Case C‑591/17

Republic of Austria

v

Federal Republic of Germany

 Judgment of the Court (Grand Chamber), 18 June 2019

(Failure of a Member State to fulfil obligations — Articles 18, 34, 56 and 92 TFEU — Legislation of a Member State prescribing an infrastructure use charge for passenger vehicles — Situation in which owners of vehicles registered in that Member State qualify for relief from motor vehicle tax in an amount corresponding to that charge)

1.        EU law — Principles — Equal treatment — Discrimination on grounds of nationality — Prohibition — National legislation prescribing an infrastructure use charge for motor vehicles — Relief solely for owners of vehicles registered in the Member State concerned — Unlawful

(Art. 18 TFEU)

(see paragraphs 46, 49-51, 54 -57, 60, 69, 78)

2.        EU law — Principles — Equal treatment — Discrimination on grounds of nationality — Prohibition — Infrastructure use charge for motor vehicles — Structuring and application of the charge — Differential treatment of traffic offenders depending on where the vehicle is registered — Imposition of a security on owners of vehicles registered in another Member State — Lawfulness — Conditions

(Art. 18 TFEU)

(see paragraphs 94, 103, 109)

3.        Free movement of goods — Quantitative restrictions — Measures having equivalent effect — National legislation prescribing an infrastructure use charge for motor vehicles — Measure restricting access to the domestic market of goods coming from another Member State — Unlawful — Justification — No justification

(Art. 34 TFEU)

(see paragraphs 120, 127, 132-134)

4.        Freedom to provide services — Restrictions — Tax legislation — National legislation prescribing an infrastructure use charge for motor vehicles — Increase in the cost of services supplied by service providers established in another Member State — Measure restricting access to the domestic market of service providers and service recipients coming from another Member State — Unlawful — Justification — No justification

(Art. 56 TFEU)

(see paragraphs 135, 144, 149)

5.        Freedom to provide services — Provisions of the Treaty — Scope — National legislation prescribing an infrastructure use charge for motor vehicles — Taxes on road use by heavy goods vehicles — Differential treatment of carriers registered in another Member State — National carriers eligible for compensation for that charge — Unfavourable situation for foreign carriers — Unlawful

(Art. 92 TFEU)

(see paragraphs 141, 143, 161, 162)

Résumé

The German vignette for the use of federal roads by passenger vehicles is contrary to EU law

In the judgment Austria v Germany (C‑591/17), delivered on 18 June 2019, the Grand Chamber of the Court found, in an action for failure to fulfil obligations brought by the Republic of Austria under Article 259 TFEU, infringement by the Federal Republic of Germany of Articles 18, 34, 56 and 92 TFEU resulting from the introduction of an infrastructure use charge for passenger vehicles and the relief, for an amount at least equivalent to that charge, from motor vehicle tax for the owners of vehicles registered in Germany. In support of its action, the Republic of Austria relied on four grounds of complaint. The first and second grounds of complaint concern an infringement of Article 18 TFEU resulting, on the one hand, from the combined effect of the infrastructure use charge and the relief from motor vehicle tax for vehicles registered in Germany, and, on the other, from the structuring and application of the infrastructure use charge. The third ground of complaint concerns an infringement of Articles 34 and 56 TFEU by the measures criticised within the first and second grounds of complaint, taken as a whole. The fourth ground of complaint concerns an infringement of Article 92 TFEU arising from the combined effect of the infrastructure use charge and the relief from motor vehicle tax for vehicles registered in Germany.

As regards the first complaint, alleging infringement of Article 18 TFEU resulting from the combined effect of the national measures at issue, the Court, after having found a link — from both a temporal and a substantive point of view — between the national measures at issue justifying the joint assessment of them with regard to EU law, first found that there was a difference in treatment on grounds of nationality. In that regard, the Court observed, in particular, that with respect to the collection of the charge at issue, all the users of German motorways are subject to the infrastructure use charge, irrespective of where their vehicles are registered. However, the owners of vehicles registered in Germany qualify for relief from motor vehicle tax in an amount that is at least equivalent to the amount of the charge that they have had to pay, so that the economic burden of that charge rests, de facto, only on the owners and drivers of vehicles registered in a Member State other than Germany. It is accordingly apparent that, because of the combination of the national measures at issue, the treatment of the latter, who make use of German motorways, is less favourable than that of the owners of vehicles registered in Germany, with regard to the use of those motorways, notwithstanding that they are in comparable situations with respect to that use. According to the Court, that difference has the same outcome as a difference in treatment based on nationality.

The Court recalled that, when they establish taxes on motor vehicles, the Member States must have due regard for, inter alia, the principle of equal treatment, so that the arrangements made for the imposition of those taxes do not constitute a means of discrimination.

It is, admittedly, open to the Member States, by virtue of their freedom of choice to define the means of financing their public infrastructure, to alter the system for the financing of their road infrastructure, provided that any such alteration complies with EU law, including the principle of non-discrimination enshrined in the first paragraph of Article 18 TFEU. However, the Court found that the mechanism for providing compensation by means of the relief at issue is discriminatory with respect to owners and drivers of vehicles registered in Member States other than Germany, since the Federal Republic of Germany has been unable to establish that that mechanism corresponds to the objective, declared by that Member State, of moving from a system of financing of infrastructure by means of taxation to a system of financing by all users, the consequence of the reduction in motor vehicle tax introduced by that Member State being, in practice, the granting of relief from the infrastructure use charge to the owners of vehicles registered in Germany.

With respect to the second complaint, alleging infringement of Article 18 TFEU resulting from the structuring and application of the infrastructure use charge, the Court observed that the fact that the constituent elements of certain offences, such as the incomplete payment of the charge or failure to provide correct information, can be imputed only to the owners and drivers of vehicles registered in Member States other than Germany, does not support the Republic of Austria’s claim that those provisions principally affect those owners and drivers. The Court also found that, in particular, the objective of ensuring the payment of the fines imposed on offenders using a vehicle registered in a Member State other than Germany, pursued by the possibility of requiring them to provide a security, justifies the consequent difference in treatment that arises between those offenders and offenders using a vehicle registered in Germany, and that that measure is proportionate with respect to that objective.

As regards the third complaint, alleging infringement of Articles 34 and 56 TFEU, the Court found that the national measures at issue are liable to restrict the access to the German market of goods from other Member States. The infrastructure use charge to which, in reality, only the vehicles that carry those goods are subject is liable to increase the costs of transport and, as a consequence, the price of those goods, thereby affecting their competitiveness.

The Court also observed that the national measures at issue are liable to restrict the access to the German market of service providers and service recipients from a Member State other than Germany. The infrastructure use charge is liable, because of the relief from motor vehicle tax that is part of the national measures at issue, either to increase the cost of services supplied in Germany by those service providers, or to increase the cost for those service recipients inherent in travelling into Germany in order to be supplied with a service there.

Last, with respect to the fourth complaint, alleging infringement of Article 92 TFEU, the Court further stated that by offsetting in its entirety the new tax burden constituted by the infrastructure use charge, payable by all carriers, by means of a relief from motor vehicle tax in an amount at least equivalent to that of the charge paid, a relief to the benefit of the German carriers from which the foreign carriers are excluded, the effect of the national measures at issue is to alter, unfavourably, the situation of the foreign carriers in relation to that of the German carriers. The national measures at issue were therefore found to be contrary to Article 92 TFEU.