This reference for a preliminary ruling is made in the course of proceedings between an insurance company established in the United Kingdom (the applicant) and the Bundeszentralamt für Steuern (Federal Central Tax Office, Germany), the competent tax authority in matters of insurance tax (the defendant), concerning whether marine insurance premiums collected by the applicant are subject to the German tax on insurance premiums.

According to the EU rules in force at the time the tax on insurance premiums was collected, only the 'Member State of registration' could collect that tax in respect of the insurance of vehicles of any type, including ships. The vessels concerned in the present case were entered in a register of ownership in Germany but flew the flags of other States under special authorisation issued by the German authorities. The referring Court asks how the concept of 'Member State of registration' is to be interpreted in such a context. Specifically, by its reference for a preliminary ruling, the Finanzgericht Köln (Finance Court, Cologne, Germany) asks the Court whether the risk should be regarded as being situated in the Member State in whose territory the vessel is entered in an official register for the purposes of proof of ownership, or in the State whose flag is flown by the vessel.

The United Nations Convention on the Law of the Sea 1982 (UNCLOS), which entered into force on 16 November 1994, was approved on behalf of the European Community by Decision 98/392/EC. Article 91.1 of that Convention provides: 'Every State shall fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag. Ships have the nationality of the State whose flag they are entitled to fly. There must exist a genuine link between the State and the ship.' Article 92.1 of that Convention, entitled 'Status of ships', states: 'Ships shall sail under the flag of one State only and, save in exceptional cases expressly provided for in international treaties or in this Convention, shall be subject to its exclusive jurisdiction on the high seas.' Article 94 of the Convention, entitled 'Duties of the flag State', provides:

1. Every State shall effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag.

2. In particular every State shall:

(a) maintain a register of ships containing the names and particulars of ships flying its flag, except those which are excluded from generally accepted international regulations on account of their small size; and

(b) assume jurisdiction under its internal law over each ship flying its flag and its master, officers and crew in respect of administrative, technical and social matters concerning the ship.

3. Every State shall take such measures for ships flying its flag as are necessary to ensure safety at sea ...

The applicant takes the view that the insurance payments it collected are not subject to insurance premium tax on the ground that the risks associated with the seagoing vessels owned by the shipping companies are not situated in Germany. According to the second indent of art 2.d of EU Directive 88/357, the power to tax those insurance premiums is determined solely by the Member State of registration of the vehicle. 'State of registration' means the State whose law determines whether a vehicle, in the light of its type of construction, its condition and its technical equipment, complies with the statutory requirements. The applicant submits that in the case of ships that provision means the State whose flag a vessel is authorised to fly. In its view, there is no such registration for the vessels covered by the insurance contracts in question, since following the 'flagging out' they are no longer authorised to fly the German flag under para 7(1) of the German FlaggRG (German Law on the Right to Flag Seagoing and Inland Vessels).

The defendant takes the view that the insurance payments collected by the applicant in respect of the insurance contracts in question are subject to insurance premium tax under the VersStG (German Insurance Tax Act). It contends that the statutory requirement of entry in an official or officially recognised register is met by the entry of the vessels in the shipping register maintained by the Amtsgericht Hamburg (District Court, Hamburg). According to the defendant, the national legislature, for the sake of clarity, construed registration to mean entry in an official or officially recognised register with the assignment of an identification number. It contends that that legislation is in accordance with EU law, namely the second indent of art 2.d of Directive 88/357.

Held: I propose that the Court should answer the question referred by the Finanzgericht Köln (Finance Court, Cologne, Germany) for a preliminary ruling as follows:

The first subparagraph of art 46.2 of Council Directive 92/49/EEC of 18 June 1992 on the co-ordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life insurance Directive), in conjunction with the second indent of art 2.d of Second Council Directive 88/357/EEC of 22 June 1988 on the co-ordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC, must be interpreted as meaning that, in the context of the insurance of ships, the 'Member State of registration' is the Member State in whose territory the ship is entered in an official register for the purposes of proof of ownership.

In this case, the ambiguity seems to stem from the fact that the German language version of the relevant provisions of Directives 88/357 and 2009/138 differs from the other language versions, in that the term used in the German language version is 'authorising Member State' ('Zulassungsmitgliedstaat').

The applicant takes the concept of the 'authorising Member State' as its basis for inferring that special authorisation is required to bring ships into service, in addition to entering them in the registers maintained by the competent courts. In so doing, the applicant considers that vessels are 'authorised' by the flag State where that State lays down quality standards for vessels flying its flag, and that it therefore bears the risk related to those vessels. Entry in a register solely for the purposes of providing proof of ownership of the vessel, as in the present case, does not mean that the State maintaining that register is the 'authorising Member State'. In its view, Germany no longer has the status of State of registration when the vessel is flying a foreign flag.

That argument is not, however, supported by the other language versions of the second indent of art 2.d of Directive 88/357. All the other versions use the concept of the Member State of 'registration'. In that context, it should be borne in mind that, according to the Court's settled case-law, the wording used in one language version of a provision of EU law cannot serve as the sole basis for the interpretation of that provision or be made to override the other language versions. In the light of the foregoing, the second indent of art 2.d of Directive 88/357 should be considered as referring, as the majority of language versions of that provision do, to the Member State 'of registration', and not to the Member State 'authorising' the actual operation.

That interpretation would also appear to be supported by the wording of the provisions of international law, and in particular by UNCLOS, in which 'l’enregistrement' ('registration') and the synonym 'l’immatriculation' of a vessel appear as interchangeable expressions in the French text. In particular, the first sentence of art 91.1 of that Convention provides that 'every State shall fix the conditions for the grant of its nationality to ships, for the registration [‘immatriculation’] of ships in its territory, and for the right to fly its flag'.

Further, the European Commission contends that it is clear from the origins of art 2.d of Directive 88/357 that the 'Member State of registration', within the meaning of that provision, must be regarded, specifically in the case of ships, as being the State with which the policyholder who has an interest in the vessel as its owner, or some similar interest, has a link. Those origins might indicate that the 'Member State of registration' criterion refers implicitly to the link that exists between, on the one hand, a person or a company having the right of ownership or a similar right or interest in a vessel and, on the other hand, the State in whose territory the vessel is entered in a register certifying ownership or a similar interest, such as the shipping register. That wording might imply that it is the Member State in whose territory a vessel is entered in a register for the purposes of proof of ownership of that vessel which is referred to in the second indent of art 2.d of Directive 88/357.

That interpretation is also consistent with international law, in particular art 91.1 of UNCLOS, which requires a 'genuine link' between the State of registration and the ship.

[For the subsequent judgment, see The North of England P & I Association Ltd v Bundeszentralamt für Steuern (Judgment), Case C-786/19, Judgment of the Court (Third Chamber), 15 April 2021 (CMI1364).]