C-365/02 Lindfors

JUDGMENT OF THE COURT (First Chamber)

15 July 2004 *

In Case C-365/02,

REFERENCE to the Court under Article 234 EC by the Korkein hallinto-oikeus (Finland) for a preliminary ruling in the proceedings pending before that court brought by

Marie Lindfors,

on the interpretation of Article 1 of Council Directive 83/183/EEC of 28 March 1983 on tax exemptions applicable to permanent imports from a Member State of the personal property of individuals (OJ 1983 L 105, p. 64),

THE COURT (First Chamber),

composed of: P. Jann, President of the Chamber, A. Rosas, S. von Bahr, R. Silva de Lapuerta and K. Lenaerts (Rapporteur), Judges,

Advocate General: C. Stix-Hackl, Registrar: H. von Holstein, Deputy Registrar,

* Language of the case: Finnish.

after considering the written observations submitted on behalf of:

— Ms Lindfors, by P. Snell, oikeustieteen kandidaatti,

— the Finnish Government, by T. Pynnä, acting as Agent,

— the Danish Government, by J. Bering Liisberg, acting as Agent,

— the Greek Government, by P. Panagiotounakos, D. Kalogiros and P. Mylonopoulos, acting as Agents,

— the Commission of the European Communities, by R. Lyal and I. Koskinen, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Ms Lindfors, represented by P. Snell; the Finnish Government, represented by T. Pynnä; the Danish Government, represented by J. Molde, acting as Agent; the Greek Government, represented by M. Apessos, acting as Agent; and the Commission, represented by R. Lyal and I. Koskinen, at the hearing on 15 January 2004, after hearing the Opinion of the Advocate General at the sitting on 4 March 2004,

gives the following

Judgment

Legal context and the dispute

1By order of 10 October 2002, received at the Court on 14 October 2002, the Korkein hallinto-oikeus (Supreme Administrative Court) referred to the Court for a preliminary ruling under Article 234 EC a question on the interpretation of Article 1 of Council Directive 83/183/EEC of 28 March 1983 on tax exemptions applicable to permanent imports from a Member State of the personal property of individuals (OJ 1983 L 105, p. 64).

2That question was raised in proceedings between Ms Lindfors and the Finnish authorities concerning the car tax under Finnish legislation to which she was assessed following the transfer of her residence to Finland.

Legal background

Relevant provisions of Directive 83/183

3Article 1 of Directive 83/183 provides:

'1. Every Member State shall, subject to the conditions and in the cases hereinafter set out, exempt personal property imported permanently from another Member State by private individuals from turnover tax, excise duty and other consumption taxes which normally apply to such property.

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.'

Finnish legislation

4The relevant provisions of national law are in the Autoverolaki (1482/1994) (Law on car tax) of 29 December 1994, in the version applicable in 1999 ('the Law on Car Tax').

5Paragraph 1(1) of the Law on Car Tax prescribes that that tax (or 'autovero') is 'payable to the State before registration or bringing into use of [a private vehicle] in Finland'.

6According to Article 2 of that law, 'bringing into use in Finland means use of the vehicle in traffic in Finnish territory even if the vehicle is not registered in Finland'. That provision continues: 'However, the use exclusively for his own needs for up to six months ... of a vehicle registered in a State other than Finland temporarily imported for his own use by a natural person permanently resident in a State other than Finland is not regarded as taxable use of a vehicle'.

7Under Paragraph 4(1) of that law,'[t] he person liable to pay car tax is the importer of the vehicle or the manufacturer of a vehicle manufactured in Finland'. Similarly, Article 5 of the law states that '[t]he person liable to pay car tax must also pay value added tax on the car tax'.

8At the material time for the main proceedings, Paragraph 6(1) of the Law on Car Tax stated:

'The tax due is the taxable value of the car, reduced by FIM 4 600. The amount of the tax is, however, always at least 50 % of the taxable value of the vehicle'.

9Under Paragraph 7(1) of that law, the tax levied on an imported used car is the tax on an equivalent new vehicle, but reduced according to a proportional scale which takes into account the period (calculated in months) during which the vehicle has been in use.

10Under Paragraph 25(1) of that law, '[t]he tax on one privately owned taxable vehicle imported in connection with a persons transfer of residence to the country is reduced by up to FIM 80 000', if the conditions set out in that provision are satisfied.

The main proceedings and the question referred for a preliminary ruling

11After residing in other Member States, Ms Lindfors moved permanently to Finland, and in connection with that transfer of residence imported into Finland on 4 August 1999 a private vehicle which was her personal property, which she had brought into use in the Netherlands in 1995 after buying it in Germany.

12In a tax assessment of 4 August 1999, the Hangon tullikamari (Hanko Customs Board) (Finland) granted Ms Lindfors a tax reduction of FIM 80 000 and fixed the car tax payable by her at FIM 16 556, plus value added tax of FIM 3 642, making a total of FIM 20 198 (approximately EUR 3 400).

13Ms Lindfors brought proceedings against that decision in the Helsingin hallinto-oikeus (Helsinki Administrative Court) (Finland). She considered that autovero constituted a consumption tax prohibited under Article 1(1) of Directive 83/183.

