EU court rules German road toll for foreigners is discriminatory

LUXEMBOURG (Reuters) - A planned German highway toll for cars discriminates against foreign drivers and breaches European Union law, the EU's highest court said on Tuesday.

The European Court of Justice backed a challenge from Austria that the system was set up so that the economic burden fell solely on drivers of vehicles from EU countries other than Germany.

The ruling means Germany cannot introduce the toll, which was due to take effect in October 2020. It had passed a law in 2015 establishing the charge for passenger cars that used the country's highways.

Those with cars registered in Germany would have been charged an annual fee of up to 130 euros ($146.09), but they would have been given a corresponding reduction in motor vehicle tax.

Drivers living elsewhere would also have needed passes to drive on German highways, again up to a maximum of 130 euros a year.

Austria, backed by the Netherlands, complained that the tax relief for German residents effectively meant only foreign drivers were truly paying the infrastructure charge.

The court on Tuesday agreed, saying the planned system constituted indirect discrimination on grounds of nationality.

Germany, supported by Denmark, had argued the charge was in line with EU transport policy and the principle that users and polluters should pay the cost of the highway network.

The court disagreed. It said drivers in Germany did not have the opportunity to pay for less than the full year even if they rarely drove on highways.

German ticket operator CTS Eventim and Austrian road systems specialist Kapsch TrafficCom were awarded a 2 billion-euro contract in December to operate the toll.

German already has a road toll for trucks.