A hotly-contested German road toll that targets foreigners is in violation of EU law, the bloc's highest court ruled on Tuesday.
The Luxembourg-based European Court of Justice ruled in favour of Austria, which opposed a "vignette" or payment sticker costing up to 130 euros a year for private vehicles on German motorways.
Under the scheme Germans would essentially be refunded the levy with a reduction in their annual motor vehicle tax.
The measures have been the subject of a furious row for years with plans to launch the toll in October 2020 for all cars.
"The charge is discriminatory since the economic burden of the charge falls, de facto, solely on the owners and drivers of vehicles registered in other member states," the ECJ said in a statement.
Berlin's plans, a pet project of Chancellor Angela Merkel's political allies in Bavaria, had also angered other neighbours including Belgium and the Netherlands.
More From This Section
Charges to use motorways, based either on the amount of time spent or distance travelled, are already in place in many European countries.
Anyone driving on Austrian motorways, including Austrians, has to buy a vignette toll sticker valid for a certain time period.