14Her action was dismissed. The Helsingin hallinto-oikeus held that, as a tax connected with the registration or use in traffic of a vehicle in Finland, autovero was to be regarded as a specific tax connected with the use of property within the country within the meaning of Article 1(2) of Directive 83/183, such a tax being outside the scope of that directive.

15Ms Lindfors sought leave from the Korkein hallinto-oikeus to appeal against the decision of the Helsingin hallinto-oikeus.

16The Korkein hallinto-oikeus decided to stay the proceedings and refer the following question to the Court for a preliminary ruling:

'Is Article 1 of Directive 83/183 ... to be interpreted as meaning that car tax (autovero) charged under the Law on Car Tax (Autoverolaki) on a vehicle imported into Finland from another Member State in connection with a transfer of residence is a consumption tax within the meaning of Article 1(1) of the directive, or is it a specific duty or tax connected with the use of such property within the country within the meaning of Article 1(2)?'

The question referred for a preliminary ruling

Preliminary remarks

17The Court has already held, in its judgment of 19 September 2002 in Case C-101/00 Tulliasiamies and Siilin [2002] ECR I-7487, paragraphs 61 and 80, that autovero constitutes discriminatory internal taxation prohibited by Article 90 EC in so far as the amount of that tax on an imported used car exceeds the amount of the residual tax incorporated in the value of a similar used car already registered in Finnish territory.

18The national court's question concerns solely the lawfulness of levying a tax such as autovero — regardless of its method of calculation or amount — on the occasion of a transfer of residence from one Member State to another.

Observations submitted to the Court

19Ms Lindfors submits that autovero is a consumption tax which is levied because of the importation of a vehicle into Finnish territory. Such a tax should fall within the exemption laid down in Article 1(1) of Directive 83/183.

20That autovero is a consumption tax within the meaning of that provision follows, according to Ms Lindfors, not only from the characteristics of that tax but also indirectly from the scope of Council Directive 83/182/EEC of 28 March 1983 on tax exemptions within the Community for certain means of transport temporarily imported into one Member State from another (OJ 1983 L 105, p. 59) and from proposal 98/C 108/12 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 (OJ 1998 C 108, p. 75, and — amended proposal — OJ 1999 C 145, p. 6).

21The Finnish, Danish and Greek Governments observe that autovero cannot be equated to a tax which normally applies to personal property imported permanently from another Member State by private individuals within the meaning of Article 1(1) of Directive 83/183. The determining circumstance for liability to the tax is the use of the vehicle on the highway in Finland, even if that tax is usually charged on the occasion of registration. In any event, autovero, as a specific tax connected with use or registration, is expressly excluded from the scope of that directive by virtue of Article 1(2) of the directive.

22The Commission notes that Article 1(2) of Directive 83/183 excludes 'motor vehicle registration fees' from the scope of the directive. In contrast to taxes which are intended to contribute to the financing of the public administration, 'fees' constitute the consideration for services provided by the public authorities. According to the Commission, autovero is not a 'fee' charged on registration but a consumption tax prohibited by Article 1(1) of that directive in connection with a transfer of residence. That prohibition relates to taxes whose chargeable event is the importation of property in connection with a transfer of residence.

23The Commission submits that tax has already been charged on the registration of the vehicle and its bringing into use in the State of origin. Freedom of movement would be compromised if the Member State of destination could charge tax again on that basis. The provisions of Directive 83/183 must be interpreted in the light of the fundamental right to freedom of movement enshrined in Article 18 EC for citizens of the Union.

Findings of the Court

24It must first be examined whether, as Ms Lindfors and the Commission claim, autovero falls within the scope of Article 1(1) of Directive 83/183. It should be noted in this respect that the name given to a tax in national law is not as such decisive for the assessment of whether the tax in question is one referred to in that provision.

25Reading Paragraphs 1 and 2 of the Law on Car Tax together shows that autovero is payable before the registration or bringing into use of a private vehicle in Finland. It is apparent from the case-file, in particular from Article 2 of that law and the observations of the Finnish Government and Ms Lindfors, that, with the exception of temporary import, the use of a vehicle on the Finnish road system entails the charging of autovero. Thus the Government explains that the determining circumstance for the charging of that tax is the use of the car in traffic, even though the tax is usually charged on the occasion of registration. Ms Lindfors similarly confirms that the Law on Car Tax is based on the principle that any use of the vehicle, however minimal, entails the charging of the tax.

26In those circumstances, a tax such as autovero cannot be regarded as a tax connected with importation falling within the scope of the exemption laid down in Article 1(1) of Directive 83/183. The chargeable event for that tax is the use of a vehicle on Finnish territory, which is not necessarily connected with the act of importation (see, to that effect, Case C-387/01 Weigel [2004] ECR I-4981, paragraph 47).

27It follows that a tax with the characteristics of autovero does not fall within the scope of the tax exemption laid down in Article 1(1) of Directive 83/183.

28That conclusion is supported by Article 1(2) of Directive 83/183. Since autovero is payable as a result of the use of a vehicle in Finland, taxes such as that at issue in the main proceedings constitute 'specific ... duties and taxes connected with the use of ... property within the country' within the meaning ofthat provision.

