Order;Information — ECLI:EU:C:2024:134
Date: 2024-02-06
Language of the case: Portuguese
Court formation: Eighth Chamber
Subject matter: Taxation
Procedure: Reference for a preliminary ruling
Origin: Portugal

Anonymised version 
Translation C-399/23 – 1 
Case C-399/23 [Osóquim] i 
Request for a preliminary ruling 
Date lodged: 
29 June 2023 
Referring court: 
Tribunal Arbitral Tributário (Centro de Arbitragem 
Administrativa – CAAD) (Portugal) 
Date of the decision to refer: 
23 June 2023 
Applicant: 
MB 
Defendant: 
Autoridade Tributária e Aduaneira 
  
[…] 
CAAD CENTRO DE ARBITRAGEM ADMINISTRATIVA 
(CAAD, Centre for Administrative Arbitration) 
CAAD: Tax arbitration 
[…] 
Case: Referral to the Court of Justice of the European Union for a 
preliminary ruling 
ARBITRAL AWARD 
 
i The name of the present case is a fictitious name. It does not correspond to the real name of any party to the proceedings. 
EN 
REQUEST FOR A PRELIMINARY RULING OF 23. 6. 2023 – CASE C-399/23 
 
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— I — 
MB, […] (‘the applicant’), […], brought arbitration proceedings against the 
Autoridade Tributária e Aduaneira (Portuguese tax and customs authority, 
‘AT’ or ‘the defendant’) seeking an award declaring unlawful and partly annulling 
the assessments for imposto sobre veículos (vehicle tax, ‘ISV’) contained in 
Vehicle Customs Declarations (‘DAVs’) No 2022/00740713 and 
No 2022/00823007. 
He claimed, in essence, that he brought two motor vehicles, from Belgium and 
that had been registered for the first time in Belgium, into Portugal; he submitted 
the customs declarations for those motor vehicles and the AT assessed tax on 
each, which totalled EUR 13 687.77 in respect of ISV; that amount has been paid; 
those assessments are nevertheless in part unlawful because the amount of ISV 
assessed that corresponds to the environmental component was calculated in 
accordance with a provision of internal law that is incompatible with Article 110 
of the Treaty on the Functioning of the European Union (TFEU). 
He sought a declaration that the ISV assessments contained in DAVs 
No 2022/00740713 and No 2022/00823007 are unlawful and their partial 
annulment in respect of EUR 1 990.58. He also sought an ancillary order for 
repayment of the tax unlawfully paid on the basis of those assessments together 
with compensatory interest. 
[…] [procedural matters] 
* 
The Tribunal Arbitral Singular (single-arbitrator tribunal) having been constituted 
in accordance with the applicable legislation and regulations, the defendant AT 
was notified for the purposes of Article 17 of the Regime jurídico da arbitragem 
em matéria tributária (Legal rules governing tax arbitration, ‘the RJAT’). 
Duly notified, the defendant submitted an answer containing a substantive defence 
claiming that, put succinctly, Article 11 of the Código do Imposto sobre Veículos 
(Code on Vehicle Tax, ‘CISV’), in the version applicable to this case, is 
compatible with Article 110 TFEU. 
It claimed that the request should be dismissed and that it should be found to have 
no liability. […] 
— II — 
[…] 
*** 
[…] 
OSÓQUIM 
 
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[…] [procedural matters – the parties’ legal standing and joinder of the actions] 
*** 
[…] 
[…] [procedural matters – quantifying the claims in the arbitration] 
*** 
[…] 
[…] [considerations relating to the jurisdiction of the CAAD ratione materiae and 
on the basis of the amount of the claims] 
*** 
Of its own motion, the arbitral tribunal raised the possibility of referring to the 
Court of Justice of the European Union for a preliminary ruling on whether 
Article 11 of the CISV is compatible with Article 110 TFEU. 
Both parties were notified and made submissions. 
It is necessary to issue a decision. 
* 
Applicable national law 
The legal rules governing ISV are contained in the CISV, approved by Law 
No 22-A/2007 of 27 June 2007. On the date of the taxable events to which these 
arbitration proceedings relate, the version in force was that resulting from the 
amendments made by Law No 75-B/2020 of 31 December 2020. 
Article 2 of the CISV, on the subject matter the tax, reads as follows: 
‘1. The following vehicles shall be subject to the tax: 
(a) passenger cars, which shall mean motor vehicles with a gross weight 
of up to 3 500 kg and capacity of not more than nine seats, including 
the driver’s seat, intended to carry passengers; 
…’ 
Article 3 of the CISV, on the subjective scope of the tax, provides: 
‘1. The tax shall be payable by registered operators, authorised operators and 
private individuals, as defined in this Code, engaged in the release for 
consumption of vehicles liable to the tax, such persons being considered to 
be those persons in whose name the vehicle customs declaration is made. 
REQUEST FOR A PRELIMINARY RULING OF 23. 6. 2023 – CASE C-399/23 
 
