C-98/05 De Danske Bilimportører

JUDGMENT OF THE COURT (First Chamber)

Legal context and the dispute

1 June 2006 *

In Case C-98/05,

REFERENCE for a preliminary ruling under Article 234 EC from the Østre Landsret (Denmark), made by decision of 11 February 2005, received at the Court on 24 February 2005, in the proceedings

De Danske Bilimportører

v

Skatteministeriet,

THE COURT (First Chamber),

composed of P. Jann, President of the Chamber, J.N. Cunha Rodrigues, K. Lenaerts (Rapporteur), M.

Ilešič and E. Levits, Judges,

* Language of the case: Danish.

Advocate General: J. Kokott, Registrar: H. von Holstein,

having regard to the written procedure and further to the hearing on 23 February 2006,

after considering the observations submitted on behalf of:

— De Danske Bilimportører, by K. Dyekjær, advokat,

— the Danish Government, by J. Molde, acting as Agent, assisted by K. Hagel-Sørensen, advokat,

— the Netherlands Government, by H.G. Sevenster and D.J.M. de Grave, acting as Agents,

— the Commission of the European Communities, by N.B. Rasmussen and D. Triantafyllou, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 16 March 2006, gives the following

Judgment

1 The reference for a preliminary ruling concerns the interpretation of Article 11(A)(2)(a) and (3)(c) 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 and — corrigendum — OJ 1977 L 149, p. 26) (hereinafter 'the Sixth Directive').

2 This reference was made in the course of proceedings between De Danske Bilimportører (hereinafter 'DBI'), a trade association of importers of motor vehicles in Denmark, and the Skatteministeriet (Danish Ministry of Fiscal Affairs) regarding the position of a registration duty on new motor vehicles (hereinafter 'the registration duty') in the light of the taxable amount for the purposes of value added tax (hereinafter 'VAT').

Legal context

Community legislation

3 Article 11 of the Sixth Directive, which is in Title VIII entitled 'Taxable Amount', provides that:

'A. Within the territory of the country

1The taxable amount shall be:

(a) in respect of supplies of goods and services other than those referred to in (b), (c) and (d) below, everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser, the customer or a third party for such supplies including subsidies directly linked to the price of such supplies;

2The taxable amount shall include:

(a) taxes, duties, levies and charges, excluding the value added tax itself;

(b) incidental expenses such as commission, packing, transport and insurance costs charged by the supplier to the purchaser or customer. Expenses covered by a separate agreement may be considered to be incidental expenses by the Member States.

3The taxable amount shall not include:

(c) the amounts received by a taxable person from his purchaser or customer as repayment for expenses paid out in the name and for the account of the latter and which are entered in his books in a suspense account. The taxable person must furnish proof of the actual amount of this expenditure and may not deduct any tax which may have been charged on these transactions.'

National legislation

4The registration duty was introduced by the Law on compulsory registration of motor vehicles (lov om registreringspligt af motorkøretøjer) in the version laid down in Codified Law No 977 of 2 December 2002 (hereinafter 'the Law on registration duty').

5Under Article 1 of that law, registration duty is chargeable on 'motor vehicles that are to be registered under the Law on road traffic'. It falls due on presentation of the motor vehicle for registration. Permission to use vehicles on public roads in Denmark is conditional on payment of the duty.

6Under Article 8(1) of the Law on registration duty, the taxable value of a new motor vehicle is 'its ordinary price including value added tax but excluding the duty under the present law'. As regards used motor vehicles, inter alia those imported as personal property in connection with moving house and motor vehicles rebuilt, for example after a road accident, VAT is also included as part of the basis of assessment for the registration duty.

7Under Paragraph 14 of the Law on registration duty a person who in the course of trade sells vehicles that are subject to that duty may register with the customs and tax authorities. Unlike the legal approach which prevails as regards certain other goods which are subject to excise duty, such registration is an option and not a duty as regards car dealers. A registered dealer receives a credit for settlement which relieves him of the obligation to pay the duty in cash on presentation of the vehicle for registration.

The facts which gave rise to the dispute in the main proceedings and the questions referred for a preliminary ruling

8In the course of January 1999, DBI bought a new car intended for the use of its director.

9According to the national court, as is usual in Denmark when a motor vehicle is purchased from an authorised dealer, the dealer dealt with registration of the vehicle in the purchaser's name and the provision of number plates before supplying the car.

10The invoice for the purchase of the vehicle refers to a total price of DKK 498 596. That price can be broken down as follows: (1) the amount charged by the dealer to the purchaser, excluding VAT and registration duty; (2) VAT at the standard rate of 25% on the price of the vehicle and (3) registration duty on the sum of (1) and (2) subject to certain adjustments and deductions.