29Nor can Ms Lindfors base her argument on the scope of Directive 83/182, which concerns tax exemptions applicable on the temporary import of certain means of transport. The circumstance that, in accordance with Article 1 of that directive, a citizen of the Union who temporarily imports a vehicle into Finland is exempted from autovero does not allow the conclusion that that tax is within the tax exemption established by Directive 83/183, which relates to the permanent import of vehicles.

30The proposal for a directive 98/C 108/12 does not allow Directive 83/183 to be interpreted as Ms Lindfors and the Commission do. On the contrary, it is apparent from the fourth, fifth and seventh recitals in the preamble to that proposal that the adoption of a directive prohibiting the Member States from imposing, as stated in Article 1 of the proposal, 'excise duties, registration taxes or other consumption taxes ... on private motor vehicles registered in other Member States and brought into that Member State permanently in connection with the transfer of normal residence of a private individual' has become necessary precisely because of the inadequacy of the rules laid down by Directive 83/183, as Advocate General Tizzano pointed out in his Opinion in Weigel (point 52).

31It is true that, as the Commission points out, autovero is capable of having a negative influence on decisions of citizens of the Union to exercise their right to freedom of movement as enshrined in particular by Article 18 EC.

32Although the national court has formally limited its question to the interpretation of Article 1 of Directive 83/183, that does not preclude the Court from providing the national court with all those elements for the interpretation of Community law which may be of assistance in adjudicating on the case pending before it, whether or not that court has specifically referred to them in its question (see, to that effect, Case C-241/89 SARPP [1990] ECR I-4695, paragraph 8; Case C-315/92 Verband Sozialer Wettbewerb ('Clinique') [1994] ECR I-317, paragraph 7; Case C-87/97 Consorzio per la tutela del formaggio Gorgonzola [1999] ECR I-1301, paragraph 16; and Weigel, paragraph 44).

33The Court must therefore examine the effect of Article 18 EC, so that the national court can assess whether the application of autovero in a case such as that in the main proceedings is compatible with the requirements deriving from that provision.

34It has already been held that the EC Treaty offers no guarantee to a citizen of the Union that transferring his activities to a Member State other than that in which he previously resided will be neutral as regards taxation. Given the disparities in the tax legislation of the Member States, such a transfer may be to the citizen's advantage in terms of indirect taxation or not, according to circumstance. It follows that, in principle, any disadvantage, by comparison with the situation in which that citizen carried on activities prior to that transfer, is not contrary to Article 18 EC, provided that the legislation concerned does not place that citizen at a disadvantage as compared with those already subject to such a tax (see Weigel, paragraph 55).

35The case-file shows that the Law on Car Tax provides, in Paragraph 25(1), for a tax reduction of up to FIM 80 000 (EUR 13 455) inter alia for citizens of the Union exercising their right to freedom of movement in connection with a transfer of residence to Finland. It will be for the national court to ascertain whether the application of that provision and any other provisions of national law is capable of ensuring that, as regards that tax, Ms Lindfors is not placed in a less favourable position than that of citizens who have been permanently resident in Finland. Should the national court find that such a less favourable situation exists, it will have to examine whether that difference in treatment is justified by objective considerations independent of the residence of the persons concerned and proportionate to the legitimate aim pursued by national law (see Case C-224/98 D'Hoop [2002] ECR I-6191, paragraph 36).

36In the light of all the foregoing, the national court's question must be answered as follows:

Article 1 of Directive 83/183 must be interpreted as not precluding, in connection with a transfer of residence of the owner of a vehicle from one Member State to another, a tax such as that laid down by the Law on Car Tax from being charged before the registration or bringing into use of the vehicle in the Member State to which residence is transferred. However, having regard to the requirements deriving from Article 18 EC, it is for the national court to ascertain whether the application of national law is capable of ensuring that, as regards that tax, that owner is not placed in a less favourable situation than that of citizens who have been permanently resident in the Member State in question and, if necessary, whether such a difference of treatment is justified by objective considerations independent of the residence of the persons concerned and proportionate to the legitimate aim pursued by national law.

Costs

37The costs incurred by the Finnish, Danish and Greek Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT (First Chamber),

in answer to the question referred to it by the Korkein hallinto-oikeus by order of 10 October 2002, hereby rules:

Article 1 of Council Directive 83/183/EEC of 28 March 1983 on tax exemptions applicable to permanent imports from a Member State of the personal property of individuals must be interpreted as not precluding, in connection with a transfer of residence of the owner of a vehicle from one Member State to another, a tax such as that laid down by the Autoverolaki (1482/1994) (Law on Car Tax) from being charged before the registration or bringing into use of the vehicle in the Member State to which residence is transferred. However, having regard to the requirements deriving from Article 18 EC, it is for the national court to ascertain whether the application of national law is capable of ensuring that, as regards that tax, that owner is not placed in a less favourable situation than that of citizens who have been permanently resident in the Member State in question and, if necessary, whether such a difference of treatment is justified by objective considerations independent of the residence of the persons concerned and proportionate to the legitimate aim pursued by national law. Jann Rosas

Silva de Lapuerta von Bahr

Lenaerts Delivered in open court in Luxembourg on 15 July 2004.

