the cally to Article 1(1) thereof, which requires importing of the property but also those Member States to exempt from turnover that are imposed on transactions intimately tax, excise duty and other consumption bound up with the importation, as is taxes personal property imported perma- precisely the case with the registration of a nently from another Member State by motor vehicle. private individuals.

46. Let me say straight away that this literal interpretation does not convince me and I find more persuasive the opposite conclusion reached by the Member States that submitted observations in this case. 49. Furthermore, I agree with the Finnish Government when it points out that Article 1(2) of Directive 83/183 excludes from the tax exemption for personal property imported permanently all 'duties and taxes connected with the use of such property 47. It seems to me, as it does to the within the country'. It seems to me too that Austrian, Danish and Finnish Govern- a tax such as the NoVA specifically ments, that taxes such as the No VA base concerns the use of a vehicle within the tax, which are charged upon the registra- country and not its mere importation tion of a motor vehicle, do not constitute (suffice it to consider the exemption, men- 'turnover tax, excise duty and other con- tioned above, for collectors' vehicles and sumption taxes which normally apply to' vehicles in general not intended for road 'personal property imported permanently use). from another Member State by private individuals' and that they must therefore be regarded as excluded from the scope of the exemption provided for in Article 1(1) of Directive 83/183.

50. In my view, therefore, taxes of this kind 48. First of all, I agree with the Austrian should rather be treated as '[s]pecific and/or Government that the No VA does not seem periodical duties and taxes connected with at all to fall within 'taxes which normally the use of such property within the country, apply to' personal property 'imported per- such as for instance motor vehicle registra- manently' within the meaning of the provi- tion fees, road taxes and television licences', sion, because the Austrian tax is in fact which are expressly excluded from the levied as a consequence of registration. To exemption by Article 1(2) of the directive. I - 4993

52. Under that proposal, the adoption of a directive to prohibit Member States from 54. Lastly, the Commission's argument imposing 'registration taxes and/or other seems to me to be difficult to reconcile with consumption taxes (...) on private motor what the Court itself had to say in the vehicles registered in other Member States recent Cura Anlagen judgment — on the and brought into that Member State very subject, it should be noted, of the permanently in connection with the transfer Austrian NoVA. There the Court confirmed of normal residence of a private individual' that since the taxation of motor vehicles has (Article 1) is necessary precisely because of not yet been harmonised at Community the inadequacy of the rules laid down by level, Member States are free to exercise Directive 83/183 (fourth, fifth and seventh their powers of taxation in that area, recitals). provided they do so in compliance with Community law. 11

53. Furthermore, it seems to me that the Kingdom of Denmark is correct in obser- 55. In conclusion, I take the view that the ving that to maintain, as the Commission imposition of a tax such as the NoVA base does, that the exclusion of 'motor vehicle tax on a migrant worker moving to Austria from another Member State to take up employment there and importing his or her 10 — Proposal for a Council Directive governing the tax own vehicle into that country is not 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, COM (1998) 30 final (OJ 1998 C 108 , p. 75), as amended by COM (1999) 11 — Case C-451/99 Cura Anlagen [2002] ECR I-3193, para- 165 final (OJ 1999 C 145, p. 6). graph 40.

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Article 2 of Regulation No 918/83 on reliefs 62. For my part, I must first say that from customs duty granted when goods are Regulation No 918/83, which is relied put into free circulation in the Commu- upon by the plaintiffs in the main proceed- nity, 12 'personal property imported by ings, does not appear to me to be a suitable natural persons transferring their normal yardstick for present purposes. That reg- place of residence ... to the customs ulation applies in the context of imports of territory of the Community shall be property from a non-Community country admitted free of import duties'. Mr and and is therefore entirely unsuitable for Mrs Weigel argue that this system of reliefs application in the different context of a should also apply in the case of a transfer of transfer of property within the Community. residence within the Community, since otherwise the result would be that intra- Community transfers of residence were treated less favourably, without justifica- tion, than those involving a crossing of the Community's customs frontier.

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65. In order to answer the first part of this (b) The Austrian system and Article 90 EC question it is therefore necessary to estab- lish whether or not the NoVA is a pecuniary charge which is imposed on goods by reason of the fact that they cross a frontier. 68. With regard to this question, Mr and Mrs Weigel recall firstly that, according to Community case-law, '[a] national tax system which is liable to eliminate a competitive advantage held by imported products over domestic products would be manifestly incompatible with Article 95, which seeks to guarantee that internal 66. From the account of the Austrian tax charges have no effect on competition provisions given in these proceedings it is between domestic and imported pro- quite clear that the NoVA, like similar ducts'. 15 charges that exist in other Member States, 14 is not levied upon the crossing of the frontier, but upon the sale, for on-road use, of a vehicle not yet registered in the state, upon the commercial hiring out of such a vehicle, or upon its first-time registration. It cannot therefore be regarded 69. Now, according to the plaintiffs in the either as a customs duty or as a charge main proceedings, the disputed tax has just having equivalent effect prohibited under such an effect, because, by virtue of the fact Articles 23 EC and 25 EC, but rather as a that it is charged only on second-hand cars measure falling within a general system of imported from other Member States, internal taxation. thereby increasing their price, the NoVA eliminates the competitive advantage on the Austrian market that those cars would otherwise hold. As a consequence, a tax such as the NoVA is manifestly incompa- tible with Article 90 EC.