11As it considered that the method of calculation set out in the previous paragraph is contrary to the provisions of Article 11(A) of the Sixth Directive and that VAT must be based on the total price of the vehicle including the registration duty, DBI brought an action before the Østre Landsret (Eastern Regional Court).

12It is clear from the order for reference that, depending on whether VAT is calculated employing the method used by the Danish tax authorities or in accordance with the method advocated by DBI, there is a difference of DKK 14 899 in the amount of the total price of the vehicle. That difference can be explained by the progressive nature of the registration duty.

13As it considered that the judgment of the Court in Case C-383/01 De Danske Bilimportører [2003] ECR I-6065 did not contain any answer which was relevant to the outcome of the proceedings pending before it, the Østre Landsret decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

'1. Is Article 11(A)(2)(a) in conjunction with Article 11(A)(3)(c) of the Sixth ... Directive to be interpreted as meaning that a registration duty for motor vehicles (cars) must be included in the taxable amount for VAT, where a purchase agreement is entered into for the supply of a new motor vehicle for use for carrying passengers, where the motor vehicle is supplied, in accordance with the purchase agreement and the purchaser's intended use, by the dealer to the consumer already registered and for an overall price which includes both the price paid to the dealer and also the [registration] duty?

2. May a Member State arrange its tax system in such a way that the registration duty is regarded as an expense which the dealer pays on behalf of the final purchaser, so that it is the final purchaser who is directly liable to pay the duty?

3. Is it of significance with respect to Questions 1 and 2 that a car may be purchased and supplied without payment of registration duty, which will be possible if the purchaser does not intend to use the car for ordinary carriage of passengers or goods within the area in which the Law on road traffic applies?

4. Is it of significance that used motor vehicles are to a not insubstantial extent imported or brought inter alia as goods in connection with a transfer of residence by the final consumer, who pays the registration duty himself without the intervention of a dealer?

5. Is it of significance that the liability to registration duty arises or falls due — possibly as an expense — before the liability to VAT arises or it falls due?'

The questions referred for a preliminary ruling

14By its questions, which should be examined together, the national court is essentially asking whether a registration duty such as that at issue in the main proceedings must be included in the taxable amount as a duty within the meaning of Article 11(A)(2)(a) of the Sixth Directive when a dealer supplies a vehicle already registered for a price including that duty in accordance with the purchase agreement for that vehicle and the purchaser's intended use of it or, on the contrary, be excluded from that amount in accordance with Article 11(A)(3)(c).

15According to Article 11(A)(1)(a) of the Sixth Directive, the taxable amount within the interior of the country is, in respect of supplies of goods, everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser. Article 11(A)(2) and (3) enumerate certain items which are to be included in the taxable amount and other items which are not to be included (Case C-126/88 Boots Company [1990] ECR I-1235, paragraph 15).

16In accordance with Article 11 (A) (2) (a) of the Sixth Directive, taxes, duties, levies and charges, excluding the value added tax itself must be included in the taxable amount.

17As the Advocate General observed at points 16 and 17 of her Opinion, in order for such items to fall within the scope of the basis of assessment, even though they do not represent any added value and do not constitute the financial consideration for the supply of the goods, they must be directly linked to that supply (see to that effect Case 230/87 Naturally Yours Cosmetics [1988] ECR 6365, paragraphs 11 and 12; Case C-33/93 Empire Stores [1994] ECR I-2329, paragraph 12; and Case C-380/99 Bertelsmann [2001] ECR I-5163, paragraphs 17 and 18).

18In the present case, as the Danish and Netherlands Governments and the Commission of the European Communities have stated, the occurrence that triggers liability to the registration duty is not the supply of the vehicle but its first registration in Danish territory (see De Danske Bilimportører, paragraph 34, and Case C-138/04 Commission v Denmark, not published in the ECR, paragraph 12).

19That analysis is borne out by the fact, which constitutes the subject-matter of the third question referred by the national court, that a new car bought for a purpose other than being put into circulation within the areas in which the Danish Law on road traffic applies (for example, a collector's vehicle, a vehicle intended for use exclusively on private ground or a vehicle destined for transfer outside the national territory) does not give rise to the levying of the registration duty in spite of a supply taking place within that territory.

20Such an analysis is also borne out by the fact, mentioned in the fourth question referred by the national court, that the registration duty is due in certain situations in which there is no supply within Danish territory, such as that of a vehicle transferred by its owner to Denmark in connection with moving house and intended for use on public roads in that Member State or that of a vehicle rebuilt after a road accident and again employed for such use.

