The Supreme Court’s decision in this matter followed a judgment issued by the Court of Justice of the European Union (as referred by the Dutch court).
The case involved a German national who lived and worked in Germany. Just prior to 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 place of employment in Germany. She did not register the car in the Netherlands, and therefore did not pay the BPM. Eventually, a BPM assessment was made against her.
The case was referred to the CJEU by the Dutch Supreme Court (Haag Rood), and specifically with respect to the following question:
- Whether the BPM levy—as a result of the person’s relocation to the Netherlands from another EU Member State—was contrary to the EU Treaty principles of "the free movement of workers" or "free movement and residence by EU citizens"?
The CJEU concluded that the BPM levy was not contrary to the EU Treaty.
With this answer from the CJEU, the Dutch Supreme Court held that the BPM was correctly rightly payable by the woman, who was now resident in the Netherlands.
Tax professionals note that despite the holding in this case, the BPM law offers various possibilities for an exemption from BPM in cross-border situations--for example, (1) for individuals who already purchase a car six months prior to their relocation to the Netherlands, or (2) for individuals who are residents of the Netherlands and provided a car by a foreign employer.
Read a March 2013 report prepared by the KPMG member firm in the Netherlands: Supreme Court: tax still levied on private motor vehicles relocated from another Member State