ECJ Rules For Continuation Of Punitive Car Taxes In Denmark

by Ulrika Lomas, for LawAndTax-News.com, Brussels

20 June 2003

The European Court of Justice (ECJ) this week ruled against a Danish association of car importers, arguing that the tax levied on new cars in Denmark, which ranges between 105% and 180%, is not in breach of EU laws.

The dispute between De Danske Bilimportrrer (DBI) and the Danish government began in January 1999, when the importers filed a complaint with the tax authority over the fact that an Audi vehicle costing DKK 498,546 (EUR 67,152) was subject to a registration duty of DKK 297,456 (EUR 40,066).

DBI requested a refund of the registration tax, and when this was denied, brought proceedings against the Danish Ministry of Fiscal Affairs, arguing that this level of taxation represents a violation of the free movement of goods principles enshrined in the EC Treaty. It was at this point that the case was referred on to the European Court of Justice.

However, ruling on Tuesday, the ECJ announced that:

'In spite of its very high level, the Danish duty on registration of new motor vehicles is neither caught by Article 28 EC nor contrary to Article 90 EC, in the absence of any Danish production of vehicles and thus of any discriminatory or protective effect of the charge.'

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