21Contrary to the submission made by DBI, the link between the levying of the duty and registration of the vehicle cannot, in those circumstances, be regarded as meeting only the national authorities' aim of ensuring effective control over the levying of a duty which is, in reality, linked to the supply. On the contrary, it reflects the real nature of that duty and the occurrence that triggers liability to it, it being a duty directly related to registration, liability to which depends on presentation of the motor vehicle for registration with a view to its use on public roads in Denmark.

22It is true that, as DBI states, when an authorised dealer contractually undertakes to supply a vehicle after having had it registered, as is usually the case, according to the national court, at the time of purchase of a vehicle from such a dealer, the point at which VAT becomes chargeable is subsequent to that at which the registration duty falls due and registration duty is included in the amount invoiced to the purchaser at the time that vehicle is supplied.

23However, and in answer to the fifth question referred by the national court, that circumstance cannot conceal the existence of a conceptual difference between the respective occurrences triggering liability to the registration duty and to VAT, rendering the former independent of the latter.

24The same is true of the argument, also relied on by DBI, that national legislation on price labelling requires dealers to state the total price of the vehicle including registration duty in their advertising.

25Accordingly, when, as in the case in the main proceedings, the registration duty has been paid by the dealer on account of a contractual obligation to supply to the purchaser a vehicle which is registered in the purchaser's name, the invoicing of that duty to the purchaser must be held to correspond to a repayment for expenses paid out by the dealer in the name and for the account of that purchaser and not to consideration for the goods supplied. Such a duty can therefore be regarded only as an element in the dealer's books which constitutes a suspense account within the meaning of Article 11(A)(3)(c) of the Sixth Directive.

26As the Advocate General observed at point 42 of her Opinion, it is important to note in that regard that, under a contract of sale such as that at issue in the main proceedings, the registered dealer who pays the registration duty before supplying the vehicle does not do so in his own interest but in that of the purchaser who wishes to take possession of a new vehicle registered in his name and appropriate for driving legally on public roads in Denmark.

27Admittedly, as DBI states, the registered dealer is, in such a case, the person responsible for payment of the registration duty to the competent tax authorities. The fact remains that, as regards that duty, the person liable for payment is the purchaser of the vehicle, as is shown by the fact that the dealer subsequently passes on to that purchaser the amount of the duty he has paid.

28In answer to the second question, it is also important to point out that, subject to certain exceptions which are not relevant in the present case, the taxation of motor vehicles has not been harmonised and differs considerably from one Member State to another. Member States are therefore free to exercise their powers of taxation in that area provided they do so in compliance with Community law (Case C-451/99 Cura Anlagen [2002] ECR I-3193, paragraph 40, and Case C-464/02 Commission v Denmark [2005] ECR I-7929, paragraph 74).

29Consequently, in view of the provisions in Article 11(A)(3)(c) of the Sixth Directive, it must be accepted that a Member State may impose a duty on new motor vehicles for which the occurrence triggering liability to the duty is the first registration of the vehicle in the territory of that State and the person responsible for payment is the purchaser of the vehicle and which, when it is paid by a dealer on account of a contractual obligation to supply the vehicle registered in the purchaser's name, corresponds to an amount advanced by the dealer in the name and for the account of that purchaser.

30Accordingly, the answer to the questions referred to the Court must be that, in the context of a contract of sale providing that, in accordance with the buyers intended use of the vehicle, the dealer will supply it registered and for a price which includes the registration duty he paid before supplying the vehicle, that duty, for which the occurrence triggering liability is not the supply of the vehicle but its first registration in national territory, is not covered by the concept of taxes, duties, levies and charges within the meaning of Article 11(A)(2)(a) of the Sixth Directive. Such a duty corresponds to an amount received by the taxable person from the purchaser of the vehicle as repayment for expenses paid out in the name and for the account of the latter within the meaning of Article 11(A)(3)(c).

Costs

Costs

31Since 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. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (First Chamber) hereby rules:

In the context of a contract of sale providing that, in accordance with the buyer's intended use of the vehicle, the dealer will supply it registered and for a price which includes the registration duty on new motor vehicles he paid before supplying the vehicle, that duty, for which the occurrence triggering liability is not the supply of the vehicle but its first registration in national territory, is not covered by the concept of taxes, duties, levies and charges within the meaning of Article 11(A)(2)(a) 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. Such a duty corresponds to an amount received by the taxable person from the purchaser of the vehicle as repayment for expenses paid out in the name and for the account of the latter within the meaning of Article 11(A)(3)(c).

[Signatures]

OPINION OF ADVOCATE GENERAL

KOKOTT delivered on 16 March 2006 1

I — Introduction

1In these proceedings the Østre Landsret (Eastern Regional Court, Denmark) seeks the Court's interpretation of Article 11(A) of the Sixth VAT Directive 2 (hereinafter: 'Sixth Directive') concerning the relationship between VAT and motor vehicle registration duty.