R. Grass

Registrar P. Jann

President of the First Chamber

OPINION OF ADVOCATE GENERAL STIX-HACKL delivered on 4 March 2004 1

I — Introduction

1In this reference for a preliminary ruling the Korkein hallinto-oikeus (Supreme Administrative Court) (Finland) seeks an interpretation of Article 1 of Council Directive 83/183/EEC of 28 March 1983 on tax exemptions applicable to permanent imports from a Member State of the personal property of individuals (hereinafter: 'the Directive'). 2 In particular it concerns the question whether the car tax payable under the Autoverolaki (Law on car tax) (1482/1994) before a vehicle is registered or brought into use is a duty or a tax from which a vehicle imported into Finland in connection with a transfer of residence should be exempted under the above provision.

II — Legal framework

A — National law

2Under Paragraph 1(1) of the Autoverolaki (1482/1994) of 29 December 1994 in the version in force in 1999 (hereinafter: 'AVL'), car tax (hereinafter: 'Autovero') is payable before a vehicle is registered or brought into use in Finland.

3Bringing into use means use of the vehicle in traffic on Finnish territory, even if the vehicle is not registered (Article 2 of the AVL).

4Under the main provision concerning liability to tax, Article 4(1) of the AVL, the Autovero is payable by the importer of a vehicle or the manufacturer of a vehicle manufactured in Finland.

5Additionally, under Article 5 of the AVL, taxpayers are also liable to pay a value added tax on the Autovero of an amount laid down in the Arvonlisäverolaki (Value added tax law) (1501/93) (hereinafter: Arvonlisäverolaki').

6The amount of the Autovero is, under Paragraph 6(1) of the AVL, the amount of the taxable value of the vehicle less FIM 4 600 (now EUR 770), but in all cases at least 50 % of the taxable value of the vehicle.

7Under Article 7(1) of the AVL, the tax levied in respect of an imported used vehicle is that on a new vehicle, but reduced on a percentage basis according to the number of months for which the vehicle has been in use. Under Article 11(1) and (2) of the Law, the basis of the taxable value of the imported vehicle is its acquisition value to the taxpayer, which is set according to the customs value of the vehicle.

8Under Article 25(1) of the AVL, the tax levied on a vehicle imported by an individual in connection with a transfer of his residence to Finland and privately owned. may be reduced in accordance with the conditions laid down therein by a maximum of FIM 80 000 (now EUR 13 450).

B — Community law

9According to the recitals of the Directive, its objective is to eliminate tax obstacles to the free movement of persons within the Community. The scope of the Directive is defined in Article 1 as follows:

'(1) Every Member State shall, subject to the conditions and in the cases hereinafter set out, exempt personal property imported permanently from another Member State by private individuals from turnover tax, excise duty and other consumption taxes which normally apply to such property.

(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.'

III — Facts, main proceedings and question referred for a preliminary ruling

10Ms Lindfors, who had resided abroad for several years, imported as a private individual a car belonging to her of the Audi A6 Avant make on 4 August 1999 in the course of her transfer of residence from another Member State of the European Communities to Finland. She had bought the car, which had left the factory on 20 March 1995, in Germany and brought it into use on 5 April 1995 in the Netherlands.

11The Hangon tullikamari (Hanko Customs Board) by tax decision of 4 August 1999 granted Ms Lindfors a tax reduction of FIM 80 000 in accordance with Article 25(1) of the AVL and assessed the Autovero payable by her at FIM 16 556 plus FIM 3 642 value added tax, making a total of FIM 20 198.

12Ms Lindfors applied to the Helsingin hallinto-oikeus (Helsinki Administrative Court) for the tax decision to be set aside and the taxes paid by her to be refunded. She submitted that the Autovero constitutes a consumption tax within the meaning of Article 1(1) of the Directive which may not be levied on her car imported in connection with a transfer of residence.

13The Helsinki Administrative Court dismissed the application. It took the view that the Autovero is a tax connected with the registration or use of the vehicle in traffic on Finnish territory and that therefore it is to be regarded as a specific tax connected with the use of property within the country within the meaning of Article 1(2) of the Directive, which is not covered by the Directive.

14Thereupon Ms Lindfors sought leave to appeal to the Korkein hallinto-oikeus and asked in her appeal for the decision of the Helsinki Administrative Court and the tax decision of the Customs Board to be set aside.

15In order to resolve the question whether in the light of the Directive a car tax such as the Autovero may be levied on a vehicle imported in connection with the transfer of residence, the Supreme Administrative Court decided by order of 10 October 2002 to make a reference to the Court for a preliminary ruling on the following question:

Is Article 1 of Council Directive 83/183/EEC on tax exemptions applicable to permanent imports from a Member State of the personal property of individuals to be interpreted as meaning that car tax charged under the Autoverolaki on a vehicle imported into Finland from another Member State in connection with a transfer of residence is a consumption tax within the meaning of Article 1(1) of the directive, or is it a specific duty or tax connected with the use of such property within the country within the meaning of Article 1(2)?