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…’ 
In respect of the taxable event, Article 5 of the CISV establishes: 
‘1. The chargeable event for the tax shall be the manufacture or assembly in, 
or admission or import into, national territory of vehicles liable to tax that 
must be registered in Portugal. 
2. […] 
3. For the purposes of this Code: 
(a) “admission” means the entry into national territory of a vehicle which 
comes from another Member State of the European Union or is 
released for free circulation in that State; 
…’ 
The tax rates established in Article 7 of the CISV are to be applied to the release 
for consumption of second-hand vehicles admitted into national territory; 
Article 7(1)(a) and (b) provides that the rates established in Table A are to be 
applied to passenger cars, among other vehicle categories, having regard to the 
cubic capacity component and the environmental component. In addition to 
Article 7, Article 11 of the CISV establishes the tax rates applicable to second-
hand vehicles. In so far as is relevant here, Article 11, in the version resulting 
from Article 391 of Law No 75-B/2020 of 31 December 2020 (Lei do Orçamento 
para 2021 (Budget Law for 2021)) provides as follows: 
‘Article 11 
Rates – second-hand vehicles 
1. The tax on vehicles with a permanent EU registration certificate issued by 
other Member States of the European Union shall be calculated 
provisionally in accordance with the rules of this Code; the percentage 
reductions listed in Table D shall be applied to the amount of tax calculated 
in accordance with the applicable table, having regard to the cubic capacity 
component and the environmental component and including the increment 
established in Article 7(3), with the percentages being linked to average 
depreciation in the value of vehicles in the national market and average 
remaining vehicle lifetime respectively: 
OSÓQUIM 
 
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Table D 
Cubic capacity component 
Length of use   Percentage reduction 
Up to 1 year   10 
Over 1 year and up to 2 years  20 
Over 2 years and up to 3 years 28 
Over 3 years and up to 4 years 35 
Over 4 years and up to 5 years 43 
Over 5 years and up to 6 years 52 
Over 6 years and up to 7 years 60 
Over 7 years and up to 8 years 65 
Over 8 years and up to 9 years 70 
Over 9 years and up to 10 years 75 
Over 10 years   80 
Environmental component 
Length of use   Percentage reduction 
Up to 2 years   10 
Over 2 years and up to 4 years 20 
Over 4 years and up to 6 years 28 
Over 6 years and up to 7 years 35 
Over 7 years and up to 9 years 43 
Over 9 years and up to 10 years 52 
Over 10 years and up to 12 years 60 
Over 12 years and up to 13 years 65 
Over 13 years and up to 14 years 70 
Over 14 years and up to 15 years 75 
REQUEST FOR A PRELIMINARY RULING OF 23. 6. 2023 – CASE C-399/23 
 
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Over 15 years 80 
2. For the purposes of applying the preceding paragraph, “length of use” 
shall mean the period between issuance of the first registration certificate 
and delivery of the corresponding registration documents by the competent 
entity but no later than the deadline for submitting the vehicle customs 
declaration. 
…’ 
EU case-law 
Article 11 of the CISV was the subject matter of infringement proceedings 
brought before the Court of Justice by the European Commission, which gave rise 
to the judgment of 16 June 2016, Commission v Portugal, C-200/15, 
EU:C:2016:453. 
In that judgment, the Court of Justice held that ‘the Portuguese Republic failed to 
fulfil its obligations under Article 110 of the Treaty on the Functioning of the 
European Union, by applying, in order to determine the taxable value of second-
hand vehicles imported into Portugal from another Member State, a system for 
calculating the depreciation on the vehicles which does not take account of the 
depreciation on the vehicles during their first year of use or of depreciation of 
more than 52% in the case of vehicles which have been used for more than five 
years’. 
In reaching that conclusion it held in that judgment (Commission v Portugal, 
paragraphs 23 to 26) that: 
‘As emerges from the Court’s repeated case-law the aim of Article 110 
TFEU is to ensure free movement of goods between the Member States in 
normal conditions of competition by the elimination of all forms of 
protection which may result from the application of internal taxation that 
discriminate against products from other Member States (see, in particular, 
judgments of 18 January 2007, Brzezihski, C-313/05, EU:C:2007:33, 
paragraph 27, and of 7 April 2011, Tatu, C-402/09, EU:C:2011:219, 
paragraph 34). 
That article is infringed where the taxation on the imported product and that 
on the similar domestic product are calculated in a different manner on the 
basis of different criteria which lead, even if only in certain cases, to higher 
taxation being imposed on the imported product (judgments of 22 February 
2001, Gomes Valente, C-393/98, EU:C:2001:109, paragraph 21; of 
19 September 2002, Tulliasiamies and Siilin, C-101/00, EU:C:2002:505, 
paragraph 53; and of 20 September 2007, Commission v Greece, C-74/06, 
EU:C:2007:534, paragraph 25). 
OSÓQUIM 
 