2This is already the second reference for a preliminary ruling to originate from the same proceedings in the national court. In 3 De Danske Bilimportører I the Court already held that the registration duty neither constitutes a charge having an equivalent effect to customs duties within the meaning of Article 25 EC because it is

1 — Original language: German.

2 — 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 (O) 1977 1. I-15, p. 1).

3 — Case C-383/01 De Danske Btlimporlorer v Skatteministeriet [2003] ECR I-6065. paragraphs 32. 34, 35 and 12. The Danish provisions on vehicle registration duty were already the subject-matter of the judgments in Case C-47/88 Commission v Denmark [1990] ECR I-1509. Case C-138/04 Commission v Denmark, not published in the official reports but available in Danish and French at the Court's website [www.curia.eu.int] and Case C-464/02 Commission v Denmark [2005] ECR not charged on import but on registration nor does it fall within the scope of Article 28 EC. Nor, in the absence of Danish motor vehicle production competing with imports, does the prohibition on discriminatory internal taxation on imported products under Article 90 EC apply. 4

3The present proceedings raise the question whether on delivery of a motor vehicle the registration duty is to be included in the taxable amount for VAT. Currently, the Danish tax authorities first charge VAT on the sale price of the vehicle which is to be registered and then subsequently charge the registration duty on the whole amount. The applicant in the main proceedings takes the view, however, that the registration duty must be included in the taxable amount for VAT. Since the amount of the registration duty increases on a progressive basis the order in which the two duties are added to the price has an impact on the total amount of the tax charge.

4 — De Danske Bilimportører 1, cited in footnote 3. paragraphs 38 and 39. and Case C-47/88 Commission v Denmark, cited in footnote 3, paragraph 17.

II — Legal framework

A — Community law

4The taxable amount for domestic transactions is governed by Article 11(A) of the Sixth Directive which provides inter alia as follows:

'(1) The taxable amount shall be:

(a) in respect of supplies of goods and services other than those referred to in (b), (c) and (d) below, everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser, the customer or a third party for such supplies including subsidies directly linked to the price of such supplies;

(2) The taxable amount shall include:

(a) taxes, duties, levies and charges, excluding the value added tax itself;

(b) incidental expenses such as commission, packing, transport and insurance costs charged by the supplier to the purchaser or customer. Expenses covered by a separate agreement may be considered to be incidental expenses by the Member States.

(3) The taxable amount shall not include:

(c) the amounts received by a taxable person from his purchaser or customer as repayment for expenses paid out in the name and for the account of the latter and which are entered in his books in a suspense account. The taxable person must furnish proof of the actual amount of this expenditure and may not deduct any tax which may have been charged on these transactions.'

B — National law

5Registration duty is charged on the basis of the Lov om registreringspligt af motorkøretøjer m. v. (Law on the duty to register inter alia motor vehicles — herein 5 after: 'Law on registration duty'). Under Paragraph 1 of the Law, duty is charged on motor vehicles which are required to be registered in accordance with the Law on road traffic. Registration duty is due on presenting the motor vehicle to be registered. In the absence of registration (and accordingly without payment of the duty) motor vehicles may not be driven on public roads.

6Under Paragraph 8(1) of the Law on registration duty, the taxable value of a new motor vehicle is its usual price including VAT but excluding the duties levied under that law. The usual price is calculated on the basis of importers' price lists plus the dealer's profit. The value of used vehicles, including those imported in the course of a transfer of residence, is estimated in accordance with Paragraph 10 of the Law on registration duty. For those purposes this is taken to be the usual price of the vehicle including VAT but excluding registration duty.

5 — For a more detailed account of registration duties in Denmark and in other Member States see in general the Opinion of Advocate General Jacobs in De Danske Bilim-portorer 1, cited in footnote 3. point 10 et seq.

7Furthermore registration duty is payable in respect of motor vehicles which are repaired — for example, after a road accident — and which for tax purposes are subsequently considered no longer to correspond to the earlier vehicle in respect of which duty was paid. Equally, in that situation the duty is calculated on the basis of the market value of the vehicle including VAT.

8In accordance with Paragraph 14 of the Law on registration duty, commercial vendors of motor vehicles which are required to be registered may register with the national tax and customs authorities. Unlike the vendors of various goods which are liable to excise duty they are not required, however, to register. Private individuals may themselves apply, therefore, for their vehicles to be registered. Registered dealers benefit merely from the fact that on presenting a vehicle they do not have to pay the registration duty in cash but may also pay it by means of a bank debit.

