Norske avgiftsregler

Complaint concerning car restrictions on the freedom to provide services

With reference to your letter of 2 September 1999 the Norwegian Ministry of Finance is pleased to give you the following information:

An excise duty is levied on motor vehicles imported to or manufactured in Norway. The tax system is based on each vehicle’s weight, piston displacement and motor effect. The vehicle tax is an integrated part of our system of taxes and excises, decided by the Storting (Parliament) every year as part of the budget process. The revenue from the tax is not earmarked for any particular purpose, but is treated as part of the state treasury.

According to Regulation No. 381 of 20 June 1991 laid down by the Ministry of Finance, importation of foreign-registered motor vehicles for temporary use in Norway, under some conditions can be exempted from import duties and taxes.

The framing of the Regulation is based on an agreement between the Ministers of Finance in Sweden, Denmark, Iceland, Finland and Norway in 1991. The agreement concluded that a person’s family ties should be the basis for his residence. The Ministers of Finance also concluded that if a person according to legislation in the Nordic countries is regarded as permanently resident in more than one country, the matter shall be settled in consultation between the Customs authorities of the countries concerned.

The framing of the Regulation is also based on the fact that the Norwegian tax-level in this area is high, and considerably higher than for instant in Sweden. This situation implies that it is economic incentives to use a foreign-registered car in Norway. Thus, it is necessary to have provisions which secures that persons with strong ties to Norway is levied Norwegian taxes, including vehicle taxes.

According to the Regulation article 2, a person can use a foreign-registered car in Norway if:

1. The person has permanent resident in another country (article 3)
2. The person has temporarily resident in Norway for up to 2 – two – years (article 4)
3. The person has permission to use foreign-registered car in accordance with some special conditions in the regulation, for instant demonstration, transit, moving abroad, use for short period etc. (article 5).

Article 5 letter g) states that the Head of Regional Customs Administration by application in particular cases, can permit a person permanently resident in Norway to drive a foreign-registered car in Norway for short periods of use. Such permission is given for a specific period of time, and applies to a specific person and car. Examples for when permission has been given:

• A person permanently resident in Norway with family ties in Norway. Employed by a company in another EEA State. Permitted to use the company’s foreign-registered car when providing services in Norway.
• A person permanently resident in Norway because of family ties in Norway. Occupational ties abroad. Permitted to use a car registered in the country he is working, on holiday in Norway.

Violation of the Regulation entails an obligation to pay motor vehicle tax, import duty and value-added tax, see article 10. However, the Head of the Regional Customs Administration can permit the motor vehicle to be re-exported without payment of taxes in the event of special circumstances relating to the unlawful use. In practice, a person who has used a foreign-registered usually will be permitted to re-export the car the first time he is found to be violating the Regulation.

As regard to the questions set forth in your letter, the Ministry would like to make the following remarks:

An EEA national, working for a company established in or established as a self-employed person in another EEA State than Norway, may use a car registered in the State of establishment when providing services in Norway, on the condition that he has his permanent residence abroad.

A person with family ties in Norway is considered to have permanent residence in Norway and is not permitted to use a foreign-registered car here. A person is regarded as having family ties with the country where he resides with his spouse or children under 18 years of age whom he visits regularly, normally at least once a month. A person with family ties in another EEA State may use a foreign-registered car in Norway, although he has his occupational and/or personal ties in Norway.

Article 5 letter g) permits, however, the person to apply for a permission to drive a foreign-registered car in Norway for a short period. As mention above, the Directorate of Customs and Excise also has given permission for a person with family ties in Norway, working in another EEA-State, to use a car registered in this EEA-State in Norway.

A person with permanent resident in Norway will normally not be allowed to use a foreign-registered car here. However, a person permanently resident in Norway according to article 5 may use a foreign-registered car in Norway on certain conditions, for instant for demonstration, hire cars, conveyance in business etc. For further information see the conditions in the enclosed Regulation.

The Ministry of Finance will also like to inform You that the Storting has decided to ask the Government to prepare replacement of the current motor vehicle tax on import and production with a motor vehicle tax related to the registration of the vehicles. The new tax-system is to be implemented from 1 July 2000.

The Directorate of Customs and Excise and the Ministry of Finance is now preparing the new tax system. As part of this work we also have to consider the effect on the Regulation on temporary use of foreign-registered cars. A proposal for a new tax system will according to the time schedule be sent on a hearing in the first half of 2000. We will consecutive inform the Authority on this work and especially on proposals for amendments relating to the Norwegian restrictions on the use of foreign-registered cars.

Finally, the Ministry of Finance would like to emphasis that the Regulation relating to exemption from import duties and taxes for importation of foreign-registered motor vehicles for temporary use in Norway, is an important part of the Norwegian vehicle tax system. The Regulation lay down provisions regarding when a person is to be considered permanently resident in Norway, and thus, have to pay the vehicletaxes decided by the Storting. The Member States possibility to levy different tax rates is pending on the possibility of taxing motor vehicles used by persons permanently resident in the Member State.

Enclosed You will find a copy of the Norwegian Regulation relating to exemption from import duties and taxes for importation of foreign-registered motor vehicles for temporary use in Norway (in English) and a copy of the current legislation on the Norwegian vehicle tax.

Yours sincerely,

Torbjørn Flørenes
Deputy Director General

Heidi Heggenes
Legal adviser