IV — The question referred for a preliminary ruling

A — Introductory remarks

16With the exception of value added tax — for which incidentally several derogations apply in connection with the purchase of new vehicles 3 — the taxation of motor vehicles in the Community has not been harmonised to any extent. 4

17Correspondingly the taxes and duties payable on private cars in the Member States vary considerably not only in their amount but also in their structure. 5 Certain taxes in one Member State have no counterpart whatsoever in other Member States. One must therefore bear in mind, in particular in a case such as the present one in which the referring court seeks to ascertain whether a particular national tax falls within a tax definition set out in a Community instrument, that there is a lack of common concepts which would permit an exact classification of different taxes.

18For the purposes of exposition — and because the parties concerned with this case have evidently also assumed such a classification — I should like however to make a rough distinction between three different types of tax and duty which are levied by Member States in respect of private cars.

19Firstly, there are one-off taxes, I will call them 'registration taxes', which are payable on the purchase of a car or as a condition for bringing it into use on the territory of a Member State.

20Secondly, almost all Member States also levy taxes — calculated according to differing criteria — payable periodically or, as the case may be, annually, known, for example, in Germany and Austria as 'Kraftfahrzeug steuern' (car taxes).

21Finally, duties may be levied in connection with the registration of a vehicle in a Member State to cover the administration costs (registration fees).

22It emerges from the case-file and the observations of the Finnish Government that in each of those cases Finland also levies such taxes on cars.

23The Autovero, as is already clear from the AVL, is a one-off tax payable on cars and other categories of vehicle before their registration or bringing them into use, calculated on the basis of their taxable value; additionally under the Finnish Arvonlisäverolaki so-called value added tax is also levied on the amount of the Autovero.

24Additionally, there are also taxes payable periodically, that is, car taxes in the narrower sense, the Ajoneuvovero (vehicle tax, or 'vignette') and Moottoriajoneuvovero (diesel tax).

25Finally, duties are also payable in Finland on the registration of a vehicle to cover the administrative costs associated with the registration (registration fee).

26The present case only concerns the Autovero which the Court already had to consider in the case of Siilin and in which I also delivered my Opinion. 6

27That case raised the question whether a tax such as the Autovero in the form and the amount as was in force at the time in respect of a used vehicle imported from another Member State constitutes an unlawful discriminatory domestic tax, to which the Court replied in the affirmative. The present case however concerns the question whether in specific circumstances, that is, when a private car is permanently imported within the scope of a transfer of residence, a tax such as the Finnish Autovero — irrespective of its amount or the method of its calculation — may be levied at all.

28The referring court essentially wishes to know whether the tax exemption provided for by Article 1 of the Directive precludes such taxation.

29I should finally like to point out that the Commission has already raised that question in connection with the Standard Fuel Consumption Tax ('Normverbrauchsabgabe' or 'NOVA') levied in Austria in the context of the reference for a preliminary ruling in Case C-387/01, also currently pending before the Court, which however primarily concerns the compatibility of the NOVA with Articles 23 EC, 25 EC and 39 EC and with the Sixth Value Added Tax Directive, and that Advocate General Tizzano has in his Opinion in that case also delivered his view on the matter. 7

B — Main arguments of the parties

30According to Ms Lindfors and the Commission, the Directive in setting out a principle of tax exemption precludes the levying of tax in a situation such as that arising in the main proceedings. In their opinion the Autovero constitutes a consumption tax levied on or by reason of permanent importation, to which Article 1 (1) applies.

31Ms Lindfors argues inter alia that in reality, or rather judging by the formalities of the tax declaration, the Autovero is levied by reason of the fact of importing the vehicle to Finland. That it constitutes a consumption tax within the meaning of Article 1(1) of the Directive follows also indirectly from the scope of Council Directive 83/182/EEC of 28 March 1983 on tax exemptions within the Community for certain means of transport temporarily imported into one Member State from another 8 and from 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 (hereinafter: 'Commission proposal').

32The Commission contends that Article 1 (1) of the Directive precludes the levying of taxes whose chargeable event is the importation. This prohibition cannot be circumvented by utilising instead of the importation an alternative chargeable event, such as registration. The Commission also points out that the Directive must be interpreted in the light of the provisions on free movement of persons and to avoid double taxation.

33The Finnish, Danish and Greek Governments, which have submitted observations in the present case, on the other hand take the view that a tax such as the Autovero is not covered by the tax exemption provided for in Article 1(1) of the Directive, referring in this respect also to the opinion of Advocate General Tizzano in the case of Weigel. They emphasise, essentially in agreement with one another, that the Autovero does not constitute a tax which is levied on importation but rather one which is linked to utilisation. If the vehicle is not brought into use in Finland — such as in the case of a car which is to be exhibited in a museum, as the Finnish Government explains by way of example — the Autovero is not payable. Accordingly it is to be seen as a tax on the use of the vehicle or as 'motor vehicle registration fees' within the meaning of Article 1(2) of the Directive and therefore is not included within the tax exemption.

34In so far as the governments make reference to the Commission proposal or to Directive 83/182, they draw the opposite conclusion from those texts to Ms Lindfors or the Commission as to the interpretation of the scope of the Directive. The governments also point out that registration taxes such as the Autovero have not yet been harmonised within the Community and that therefore the possibility of double taxation must also be accepted as a consequence of that situation. The Danish Government explains that the derogation concerning vehicle registration taxes in Article 1(2) of the Directive was inserted into the Directive's text by the Council on the initiative of Denmark for the very purpose of expressly excluding registration taxes such as the Autovero from the scope of the Directive.