III — Facts, procedure and questions referred

9De Danske Bilimportører, the applicant before the national court in the present proceedings (hereinafter: 'DBI'), is the trade association of Danish car importers. On 14 January 1999 it purchased a new motor vehicle which was destined to be used by the director of the trade association. As is conventional on purchase from an importer or from one of its dealers, the vendor arranged for the vehicle to be registered in the name of the purchaser and supplied the vehicle registration plates. Subsequently it delivered the vehicle in its registered state to the purchaser.

10The vendor issued DBI with an invoice for the vehicle in which the total price including the registration duty (DKK 297 456) and VAT of DKK 498 596 was set out and which corresponded to the normal consumer price. In detail the price was arrived at as follows:

1. dealer's final price for the vehicle excluding VAT and duties,

2. VAT at the normal rate of 25% on the price set out at (1),

3. registration duty on the sum of items (1) and (2) with certain deductions and adjustments.

11In DBI's view the total price should, however, have been calculated as follows:

1. dealer's final price

2. registration duty

3. VAT on items (1) and (2).

12This method of calculation as claimed by the DBI would result in a DKK 14 899 lower tax charge. The difference can be explained by the progressive nature of the registration duty.

13In this connection, by order of 11 February 2005, the Østre Landsret in accordance with Article 234 EC referred the following five questions to the Court for a preliminary ruling.

'1. Is Article 11(A)(2)(a) in conjunction with Article 11(A)(3)(c) of the Sixth VAT Directive to be interpreted as meaning that a registration duty for motor vehicles (cars) must be included in the taxable amount for VAT, where a purchase agreement is entered into for the supply of a new motor vehicle for use for carrying passengers, where the motor vehicle is supplied, in accordance with the purchase agreement and the purchaser's intended use, by the dealer to the consumer already registered and for an overall price which includes both the price paid to the dealer and also the duty?

2. May a Member State arrange its tax system in such a way that the registration duty is regarded as an expense which the dealer pays on behalf of the final purchaser, so that it is the final purchaser who is directly liable to pay the duty?

3. Is it of significance with respect to Questions 1 and 2 that a car may be purchased and supplied without payment of registration duty, which will be possible if the purchaser does not intend to use the car for ordinary carriage of passengers or goods within the area in which the Law on road traffic applies?

4. Is it of significance that used motor vehicles are to a not insubstantial extent imported or brought inter alia as goods in connection with a transfer of residence by the final consumer, who pays the registration duty himself without the intervention of a dealer?

5. Is it of significance that the liability to registration duty arises or falls due — possibly as an expense — before the liability to VAT arises or falls due?'

IV — Legal appraisal

14At the heart of this reference lies the first question concerning the interpretation of the provisions on the taxable amount set out in Article 11(A) of the Sixth Directive in respect of the inclusion or exclusion of a duty such as the Danish registration duty on motor vehicles. Questions 2 to 5 concern ancillary issues which may be of relevance when assessing the duty. It is appropriate, therefore, to examine the questions together.

A — Preliminary observations concerning the interpretation of Article 11(A) of the Sixth Directive

15The basic rule of Article 11(A)(1)(a) of the Sixth Directive is that the value of the consideration, that is to say in general the price paid, constitutes the taxable amount in respect of goods and services supplied within the national territory. Paragraphs 2 and 3 set out in more detail which amounts must be included in the taxable amount (paragraph 2) and which must be excluded (paragraph 3). Those provisions must therefore be examined first. 6 Nevertheless the basic rule in paragraph 1 remains of significance when interpreting paragraphs 2 and 3.

16In accordance with Article 11(A)(2)(a) of the Sixth Directive taxes and duties in particular must be included within the taxable amount. At first sight that rule is surprising. It leads in fact to the result that a tax or a duty is itself subject to VAT even though payment of a tax is in itself not connected with the added value.

17The provision can be understood if one interprets it in the light of Article 11(A)(1)(a) of the Sixth Directive and applies it only to duties which are so closely connected with the supply of goods that they have become incorporated in the value of that supply. The consideration, which constitutes the general basis for taxation, must accordingly relate to the supply of goods inclusive of the taxes or duties which contribute to its value. It is

6 — Case C-126/88 Boots [1990] ECR I-1235, paragraphs 15 and 16, and Case C-380/99 Bertelsmann [2001] ECR I-5163, paragraph 15.

indeed evident from case-law, in particular, that only such consideration as is directly linked to the supply constitutes the taxable 7 amount.

18The decisive test for including a duty in the value of goods supplied is whether the supplier paid the duty in his own name and on his own account. If this is the case the consideration relevant for determining the taxable amount includes the corresponding amount of duty. Thus, for example, excise duties on mineral oil, alcohol and alcoholic beverages and manufactured tobacco, for which Directive 92/12 8 introduced a common system, are included in the taxable amount for VAT. It is generally the case that those taxes are payable by the person who releases the goods for consumption.

