The Bottom Line
- EU law preventing discriminatory taxation (Article 110 TFEU) does not apply to vehicles imported directly from outside the EU, such as the United States. This can expose importers to different, and potentially higher, domestic tax standards.
- While courts will heavily scrutinize excessive damage claims, other value-reducing factors can succeed. In this case, a 10% valuation discount was granted for the car’s “ex-rental” history, proven by a Carfax report.
- Challenging the official CO2 emissions rating used for tax calculations is extremely difficult. Arguing that a US-spec vehicle is “similar” to a lower-emission European model is not enough; US vehicles are often considered fundamentally different due to technical specifications.
The Details
A recent ruling from the Court of Appeal in The Hague provides crucial insights for businesses importing used vehicles into the Netherlands, particularly from non-EU countries. The case involved a Dutch company that imported a used Volkswagen Tiguan from the United States. The company initially paid just over €1,000 in vehicle registration tax (BPM), arguing the car’s value was minimal due to extensive damage. The Dutch Tax Authority disagreed, issuing a supplementary assessment for an additional €18,560. The Court ultimately slashed this bill to €6,050, but its reasoning offers a clear roadmap of the risks and opportunities involved.
First, the Court dismissed the importer’s reliance on EU law. The company argued that the tax was discriminatory under Article 110 of the Treaty on the Functioning of the European Union (TFEU), which prohibits member states from imposing higher taxes on products from other member states. However, the Court ruled this principle was irrelevant. Because the car was imported directly from the US, it was not considered a “product of another member state.” The vehicle’s German manufacturing origin was not enough to change its status as a US import. This serves as a critical reminder for CEOs and legal counsel: goods sourced directly from outside the single market do not benefit from the same non-discrimination protections as intra-EU trade.
The core of the dispute was the vehicle’s valuation. The Court rejected the importer’s initial tax declaration, which was based on an extremely low valuation due to massive claimed repair costs. However, it also disagreed with the Dutch Tax Authority’s initial assessment. In a nuanced decision, the Court accepted two key arguments from the importer that significantly lowered the taxable value. It agreed to use a higher historical new price for the vehicle, which in turn increased the calculated depreciation percentage. More importantly, it granted a 10% reduction in the car’s market value because the importer provided a Carfax report proving the vehicle was a former rental car (“ex-rental”). This demonstrates that while unsubstantiated damage claims will likely fail, documented, market-recognized factors that reduce a vehicle’s value can be successfully argued in court.
Source
Source: Gerechtshof Den Haag