72. As for the surcharge, while it is true 75. In order to ascertain whether or not the that this does not apply to all vehicles, since base tax is discriminatory for present it is due only if liability for the base tax purposes, it is necessary to compare the accrues otherwise than upon a supply, it tax charged on imported used cars, such as nevertheless performs an equalising func- those with which the main proceedings are tion in that it compensates for the fact that concerned, with that charged on identical the NoVA basis of assessment is lower in used cars already on the Austrian market. those circumstances, being exclusive of VAT.

76. In this regard, I too would observe — as the Commission does — that the No VA is a single-stage tax, payable at the latest upon first-time registration. Consequently, 73. The Commission, for its part, having while it is true that the purchaser of a used noted that in general a tax is incompatible vehicle already registered in Austria does with Article 90 EC if it bears more heavily not pay the NoVA directly, the price he or on imported products than on similar she pays for the vehicle is still one that domestic products, goes on to analyse the already includes a residual portion of the base tax and the surcharge separately in the NoVA, which reduces in line with the light of that test. While the base tax, in its depreciation for the use of the vehicle.

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77. There is therefore no discrimination the actual depreciation of the vehicle. Only between domestic used vehicles and if that is so will the tax charged on imported used vehicles if the NoVA charged imported vehicles not 'in any case exceed on the latter does not exceed the amount of the amount of the residual tax incorporated the residual NoVA incorporated in the price in the value of similar second-hand vehicles of a similar used vehicle available on the already registered in the national terri- Austrian market. tory' 16 and can the tax in question be regarded as compatible with Article 90 EC.

79. However, the plaintiffs in the main proceedings complain that the fixed scale applied by the Austrian tax administration to determine the value of their vehicles — in 82. I therefore conclude that a tax such as this instance by reference to the Eurotax the NoVA base tax, the amount of which is value — did not satisfy the above test, since calculated using fixed scales to determine it produced an inflated reference value and, the value of an imported used vehicle, does hence, an excessive and discriminatory not in itself give rise to discrimination charge to tax. prohibited by Article 90 EC provided the fixed scales precisely reflect the actual depreciation of the vehicle and the taxable value imputed to the vehicle thus corre- sponds exactly to the value of a similar used vehicle to be found on the domestic market. It is for the national court, however, to 80. On this point, however, I would agree determine whether the fixed scale method with the Commission, when it observes that used by the Austrian administration satis- the use of fixed scales to determine the fies these conditions. value of an imported used vehicle does not in itself give rise to discrimination, provided that the fixed scales precisely reflect — as 16 — Case C-393/98 Gomes Valente [2001] ECR I-1327, the Community case-law has clarified — Paragraph 28.

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18 —Case C-90/94 Haahr Petroleum [1997] ECR I-4085, paragraph 29. 17— Case 193/85 Co-Frutta [1987] ECR 2085, paragraphs 11 19 —Case 106/84 Commission v Denmark [1986] ECR 833, to 13, and Case C-343/90 Lourenço Dias [1992] ECR paragraph 21 and Case C-90/94 Haahr Petroleum I-4673, paragraph 53. (above), paragraph 30.

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88. I therefore propose that the second The third question question referred by the national court be answered as follows:

89. By its third question, the referring court essentially asks whether the surcharge provided for by Paragraph 6(6) of the No VAG is compatible with the harmonised rules on value added tax brought in by the Sixth VAT Directive.

Since they do not constitute customs duties or charges having equivalent effect, taxes such as the NoVA are not contrary to Articles 23 EC and 25 EC. 90. Only Mr and Mrs Weigel propose that this question be answered in the negative. They argue that the surcharge in question is in the final analysis a disguised turnover tax and, as such, is incompatible with the Sixth VAT Directive, in particular Article 33 thereof, which prohibits the maintenance of national taxes other than VAT which have the characteristics of a turnover tax.

94. The Court has consistently held that the purpose of Article 33 of the Sixth Directive 'is to prevent the introduction of 97. In the first instance, it does not apply taxes, duties and charges which, through generally to transactions relating to goods being levied on the movement of goods and or services nor does it apply at all stages of services in a way comparable to VAT, production and distribution, since it has to would jeopardise the functioning of the be paid only in respect of certain transac- common system of VAT. Taxes, duties and tions concerning a particular class of charges must in any event be regarded as products, motor vehicles, and within that being imposed on the movement of goods class only those vehicles which have not and services in a way comparable to VAT if previously been registered in the country. they exhibit the essential characteristics of VAT'. 20

IV — Conclusion

100. In the light of the foregoing considerations, I propose that the Court answer the questions referred by the Verwaltungsgerichtshof as follows:

(1) A national measure imposing a tax such as the NoVA base tax — which is payable upon the first-time registration in the state of a motor vehicle and is calculated on the basis of the value of the vehicle and its fuel consumption — on a migrant worker moving to Austria from another Member State to take up employment there and importing his or her own vehicle into that country and registering it, is not contrary to Article 39 EC.

Nor is such a measure contrary to the rules on tax exemptions applicable to permanent imports from a Member State of the personal property of individuals laid down by Directive 83/183 and, specifically, Article 1 thereof. I - 5003

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(2) Since they do not constitute customs duties or charges having equivalent effect, taxes such as the No VA are not contrary to Articles 23 EC and 25 EC.