19On the other hand, duties are not included in the taxable amount if they are entered 'in a suspense account' in accordance with Article 11(A)(3)(c) of the Sixth Directive. The broad wording of the provision thereby includes all types of 'amounts', thus also duties. If the person liable to VAT pays a duty in the name and for the account of his customer and if the corresponding amount is entered in the books of the taxable person in a suspense account, the duty does

7 — Case 230/87 Naturally Yours Cosmetics [1988] ECR 6365, paragraph 11, Case C-33/93 Empire Stores [1994] ECR I-2329, paragraph 12, and Bertelsmann, cited in footnote 6, paragraph 17.

8 — 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 (OJ 1992 L 76, p. 1). Most recently amended by Council Directive 2004/106/EC of 16 November 2004 (OJ 2004 L 359, p. 30).

not in fact constitute an element of the services supplied by that person. On repay ing the duty paid out 'in advance, the customer is not, therefore, rewarding the 9 taxable person for a service provided. In those circumstances it is instead the customer himself who actually pays the duty; the taxable person is merely an intermediary used to facilitate payment.

20The time at which the duty is payable does not however constitute a single decisive criterion. Admittedly, a duty paid after supply must generally no longer be regarded as a component of the taxable amount. Not 10 every duty which is paid before supply must be included, however, within the taxable amount. If the duty must be classified as an entry in the suspense account within the meaning of Article 11(A)(3)(c) of the Sixth Directive, it is not included within the taxable amount even if the supplier paid it before supply.

21The parties are more or less agreed as to the interpretation in the abstract of Article 11(A) of the Sixth Directive. On the other hand they disagree as to how in practice a duty possessing the characteristics of the Danish registration duty must be categorised.

9 — See the Opinion of Advocate General Gulmann in Case C-18/92 Bally [1993] ECR I-2871, point 15.

10 — In this regard the time of supply is to be regarded as the date on which the vehicle is in fact handed over and not that of the conclusion of the sale contract, because in Community law the expression 'supply' presupposes transfer of the actual power of disposal (see Case C-320/88 Shipping and Forwarding Enterprise Safe [1990] ECR I-285, paragraphs 7 and 8, and Case C-185/01 Auto Lease Holland [2003) ECR I-1317, paragraph 32).

B — Categorisation of the Danish registration duty

1. Views of the parties

22The Danish and Netherlands Governments and the Commission take the view that the taxable amount for VAT does not include the registration duty because it is not 11 connected to supply but to registration. The Governments consider the duty to be an entry in the suspense account. The dealer registers the vehicle on behalf of the customer and it is in the latter's name that registration takes effect.

23In DBI's view, the registration duty is, on the contrary, a tax on goods which must be included in the taxable amount. In levying the registration duty it is not use of the vehicle on the road which is being taxed, but the vehicle itself. It is in practice not possible to use a motor vehicle without registration.

24DBI considers the registration duty to be a component of the price. Registration and purchase do not constitute separate acts: that which is purchased is a vehicle which has already been registered. The registration

11 — In that regard the parties refer to Case C-387/01 Weigel [2004] ECR I-4981, paragraph 47, and Case C-365/02 Lindfors [2004] ECR I-7183, paragraph 26.

duty is due before the act — the delivery of the vehicle — which gives rise to VAT liability. The judgments in Weigel and Lindfors do not allow any conclusions to be drawn regarding the present situation, because those cases were concerned with the interpretation of Directive 83/183.

25DBI argues that the dealer who presents vehicles for registration does not pay the duty in the name of another, but is himself the taxable person.

2. Assessment

26The taxation of motor vehicles has — apart from certain exceptions — not been harmonised. Member States are at liberty, therefore, to exercise their tax competence in this area provided that in doing so they 12 comply with Community law.

27Nor does the Sixth Directive impose on Member States any conditions concerning

12 — Case C-451/99 Cum Anlagen [2002] ECR I-3193, paragraph 40, and Case C-464/02 Commission v Denmark, cited in footnote 3, paragraph 74.

the structuring of other duties which are levied on the supply or registration of motor vehicles, provided that they neither possess the characteristics of turnover taxes nor are connected with border-crossing formalities 13 (Article 33(1) of the Sixth Directive). Depending on their form, the effects of such national duties for VAT purposes can vary, however, as a result of the Sixth Directive.

28It is not possible, therefore, to make a statement of general validity concerning the VAT treatment of domestic duties on motor vehicles. Instead each domestic duty must be examined on an individual basis taking its characteristics into account.

