Registration tax on leased or rented vehicles by Greek residents from suppliers established in another Member State

PartiesJurisdictionFormationJudge RapporteurAdvocate GeneralSubject-matter
Action for failure to fulfil obligationsEuropean Commission
Hellenic Republic
CJUE10th Ch.M.E. Levitis M. M. BobekFreedom to provide service
KeywordsPublic measures concerning the Failure of a Member State to fulfil obligations - Restriction to the freedom to provide services – Articles 56 to 62 TFUE - Leasing or renting of a vehicle by a resident of a Member State from a supplier established in another Member State – Imposition of the whole registration tax
Significant pointsBy collecting the full amount of a registration tax foreseen by its national legislation and payable by a supplier established in another Member State on vehicles which are rented or leased to a client residing in its national territory and by doing so without taking into account the duration of the rental contract or lease contract and the duration of the use of the vehicle in the national territory, the Hellenic Republic failed to fulfil its obligations under Article 56 – 62 TFEU.

The Court observes that the registration tax at issue applies to leased or rented vehicles that are not destined to be used on a permanent basis in the Member State. Moreover, the rental or leasing undertakings established in another Member State are liable to pay such a tax.

The imposition of the whole tax, which is calculated without taking into consideration the duration of the renting or leasing agreement for that vehicle or the length of time that that vehicle will be used in the national territory, could therefore disadvantage a vehicle leasing or renting undertaking established in another Member State in terms of the depreciation of such a tax, potentially dissuading it from providing its services.

In this respect, the Court states that the Greek legislation is such that it could discourage Greek residents to rent or lease a vehicle from an undertaking established in another Member State, insofar as it makes these operations more expensive; it consequently violates Article 56 TFUE by creating a restriction to freedom to provide services.
NoteworthyThe Court follows its well-established case law on the matter at issue, e.g. the judgment in Cura Anlagen (C-451/99) and orders van de Coevering (C-242/05) and Ilhan (C-42/08).
The Court also repeats that national registration tax rules are subject to the respect of the principle of proportionality and that this principle is violated, like in the case at hand, by imposing the entirety of such a tax on vehicles temporarily present in the Member State.