Tax still levied on private motor vehicles relocated from another Member State
Publication date 27 March 2013
The Supreme Court recently decided that "BPM" (private motor vehicle and motorcycle tax) was rightly levied on a private car brought to the Netherlands in the context of a relocation, despite the fact that the car was also being used for commuting to a German employer.
The case involved a German national who lived and worked in Germany. Just before her relocation to the Netherlands, she purchased a private car with a German registration number. Following her relocation, the individual continued to work for her German employer and partly used the car for driving between her new place of residence in the Netherlands and her employer in Germany. She did not register the car in the Netherlands ("did not apply for a Dutch registration number"), and therefore did not pay any BPM. After a check, a BPM assessment was nevertheless imposed.
Preliminary questions to the Court of Justice of the European Union (CJEU)
The case eventually came before the Supreme Court, which subsequently referred preliminary questions to the CJEU. One of these was whether the levying of BPM - as a result of the relocation to the Netherlands - in this case was contrary to the EU Treaty, in particular "the free movement of workers" or to the principle of "free movement and residence by EU citizens"?
No conflict with EU Treaty
The CJEU found that the levying of BPM in this case was not contrary to the EU Treaty. The most important reason is that the BPM is usually - when buying a car in the Netherlands - also payable as a result of the registration of the car (the car is given a Dutch registration number). In itself, an understandable judgment: the taxpayer's situation is actually no different from that where a person resident in the Netherlands buys a car in the Netherlands and partly uses it to commute to a German employer. The Supreme Court was subsequently able to easily dismiss the case and decreed that the BPM was rightly payable by the woman, who was now resident in the Netherlands.
Still possibilities for exemption from BPM
Despite the fact that BPM was payable by the German woman in this case, the relevant BPM legislation does offer various possibilities for exemption from BPM in cross-border situations. Thus, she would normally have been eligible for an exemption from BPM if she had already purchased the car six months prior to her relocation to the Netherlands. There are also possibilities for exemption if a person resident in the Netherlands is provided with a car by a foreign employer.
Proper planning and understanding of the applicable conditions is required in order to take full advantage of the various possibilities for exemption. KPMG Meijburg & Co has extensive experience in this field.
Indirect Tax Group KPMG Meijburg & Co