29As the Danish Government correctly points out, however, it is not the task of the Court to interpret domestic tax legislation in that context. Nevertheless, the Court can interpret the Sixth Directive and in doing so take into account the features of national law which the national court has brought to its attention.

13 — Joined Cases 93/88 and 94/88 Wisselink [1989] ECR 2671, paragraph 13.

30First of all, it is of central importance in this case that the duty in question is charged when the motor vehicles are registered. The Court has confirmed the categorisation as registration duty on several occasions and has drawn various legal consequences therefrom.

31In De Danske Bilimportører I it inferred from this that the duty at issue does not constitute an import duty, but an internal 14 tax. In Commission v Denmark 15 (C-138/04) it applied the conclusions reached in Weigel and Lindfors to the Danish registration duty. Accordingly the duty does not fall within the scope of Article 1 of Council Directive 83/183/EEC of 28 March 1983 on tax exemptions applicable to permanent imports from a Member State 16 of the personal property of individuals. In that regard the Court also made reference to Article 1(2) of Directive 83/183, which expressly excludes from the directive's scope duties connected with the use of property 17 within the country.

32The argument of DBI, that the registration duty is in fact linked to the supply of a motor vehicle and not to its use, is therefore untenable. The fact that the Court's findings were made in a different legal context does not affect the actual categorisation of the duty. Moreover, if it were correct that the registration duty is in fact a product-related

14 — Cited in footnote 3. paragraph 34.

15 — Cited in footnote 3. paragraphs 13 and 14.

16 — OJ 1983 L 105. p. 64.

17 — Case C-138/04 Commission v Denmark, cited in footnote 3. paragraph 15.

duty, in De Danske Bilimportører I the Court would have had to examine it in the light of Article 25 EC and not Article 90 EC. As a product-related duty it would hinder imports.

33Admittedly, it may in practice be rare that supply and registration of a new vehicle are separate events because dealers save purchasers the trouble of presenting the vehicle to the registration authorities. Supply and registration constitute in legal terms, 18 however, two separate transactions.

34Firstly, it is possible to purchase a motor vehicle in its unregistered state from a Danish dealer. There is, in fact, no legal obligation on dealers only to sell vehicles which have been registered and taxed. That is why car dealers are not required to be registered with the tax authorities.

18 — The Court's findings in Case 391/85 Commission v Belgium [1988] ECR 579. paragraphs 25 and 26, cannot be used to support the argument that VAT and registration tax. even when they are in formal terms based on separate chargeable events, are to be regarded as a unity. Those findings relate to the particular facts of that case which can be distinguished from the present case because in that case both taxes were connected with one another by a compensatory mechanism. The purpose of the Belgian supplementary registration tax was in fact to compensate for a loss of VAT revenue arising out of an adjustment to the taxable amount as required by Community law.

35A dealer will supply a vehicle in its unregistered state, for example, in those probably rare cases that the customer himself wishes to arrange for the registration or where registration is in fact unnecessary because it is not intended to drive the vehicle on public roads. Thus registration is unnecessary, for example, if the vehicle is only to be driven at the premises of an undertaking or to be exhibited in a museum. Nor is registration in Denmark necessary if the customer wishes to export the vehicle from Denmark in order to use it at his place of residence in another Member State.

36Secondly, in certain cases motor vehicles are registered which have not been directly supplied by a dealer in Denmark, that is say, if a vehicle from another Member State is imported by its keeper, for example, in connection with a transfer of residence or if a vehicle which has been repaired is once again to be driven on public roads. Moreover, payment of the registration duty in Denmark may become necessary if a vehicle which has already been registered in another Member State is used for a lengthy period in Denmark 19 by a person resident there.

19 — See, in relation to those circumstances, Case C-464/02 Commission v Denmark, cited in footnote 3.

37DBI argues that the duty is only linked to registration in order to permit the duty to be collected efficiently. The motives of the national legislature in the actual structuring of a chargeable event are not relevant, however, as regards the treatment of the duty for VAT purposes.

38Even if registration is not inseparably connected with supply, it cannot be excluded, however, that it constitutes an element of the total service provided by the vendor. Some of the factual circumstances advanced by DBI appear at first to support this view. Thus the advertised prices for motor vehicles as a rule include the registration duty. Moreover, generally the contract relates to the supply of a registered vehicle.

39Those circumstances do not shed any light, however, on the matter which is decisive for categorising the operation, that is, whether the vendor has paid the registration duty in his own name or in the name and for the account of the customer.

40In law, that question must be answered by reference to Article 11(A)(3)(c) of the Sixth Directive, that is to say, the Community law notion of acting in the name and for the account of another and not by reference to civil law provisions concerning agency and mandate which vary from one legal system to another.

41Moreover, the operation must be categorised by reference to objective criteria and not solely to contractual provisions agreed between the dealer and the purchaser. Otherwise the parties could determine which elements are included in the taxable amount.