35The Commission agreeing with Ms Lindfors, however, interprets the derogation contained in Article 1(2) as only referring to the administrative costs or fees which are incurred on registration and bases that interpretation above all on the French and English language versions of the Directive which refer to the 'droits' and 'fees' for the registration of vehicles.

36The governments submitting observations reject that interpretation for linguistic and logical reasons. In particular, Community law does not in any case preclude the levying of fees to cover administrative costs.

C — Appraisal

37Under Article 1(1) of the Directive, the scope of the Directive extends to consumption taxes — 'turnover tax, excise duty and other consumption taxes' — which 'normally' apply to 'personal property imported permanently from another Member State by private individuals'. Those consumption taxes are contrasted in Article 1(2) with '[s]pecific and/or periodical duties and taxes connected with the use of such property' which are not in any event to be covered by the Directive. '[M]otor vehicle registration fees, road taxes and television licences' are expressly cited as examples of such taxes.

38Evidently, then, to delimit the Directive's scope, it distinguishes between those (consumption) taxes and duties which are connected with the importation of property and those which apply to its use within the country.

39On an initial view that distinction also appears to be obvious, since it would not be very clear why a Community citizen who permanently transfers his place of residence to another Member State and as a consequence lives and uses property there should be exempted from taxes which relate to such use of the property in that Member State.

40By contrast, taxes and duties which are linked to the importation of property do very probably constitute an immediate tax obstacle to the free movement of persons.

41As regards the question concerning which taxes or duties relating to importation might be envisaged under Article 1(1) of the Directive, customs duties or charges of an equivalent effect within the meaning of Articles 23 EC and 25 EC, for example, are not to be considered (although according to the Court's case-law it is of course a very characteristic of those charges that they are levied by reason of importation or the crossing of the frontier of a Member State). 11 Since such financial burdens are in any case precluded by primary law and also cannot under Article 99 EC be subject to harmonisation measures, it is clear that the Directive does not concern them.

42Rather, Article 1(1) of the Directive is directed towards internal taxation — to use the terminology of Article 90 EC — or indirect taxes or, more accurately, consumption taxes which use importation as the chargeable event.

43Whilst at present examples of such taxes may not immediately spring to mind, it must however not be forgotten that the Directive goes back to a time before the introduction of the internal market on 1 January 1993 and the progress thereby achieved in removing tax obstacles to intra-Community trade. At that time Member States could in particular still levy turnover taxes on imports or other (special) consumption taxes which for taxation purposes were linked to the fact of importation of goods.

44As regards value added taxes, the principle of imposing tax on imports within intra-Community trade was abolished by Directive 91/680/EEC as a condition of eliminating fiscal frontiers and was replaced by the concept of imposing tax on acquisitions according to the Member State of destination. Since then turnover taxes on imports are only permitted in the context of trade with third countries.

45Under Article 33 of the Sixth Value Added Tax Directive Member States are indeed left free to maintain or introduce at their discretion consumption taxes or other indirect taxes, provided that they cannot be characterised as turnover taxes within the meaning of the Sixth Directive or compromise the functioning of the common value added tax system. However, in respect of consumption taxes - for example, also for special consumption taxes on motor vehicles — it must be noted that under Article 3(3) of the 'System Directive' 92/12/EEC those taxes may 'not give rise to border-crossing formalities' in intra-Community trade. Thus whilst the possibility for Member States to introduce or maintain special consumption taxes whose chargeable event is linked to importation or the crossing of a border is de facto considerably restricted, it is however not completely excluded.

46I do not wish to elaborate further on these observations, but they may serve as an introduction to my examination of the compatibility of a tax with the characteristics of the Autovero with the tax exemption provided for by the Directive.

47Under the AVL, the chargeable event of the Autovero is linked to the registration of the vehicle or bringing it into use in Finland.

48Even the Commission and Ms Lindfors assume, however, that the tax exemption provided for under Article 1(1) of the Directive relates to taxes whose chargeable event is connected to importation. They argue nevertheless that, despite the AVL providing for the linking of the Autovero to registration or bringing into use, in reality it must be seen as a tax which is levied on importation.

49At the hearing the Finnish Government demonstrated, in my opinion convincingly, that in practice neither the tax declaration relating to the Autovero nor the payment thereof needs to take place on crossing the border or on importation and that the customs formalities described by Ms Lindfors relate to importation from a third country. It cannot therefore be concluded from the practical border-crossing arrangements that a tax such as the Autovero in reality constitutes a tax which is levied on or because of importation.

50I consider to be more significant the Commission's submission that a tax such as the Autovero which in formal terms is linked to registration or bringing into use is also to be regarded as a consumption tax or turnover tax levied on importation within the meaning of Article 1(1) of the Directive and that that provision may not be circumvented by providing for an alternative chargeable event to that of importation.