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It is incompatible with Article 110 TFEU for a Member State to levy on 
second-hand cars from other Member States a tax which, calculated without 
taking the vehicle’s actual depreciation into account, exceeds the residual 
tax incorporated in the value of similar second-hand motor vehicles already 
registered in the national territory (see, in particular, judgments of 9 March 
1995, Nunes Tadeu, C-345/93, EU:C:1995:66, paragraph 20, and of 
22 February 2001, Gomes Valente, C-393/98, EU:C:2001:109, 
paragraph 23). 
In applying Article 110 TFEU, and in particular when comparing the taxes 
applicable to imported second-hand cars with those applicable to second-
hand cars purchased at home, which are similar or competing products, it is 
necessary to have regard not only to the rate of direct or indirect internal 
taxation on domestic or imported products but also to the basis of 
assessment and the detailed rules for levying the tax in question. More 
specifically, a Member State may not charge tax on imported second-hand 
motor vehicles based on a value which is higher than the real value of the 
vehicle with the result that they are taxed more heavily than similar second-
hand cars on the domestic market. The taxable value imputed to the 
imported second-hand vehicle by the revenue authorities should faithfully 
reflect the value of a similar second-hand vehicle already registered in 
national territory (see judgment of 20 September 2007, Commission v 
Greece, C-74/06, EU:C:2007:534, paragraphs 27 and 28 and the case-law 
cited).’ 
As a result of that judgment, the Portuguese State amended the wording of 
Article 11 of the CISV, by means of Law No 71/2018 of 31 December 2018, to 
extend the percentage reductions laid down in that article. 
Nevertheless, not even that statutory amendment was considered compatible with 
EU law and the European Commission therefore brought fresh infringement 
proceedings (Case C-169/20), which gave rise to the judgment of 2 September 
2021, Commission v Portugal, EU:C:2021:679, in which the Court of Justice held 
that ‘by excluding the depreciation of the environmental component in the 
calculation of the applicable value of second-hand vehicles put into circulation in 
the Portuguese territory and purchased in another Member State when calculating 
the vehicle tax as provided for by the Código do Imposto sobre Veículos (Code on 
vehicle tax), as amended by Lei 71/2018 (Law No 71/2018), the Portuguese 
Republic has failed to fulfil its obligations under Article 110 TFEU.’ 
Even before that judgment was handed down, the national legislature again 
amended Article 11(1) of the CISV, by Law No 75-B/2020 of 31 December 2020, 
which inserted a depreciation table for the environmental component, based on the 
number of years a vehicle has been used and indicating the corresponding 
percentages. 
REQUEST FOR A PRELIMINARY RULING OF 23. 6. 2023 – CASE C-399/23 
 