42According to the information provided by the Danish Government, the Law on registration duty structures registration in such a manner that, whilst the dealer applies for the car to be registered, the ensuing registration is in the customer's name. That interpretation is supported by the fact that the dealer presents a vehicle for registration only when a contract of sale in respect of that specific vehicle has been concluded with a purchaser. Moreover, registration is a condition for using the vehicle on a public road which in practice is of interest only to the customer. Finally, the registration duty is invoiced in its entirety and as a separate item to the customer. If registration ensues in the customer's name, it must be assumed that the duty is also paid in his name and that it is entered in the dealers books in a suspense account.

43A registration duty of such a form is wholly compatible with the Sixth Directive, which in Article 11(A)(3)(c) contains an express rule for items entered in a suspense account that also applies to duties.

44However, it is also lawful to charge other types of duties on motor vehicles which must be included in the taxable amount for VAT 20 purposes. Thus, in Wisselink the Netherlands duty at issue, which was charged as an excise duty on the supply and import of vehicles, was held by the Court to be lawful. Accordingly, it was included in the taxable 21 amount for VAT. Those observations do not permit, however, any conclusions to be drawn regarding the categorisation for VAT purposes of the Danish duty, which is linked to registration.

45DBI disputes, however, that under the Danish legislation the dealer pays the registration duty in his customer's name. It is for the national court to make a definitive interpretation of national law and to resolve that question.

46The Danish and Netherlands Governments and the Commission also take the view that the inclusion of registration duty in

20 — Wisselink, cited in footnote 13.

21 — Wisselink, cited in footnote 13. paragraph 22.

the taxable amount for VAT as claimed by DBI infringes the principle of the neutrality of VAT. The supply of a vehicle which the dealer has already had registered would be treated differently from the supply of a vehicle which the customer himself applies to have registered after delivery.

47In essence, the principle of the neutrality of VAT requires comparable transactions to 22 be taxed equally. If one were to adopt the view of DBI the transactions would not be comparable because in the one case a vehicle is supplied unregistered and in the other case a vehicle is supplied already registered, and in such circumstances registration is considered to be an integral element of the supply. However, as I have already concluded registration is not in fact an element of the supply provided by the dealer. Therefore, the service he provides is in any event solely the supply of a motor vehicle. It would not be compatible with the principle of the neutrality of VAT, therefore, to tax such comparable transactions differently depending on whether the vehicle is presented for registration by the dealer before supply or by the customer after supply.

48Finally, the Danish Government points to the likelihood of discrimination in respect of imported used vehicles arising if the registration duty was charged prior to VAT.

49Given the lack of harmonisation of motor vehicle registration duties Member States are at liberty to choose the reference amount on which the duty is based. However, as held by the Court in particular in Commission v Denmark (C-47/88), Article 90 EC precludes, when determining the basis of assessment, the use of a less favourable value in respect of imported used vehicles than that which is applied to vehicles 23 acquired on the domestic market. Therefore it would be unlawful to base the registration duty for imported used vehicles on their value at the reference date inclusive of the VAT already contained therein, if the registration duty levied on vehicles acquired on the domestic market is calculated according to their price exclusive of VAT.

50It is possible, nevertheless, to avoid such discrimination also by levying registration duty for imported used vehicles on their value at the reference date less the amount of VAT contained therein. Moreover, the national legislature is not precluded from levying registration duty on the net price (exclusive of VAT). Whether or not registration duty is included within the taxable 22 — Case C-216/97 Gregg [1999] ECR I-4947, paragraph 20, Case C-141/00 Kügler [2002] ECR I-6833, paragraph 30, and Joined Cases C-453/02 and C-462/02 Linneweber and Akritidis [2005] I-1131, paragraph 24.

23 — Case C-47/88 Commission v Denmark, cited in footnote 3, paragraphs 21 and 22.

amount for VAT, it is possible to use the net imported goods does not permit any con price as the taxable amount for the purposes clusions to be drawn concerning the inter of registration duty. Therefore, the prohib pretation of provisions governing the basis of ition on discriminatory internal taxation on assessment for VAT.

V — Conclusion

51In conclusion, I propose that the questions referred by the Østre Landsret should be answered as follows:

A registration duty for motor vehicles (cars) which the dealer has paid in his customer's name prior to delivery, which has been entered in his books in a suspense account and which together with the price of the vehicle is subsequently invoiced to the customer, does not constitute a duty which is to be included in the basis of assessment for VAT in accordance with Article 11(A)(2)(a) of the 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, but constitutes an amount which must be excluded from the taxable amount in accordance with Article 11(A)(3)(c) of the Directive.