51In that respect it must be firstly noted that — as the Finnish Government illustrated with its example of a vehicle to be exhibited in a museum — a tax such as the Autovero does not operate as a 'true' consumption tax levied on importation, because despite the transfer to Finland liability does not arise or does not arise until the car is brought into circulation or registered there.

52It could of course be argued that in reality the link with registration or the bringing into use constitutes a substitute link which is in practical terms comparable with the fact of importation, since in respect of the vast majority of vehicles brought into a Member State it can be assumed that the vehicle is also to be used.

53The Court, in a different connection to that of the present case, had in its judgment in Case 391/85 similarly to deal with the Commission's submission that the registration tax for new cars applicable at that time in Belgium in reality constituted a value added tax. The Belgian Government contended inter alia that the two taxes should be distinguished from one another because they were linked to different events (delivery/ registration).

54The Court observed in that regard that 'that argument could be accepted only if the two taxes were genuinely independent of each other'. In that case it came to the conclusion that the registration tax was not independent, but that was against the background in that case that thanks to an offsetting mechanism a direct link existed between the registration tax and the value added tax, eliminating the difference between the chargeable events upon which the two taxes became chargeable. 18

55In the present case the Autovero however does not have a comparable link to a value added tax which might be payable on importation. In those circumstances the difference in terms of their respective chargeable events between a tax such as the Autovero and a consumption tax levied by reason of importation appears sufficiently material for it not to be possible to equate the former with the latter for the purposes of Article 1(1) of the Directive.

56I am therefore assuming that a tax such as the Autovero does not constitute a turnover tax, excise duty or other consumption tax levied on importation within the meaning of Article 1(1) of the Directive. The preceding observations have however also made it clear that those tax concepts cannot be strictly delineated and that the mere fact that a tax is levied as a result of or as a condition of registration does not in itself preclude also regarding it as a type of import-consumption tax.

57In that connection Article 1(2) of the Directive must now be examined. It emerges from the drafts of the Directive put forward at that time that that provision was not originally contained in the Commission's proposal and was incorporated into the Directive precisely to satisfy the wishes of several Member States seeking precision as to the Directive's scope. That provision also expressly mentions 'motor vehicle registration fees' which in the view of the governments submitting observations refers to taxes such as the Autovero.

58For several reasons I am not convinced by the Commission's submission that that only intends to refer to fees which may be payable on registration to cover administrative costs.

59Firstly, above all the Danish Government correctly pointed out, in particular at the hearing, that that argument cannot be supported convincingly by a purely literal interpretation of Article 1(2) of the Directive. Given the widely differing approaches and traditions of the Member States in the field of taxation, caution is from the outset called for in this matter. Whilst, for example, in the French text one can find grounds for the Commission's view in the distinction between 'taxes' and 'droits', little support for such a view can however be found, for example, in the German text with the expressions 'Steuern' and 'Abgaben', since both expressions can be used together synonymously.

60Secondly, 'motor vehicle registration fees' are cited in Article 1(2) of the Directive as an example of duties connected with the use of imported property. In the case of a duty covering administrative costs or as payment for administrative services that, by definition, would however not be so.

61Moreover, it must be observed that the fact that a tax such as the Autovero is not payable periodically and that it is payable (in the amount too) irrespective of the extent to which or for how long the vehicle is actually used following registration does not preclude classifying that tax as a duty connected with the use of property within the meaning of the Directive. That surely follows from Article 1 (2) of the Directive, under which not only periodical duties can be duties within the meaning of that provision ('[s]pecific and/or periodical duties').

62From the case-file and the observations of the Finnish Government it appears that a lawful bringing into use or operation of a vehicle in Finland is as a rule only permitted following the completion of registration. Payment of the Autovero therefore constitutes in any event a condition for the (lawful) use of a car in Finland.

63Such a tax may correctly be regarded as a duty connected with the use of property, which according to Article 1(2) of the Directive is expressly excluded from its scope.

64Furthermore, contrary to the argument of Ms Lindfors, it cannot automatically be concluded from the inclusion of registration taxes in the tax exemption under Directive 83/182 which concerns the mere temporary importation of vehicles that such taxes ought also to be included in the tax exemption under Directive 83/183 which concerns the permanent importation of the vehicle.

65The parties additionally referred to the Commission proposal for a successor provision to those directives, in which the prohibition on imposing taxes now expressly extends to registration taxes and the Autovero. Judging from its recitals, the objective of the proposal is to remove existing problems concerning the taxation of vehicles following a transfer of residence, so that the proposal evidently assumes rather that the tax exemption under the present directive does not (yet) concern registration taxes. But of course that does not really offer a reliable indication for interpreting the meaning of the present directive.

66Finally, the Commission's argument that the Directive should be interpreted in the light of the objectives pursued by tax harmonisation and the fundamental freedoms must be considered.

67It is doubtless the case that just as for Directive 83/182 also for that directive 'the provisions of the Directive must be interpreted in the light of the fundamental aims of the endeavour to harmonise VAT, in particular the promotion of freedom of movement for persons and goods and the prevention of double taxation.'

68In my view, however, no conclusions can be drawn therefrom on the basis of the Directive concerning motor vehicle taxes connected with registration such as the Autovero, which are, as set out above, excluded from the scope of the Directive.