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Arguments of the parties 
The applicant submits that even with the new wording of Article 11 of the CISV 
resulting from Article 391 of Law No 75-B/2020, the Portuguese State is still 
failing to fulfil its obligations under Article 110 TFEU. He bases his case on the 
following arguments: 
– The percentage reductions applied to the environmental component are 
lower than those applied to the cubic capacity component, with the effect 
that these two components of the tax receive unequal treatment. 
– The legal rules at issue allow the tax authorities to levy a tax on 
vehicles admitted into national territory from other Member States on the 
basis of a value higher than the actual value of the vehicle, taxing them more 
heavily than similar second-hand vehicles available on the domestic market, 
meaning that the value used by the tax authorities as a basis for taxing the 
admission of second-hand vehicles is not a true reflection of the value of a 
similar vehicle already registered in national territory. 
– In consequence, the amount of tax, calculated without taking into 
account the actual depreciation of the vehicle, exceeds the residual amount 
of tax incorporated in the value of similar second-hand vehicles already 
registered in national territory. 
– This amounts, in short, to an infringement of Article 110 TFEU. 
The defendant bases its position on the following arguments: 
– Once a depreciation table for the tax resulting from the environmental 
component was included in the statutory provisions, the national legislation 
ceased to be unlawful and non-compliant in the light of the primacy of EU 
law. 
– In its 2021 judgment in Commission v Portugal, the Court of Justice 
did not find that the percentage tax reduction applicable to the cubic capacity 
and environmental components had to be the same, but rather that the 
environmental component had to be depreciated; the amendment of 
Article 11(1) of the CISV, in the new wording resulting from Article 391 of 
Law No 75-B/2020, has fully met that requirement. 
– Tax rates are set in accordance with the tax and environmental policy 
objectives, among others, pursued by governments, and to its knowledge 
there is no EU case-law which prevents the Member States from setting 
different reductions for the two components of ISV (the cubic capacity 
component and the environmental component). 
– The new version of Article 11(1) of the CISV resulting from 
Article 391 of Law No 75-B/2020 of 31 December 2020 therefore now 
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accommodates the European Commission’s concerns in respect of 
compatibility with EU law, reflecting the lessons drawn from the 2021 
judgment in Commission v Portugal (Case C-169/20), since it now provides 
in Table D, as was already the case with the cubic capacity component of 
ISV, that second-hand vehicles from EU Member States benefit from a 
discount or reduction for the environmental component of ISV. 
– The wording of Article 11 of the CISV, as applied to the assessments 
to which this tax arbitration relates, comply with Articles 110 and 191 TFEU 
and the taxation of domestic second-hand vehicles compared with that of 
vehicles admitted from other Member States is therefore not discriminatory. 
* 
[…] Interpretation of the principles and other provisions of EU law falls 
exclusively to the Court of Justice, and the Treaties establish a mechanism for 
cooperation with the national courts intended precisely to guarantee the uniform 
application of EU law throughout the territory of the European Union. An express 
ruling by the Court of Justice on any disputed question of EU law may be 
dispensed with only where (i) the question is neither necessary or relevant to the 
outcome of the main proceedings; (ii) the Court of Justice has already issued a 
final ruling on the question it is proposed to refer or there is settled case-law on 
that question; or (iii) the national court has no reasonable doubts as to how the 
question of EU law should be resolved because the meaning of the provision in 
question is clear and obvious (see judgment of 6 October 1982, Cilfit v Ministero 
della sanità, 283/81, EU:C:1982:335). 
Notwithstanding the case-law set out above, in view of the constant legislative 
developments in internal law, there remains a need for clear, unequivocal 
guidance from Europe’s highest court on whether the internal rules for 
determining the tax payable on the admission of vehicles from other Member 
States into the Portuguese market is compatible with EU law. That guidance can 
come only from EU case-law, not from the national courts. […] [general 
considerations relating to the referral for a preliminary ruling and the Cilfit case-
law] 
In the light of the foregoing, it would appear that the conformity of the current 
wording of Article 11(1) of the CISV with Article 110 TFEU remains a disputed 
question requiring an interpretation by the Court of Justice in order to ensure 
uniformity, and a ruling by that court is therefore necessary. 
A question must therefore be referred to the Court of Justice for a preliminary 
ruling clarifying whether Article 11(1) of the CISV, in the version resulting from 
Article 391 of Law No 75-B/2020 of 31 December 2020, is compatible with 
Article 110 TFEU. 
[…] 
REQUEST FOR A PRELIMINARY RULING OF 23. 6. 2023 – CASE C-399/23 
 
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*** 
The request for a preliminary ruling being made to the Court of Justice prevents 
the case from proceeding and it is therefore necessary to stay these proceedings. 
[…] 
[…] 
[…] [considerations on the relationship between Article 23 of the Statute and the 
provisions of the RJAT on the time limit for issuing the final arbitral award] 
— III — 
By virtue of the foregoing, I hereby: 
(a) Refer the following question to the Court of Justice of the European 
Union for a preliminary ruling: 
In the context of the calculation of the tax on vehicles established in the 
Código do Imposto sobre Veículos (Code on Vehicle Tax), is 
Article 11(1) of that Code (in the version resulting from Article 391 of 
Lei n.º 75-B/2020 (Law No 75-B/2020) of 31 December 2020 
incompatible with Article 110 TFEU because it does not take 
depreciation into account for the environmental component in the same 
proportion and on the same terms as it does for the cubic capacity 
component for the purposes of calculating the amount of tax applicable 
to second-hand vehicles acquired in a different Member State and 
placed in circulation in Portuguese territory? 
(b) […] [procedural matters – extension of the arbitration deadline] 
(c) […] [procedural matters – stay of proceedings] 
(d) […] [procedural matters – communication of the request for a 
preliminary ruling to the Court of Justice] 
[…] 
[…] [procedural matters] 
CAAD, 23 June 2023 
The arbitrator 
[…]