The judges of the Court of Justice of the European Union (CJEU) ruled on Tuesday 18 June in Case C-591/17 that the German vignette for the use of federal roads by private motor vehicles was contrary to EU law, in that the targeted fee is discriminatory.
In 2015, Germany introduced a charge for the use of federal roads by private motor vehicles (‘infrastructure charge’), partly based on the user-pays and polluter-pays principles. The amount of this fee is based on the cylinder capacity, the type of engine and the emission standard of the vehicle. The revenue from this charge must be used to finance infrastructure.
The owner of a vehicle registered in Germany must pay a fee in the form of an annual vignette when the owners or drivers of foreign-registered vehicles only have to pay for 10 days, 20 months or 1 year when using the roads.
At the same time, Berlin has provided that owners of vehicles registered in Germany will benefit from relief from the motor vehicle tax to an amount that is at least equivalent to the amount of the charge that they will have had to pay.
Austria has always considered that this system gives rise to indirect discrimination on grounds of nationality (see EUROPE 11760A13). While the Commission brought an infringement action against Germany in September 2016 (see EUROPE 11635/21), it terminated the infringement proceedings in May 2017 (see EUROPE 11790/25). Vienna then brought an infringement action against Germany in October 2017 (see EUROPE 11882/14). It should be noted that infringement proceedings by one State against another are very rare.
In his Opinion from 6 February, the Advocate General at the EU Court of Justice, Nils Wahl, considered that this action should be dismissed, as the German measure does not constitute, in his view, discrimination on grounds of nationality (see EUROPE 12188/24).
The judges of the Court did not follow him and found that Germany had failed to comply. They consider that the infrastructure charge, combined with the exemption from tax on motor vehicles registered in Germany, constitutes indirect discrimination on grounds of nationality and a violation of the principles of the free movement of goods and the freedom to provide services.
Discrimination. As regards discrimination, the judges find that the exemption from motor vehicle tax for vehicles registered in Germany has the effect of fully offsetting the infrastructure charge paid and, therefore, of imposing the economic burden of that charge only on the owners and drivers of vehicles registered in other Member States.
While they respect Berlin's choice to move to a polluter-pays and user-pays system, they make it clear that EU law and, in particular, the principle of non-discrimination must be respected.
However, the German authorities have not demonstrated here that compensation granted only to owners of vehicles registered in Germany is valid.
In addition, in this case, infrastructure financing through taxation would continue to apply to owners of vehicles registered in Germany. This funding would therefore not be based on the polluter-pays and user-pays principles for these people.
In addition, Berlin did not submit any environmental or other evidence justifying discrimination.
Free movement. The judges then note that the German scheme is likely to hinder access to the German market for products from other Member States. This is because the infrastructure charge for foreign vehicles only could increase transportation costs.
Similarly, this fee could have the effect of increasing the costs of services and, therefore, hindering the free provision of services.
Reaction. The German Minister of Transport, Andreas Scheuer, reacted quickly to this judgment by noting that the CJEU had considered the German scheme to be “incompatible with EU law”. “The verdict surprises us”, he nevertheless stated, referring to the fact that the Commission and the Advocate General before the Court had previously given the green light to this regime. See the Court's judgment: http://bit.ly/2ZwI0Al (Original version in French by Lucas Tripoteau)