69Furthermore, the prohibition on double taxation raised by the Commission — which, as is apparent from the case-law cited, constitutes an objective of harmonisation in the field of value added tax — does not apply automatically to all types of tax.

70Rather, in the field of vehicle taxation, as the Court concluded in the case of Cura Anlagen, Member States are free to exercise their powers of taxation in that area and registration appears to be 'the natural corollary of the exercise of those powers of taxation'. 'It is lawful for [the Member States] to allocate those powers of taxation amongst themselves ... , and to conclude agreements amongst themselves to ensure that a vehicle is subject to indirect taxation in only one of the signatory States'. 5

71It therefore follows that as Community 72. In the light of the foregoing the answer law stands with regard to motor vehicle to the question is that Article 1 of the registration taxes — such as the Autovero — Directive does not preclude the levying of a consequences of the lack of harmonisation in tax such as the Autovero which is levied on this area such as double taxation have to be vehicles brought from one Member State accepted; at best that could be prevented by into another Member State in connection voluntary measures of the Member States. with the transfer of a residence.

V — Conclusion

73I therefore propose that the Court answer the question as follows:

Article 1 of Council Directive 83/183/EEC of 28 March 1983 on tax exemptions applicable to permanent imports from a Member State of the personal property of individuals is to be interpreted as meaning that it does not preclude the levying of a tax such as car tax imposed under the Autoverolaki which is levied on vehicles imported from one Member State into another Member State in connection with a transfer of residence.

Notes

(1) Original language: German.

(2) OJ 1983 L 105. p. 64.

(3) Even in the case of an acquisition by a private individual new vehicles are, by way of derogation from the general rule, taxed according to the country of destination: see Article 28a of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, OJ 1977 L 145, p. 1 (hereinafter: 'Sixth Value Added Tax Directive').

(4) See Case C-451/99 Cum Anlagen [2002] ECR I-3193, paragraph 40.

(5) A useful overview of that issue can be found in the Communication from the Commission to the Council and the European Parliament of 6 September 2002 on the taxation of passengers cars in the European Union — options for action at national and Community levels, COM (2002) 431 final,a nd a Study on Vehicle Taxation in the Member States of the European Union of January 2002 produced for the Commission by TIS/PT (Consultores em Transportes Inovação e Sistemas, S.A.) available online at: http://europa.eu.int/comm/ taxation_customs/taxation/car_taxes/vehicle_tax_study_15-

(02) 2002.pdf.

(6) Case C-101/00 Sülin [2002] ECR I-7487.

(8) OJ 1983 L 105, p. 59.

(7) Case C-387/01 Weigel, Opinion of Advocate General Tizzano 9 - COM (1998) 30 final, OJ 1998 C 108, p. 75, as amended by delivered on 3 July 2003 [2004] ECR I-4981,I-4984, points 40 to 56. COM (1999) 165 final, OJ 1999 C 145, p. 6.

(10) Opinion cited in footnote 7, above.

(12) For an example see, for instance, the Belgian value added tax

(11) See inter alia Case C-383/01 De Danske Bilimportører [2003] on imports also levied on motor vehicles which was the ECR I-6065, paragraph 34. subject-matter of Case 249/84 Profant [1985] ECR 3237.

(13) Council Directive 91/680/EEC of 16 December 1991 supplementing the common system of value added tax and amending Directive 77/388/EEC with a view to the abolition of fiscal frontiers, Ol 1991 L 376. p. 1.

(14) See inter alia Joined Cases 93/88 and 94/88 Wisselink [1989] ECR 2671. paragraph 17, and Case 73/85 Kerrutt [1986] ECR

(221) 9, paragraph 22.

(15) Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products, Ol 1992 L 76, p. 1.

(16) See also Jatzke. 'Das neue Verbrauchsteuerrecht im EG-Binnenmarkt', Steuerrecht No 1, 1993, p. 41 at p. 42. For an example of a special consumption tax levied on vehicles, inter aha on their importation, see Case C-375/95 Commission v Greece [1997] ECR I-5981.

(17) Case 391/85 Commission v Belgium [1988] ECR 579, paragraphs 14 and 22.

(18) Ibid.. paragraph 25.

(19) Internal document No 6205/79 of the Council Working Group on Finance of 23 April 1979. p. 3, included, with the Council's permission, by the Danish Government in its written observations.

(20) Viewed in that way, the bringing of the vehicle into use on Finnish territory could constitute an alternative chargeable event ensuring in any event that the tax (already) becomes payable under the Autoverolaki even if the vehicle is, for example, used in traffic, contrary to the rules, without registration.

(21) See Article 1 together with Annex ! of the Commission proposal.

(22) In a similar vein see also Advocate General Tizzano in his Opinion in Case C-387/01, cited in footnote 7, above, points

(51) and 52.

(23) Case C389/95 Klattner [1997] ECR I-2719, paragraph 25; see inter alia also Case 249/84, cited in footnote 12, above, paragraph 25. Case 127/86 Ledoux [1988] ECR 3741, paragraph 11. and Case C-297/89 Ryborg [1991] ECR I-1943, paragraph 13.

(24) Ibid.

(25) See Case C-451/99, cited in footnote 4, above, paragraphs 40 and 41.