Brussels, 8 October 2009
VAT – The European Commission refers Austria to the European Court of Justice for the inclusion of car registration tax in the taxable base on which VAT is calculated for road vehicle supplies
The European Commission has decided to refer Austria to the European Court of Justice as regards the inclusion of the amount of its car registration tax within the taxable amount of VAT in the case of road vehicle supplies. The Commission considers that VAT should not be applied on top of the car registration tax.
In the case of supplies of road vehicles, Austria includes the amount of its car tax (the "Normverbrauchsabgabe-NoVA") within the taxable amount for VAT.
In Case C-98/05, which referred to the registration car tax levied in Denmark, the European Court of Justice has examined whether the taxable amount for VAT purposes, in the case of supplies of means of transport, must include the amount of the registration tax ("RT"), which is usually paid by the supplier to the tax authorities and afterwards repaid to him by the purchaser along with the price of the vehicle.
The Court ruled that, in the context of a sale contract providing that the dealer will supply a vehicle registered for a price which includes the registration tax he paid before supplying the vehicle, the amount of that duty must be excluded from the taxable amount for VAT on the sale of the vehicle. This is because, firstly, the RT is due in relation with the registration of the vehicle and not triggered by the supply and, secondly, because the RT is paid by the supplier of the vehicle on behalf of the purchaser.
The Commission understands that the car tax levied in Austria, despite some minor or ancillary differences, is basically identical to the Danish one examined by the Court: it is a one-off tax payable on the acquisition of the motor vehicle or as a condition for bringing it into use in the territory of the Member State concerned.
The rules on the taxable amount of VAT have been harmonized at the EU level, and the uniform application of those rules is an essential condition for the proper operation of the VAT system. In the light of this, the Commission has taken the view that the criteria of the EC Court in Case C-98/05 must be applied to the car tax levied in Austria.
The Commission's case reference number concerning Austria is 2007/2176.
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