Tax on vehicles. The Court of Justice rules on the restriction to the refund on export to vehicles which were put into circulation less than ten years ago

On 2 February 2023, the Court of Justice handed down its judgment in Case C‑676/21, A, on the interpretation of the provisions of Title II of Part Three of the Treaty on the Functioning of the European Unione (TFEU) relating to the free movement of goods and of Article 110 TFEU. The request has been made in proceedings brought by A concerning the decision by which the Verohallinto (Finnish tax administration) refused the export refund of the vehicle tax applied for by A after the sale of his Finnish-registered motor vehicle in another Member State.

On 20 July 2015, A imported into Finland from another Member State a second-hand motor vehicle that was first put into circulation on 24 November 2004, on which the tax authorities levied tax in the amount of approximately EUR 4.000. Having sold that motor vehicle in another Member State, A applied to the tax authorities for an export refund of motor vehicle tax, whose amount corresponded to that which would have been charged on a similar vehicle if it were taxed as a second-hand one at the time of its export.

The tax authorities, however, rejected that application for a refund on the ground that, according to the Law on motor vehicle tax, the latter is not refunded in respect of vehicles that have been in circulation for at least ten years at the time of export. As both his complaint against that decision and his appeal were unsuccessful, A brought an appeal before the Korkein hallinto-oikeus (Supreme Administrative Court of Finland; the “referring court”) which, in light of the need to interpret the relevant European legislation, decided to stay the proceedings and to refer to the Court of Justice three questions for a preliminary ruling.

By its first question, the referring court asked whether primary Union law, specifically Article 110 TFEU, is to be interpreted as precluding a national legislation according to which motor vehicle tax included in each one’s value is not refunded to the owner of a motor vehicle exported for permanent use in another Member State where that vehicle was first put into circulation at least ten years before the time of export, and, whether it is relevant in that respect that such a vehicle was not only intended to be used on a permanent basis primarily in the territory of the Member State which levied the motor vehicle tax but was also actually used in that manner.

According to the Court, a special arrangement such as that provided for by  the Law on motor vehicle tax cannot be regarded as discriminatory inasmuch as, by applying to all vehicles which were first put into circulation more than ten years ago, it lays down an objective criterion, namely the year in which the vehicle concerned was first put into circulation, on the basis of which a distinction is made between cases where a refund of vehicle tax is granted and those where such a refund is refused. That arrangement, therefore, does not entail any difference in treatment between imported and domestic second-hand motor vehicles, as regards the possibility of being sold on the second-hand car market in Finland, where the vehicles concerned are more than 10 years old, since it does not alter the amount of the corresponding tax included in the market value of those two types of vehicle.

In view of the answer to the first question, the Court deemed it unnecessary to answer to the second and the third one.

Marco Stillo