Cross-border vehicle usage – Information for companies and individuals

Cross-border mobility and its legal regulations on vehicle use

More and more companies and private individuals are part of an international network, and operate or work in several countries. Cross-border mobility offers many advantages, but also presents a number of risks. As in any cross-border situation, the company or private individual is automatically subject to the legal regulations of more than one country, which do not always coincide.

If vehicles are used in cross-border situations, for example, there can be an impact in terms of risks related to customs, VAT, direct tax or vehicle registrations. Such risks can arise in a business or in a purely private context (e.g. journey to work). In Europe, rules have been tightened in recent years based on the case law of the European Court of Justice and the modified provisions of the Customs Code. In addition to these provisions, VAT rules and their effects must be taken into account. These are not always applicable in the same way in all EU countries. For example, if a company domiciled in Switzerland makes a company vehicle available to an employee living in Germany or Austria, the Swiss company may be liable for VAT in Germany or Austria.

It is not easy for anyone to find their way through the legislative jungle, whether they are a company that makes business vehicles available to their employees, or a cross-border commuter with their own vehicle. What is thought to be a solution to a problem can also lead to new risks in other areas (e.g. employment law, etc.). This makes it advisable to carry out a case by case study. Each situation should be analysed separately due to the wide variety of possible circumstances.

Failure to meet the relevant provisions can result in legal consequences and subsequent costs, up to and including the impounding of the vehicle in question. To avoid difficulties of this kind, the regulations of the other country must be taken into account whenever a border is crossed.

HERE, with the help of some practical case studies, we show you how to recognise risks, and explain which rules you should follow in certain circumstances.

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