Opinion of the Advocate General — ECLI:EU:C:2006:598
Date: 2006-09-21
Language of the case: Polish
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Free movement of goods;Measures having equivalent effect;Quantitative restrictions;Customs Union;Internal taxation;Charges having an equivalent effect
Procedure: Reference for a preliminary ruling
Origin: Poland

summary. Other methods may also achieve an adequate result. In that connection, it is clear that calculation of the Polish excise duty on passenger cars does take account of depreciation inasmuch as it is based on the actual declared price of the relevant transaction. 45. However, in accordance with the detailed rules governing that calculation, (19) the amount of duty to be paid is 3.1% or 13.6% of the car’s price, depending on engine capacity, during the year of manufacture and the following year, increasing in each case by 12% in each subsequent calendar year up to a maximum of 65%, which will be reached in the seventh year for cars with an engine capacity over 2000 cc and in the eighth year for other cars. The percentage is always of the sale price at the relevant time. 46. Consequently, cars sold new (that is to say, to their first purchaser) during the year of manufacture or the following year are treated in the same way, whether they are manufactured in Poland or another Member State. 47. In addition, the rate of duty (3.1% or 13.6% of the sale price) on a second-hand car imported into Poland during the year of manufacture or the following year is the same as the proportion of residual duty (3.1% or 13.6% of the vendor’s remuneration) in the value of a comparable car on which excise duty was charged in Poland when new and which is subsequently sold second-hand in Poland. 48. Those two situations seem entirely in accordance with the first paragraph of Article 90 EC, inasmuch as taxation of new or second-hand cars from other Member States does not exceed that charged on new or second-hand cars from within Poland. 49. For cars sold second-hand after the end of the year following their manufacture, the proportion of residual duty in the value of a car on which duty was charged in Poland when new remains constant at 3.1% or 13.6% (depending on engine capacity) of the depreciated value of the vendor’s remuneration. In contrast, the rate charged on second-hand cars from other Member States increases year by year up to 65%. 50. Consequently, in so far as that rate exceeds the proportion of residual duty in the value of a second-hand car on which duty was charged in Poland when new, the internal taxation on second-hand cars from other Member States exceeds that imposed on similar domestic products. It thereby contravenes the first paragraph of Article 90 EC. (20) 51. The Polish Government has put forward three considerations which in its view justify the method of calculation used. I shall address those considerations briefly, even though there is in any event nothing in the Treaty or in the Court’s case-law which allows for justification of discriminatory taxation contrary to Article 90 EC. (21) 52. First, it stresses environmental concerns, which form part of the fundamental goals of the European Community, set out in Article 2 EC. Older cars are in general likely to be more polluting, and it is therefore justifiable to discourage their purchase by differential taxation. 53. However, as I recalled in my Opinion in Nádasdi, (22) the purpose of Article 90 EC is to prohibit any internal taxation which, all other things being equal, burdens products from other Member States more heavily than similar domestic products. A tax does not escape that prohibition simply because, in addition to its fundamental purpose of raising revenue, it seeks to favour environmentally-friendly products or habits. On the contrary, if it pursues such an aim, it must do so in a manner which does not burden domestic products less than those imported from other Member States. 54. Second, the Polish Government refers to a factor mentioned also in the order for reference: the belief or suspicion that in many if not all cases the purchase price declared to the authorities is significantly less than the actual price paid. It points out that the depreciated value taken as the basis for calculation is not determined by a formula which might be criticised for not taking true depreciation into account. It is taken, objectively, as the declared value of the transaction. However, there is justification for levying duty at a higher rate to compensate for its presumed declaration at an artificially low level. 55. That consideration does not appear to me to be valid in the present context. In order for such an approach to be consistent with the Court’s case-law on Article 90 EC, it would be necessary to assume that the purchase price of a car acquired from another Member State was systematically declared accurately during the year of manufacture and the following year, but then systematically under-declared by an increasing percentage each year, reaching a maximum degree of under-declaration after some seven years. I do not think that such an assumption can reasonably be made. It is of course quite possible that the problem of under-declaration exists, in the absence of any means of verifying the true price paid. To deal with that problem, however, it is necessary to find an objective means of assessing the true value of vehicles, or at least a good approximation of that value which may, if appropriate, be challenged. 56. Third, the Polish Government has produced figures demonstrating that the introduction of excise duty on purchases of second-hand cars from other Member States in May 2004 was accompanied by an immediate and very significant increase in such purchases. Thus, it argues, there is clearly no question of any discrimination against such purchases prohibited by Article 90 EC. 57. However, the prohibition in that article is not a matter of practical effect, nor yet a matter of degree. Article 90 EC quite clearly provides that no Member State may ‘impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products’. Unlike Article 28 EC, there is no mention of the effect which that taxation may produce on intra-Community trade. And it is settled case-law that ‘a system of taxation can be considered compatible with Article [90 EC] only if it is proved to be so structured as to exclude any possibility of imported products being taxed more heavily than domestic products, so that it cannot in any event have discriminatory effect’. (23) 58. Consequently, none of the considerations put forward by the Polish Government affects my view that the excise duty in question is incompatible with the first paragraph of Article 90 EC to the extent that the rate at which it is imposed on second-hand cars from other Member States exceeds the proportion of residual duty in the value of a comparable second-hand car on which duty was charged in Poland when new. Question 3 59. The third question referred is essentially whether the second paragraph of Article 90 EC prohibits an excise duty imposed on second-hand cars imported from other Member States at a rate varying according to age and engine capacity, but not on the sale of second-hand cars within the Member State in question (on which it has already been imposed according to a similar formula before their initial registration there and whose resale price it thus subsequently affects). 60. The second paragraph of Article 90 EC prohibits internal taxation of such a nature as to afford indirect protection to domestic products which, although not similar to imported products for the purposes of the first paragraph, are nevertheless in a competitive relationship with them. (24) 61. However, the assessment which the referring court seeks concerns a comparison between second-hand cars already on the national market and second-hand cars acquired from another Member State. Those two categories are clearly similar products within the meaning of the first paragraph of Article 90 EC, under which the duty in question thus falls to be assessed. 62. Since nothing in the order for reference or the observations to the Court suggests that the duty affords indirect protection to any different domestic products which are in a competitive relationship with passenger cars, I consider that the assessment under the first paragraph of Article 90 EC, in the context of the national court’s second question, is sufficient. (25) Question 4 63. The national court’s fourth question is essentially whether a requirement that a person acquiring a passenger car from another Member State must submit a declaration within five days of the ‘intra-Community acquisition’ is compatible with Article 28 EC and/or Article 3(3) of Directive 92/12. 64. As a preliminary point, it may be noted that this question seems to be based to some extent on a misapprehension by Mr Brzeziński as to the starting-point of the five-day period in issue. 65. It appears from the order for reference that he stated before the national court that he had been obliged to cut short his stay abroad and return to Poland in order to make the declaration within five days of purchasing the car in question in Germany, which prevented him from concluding other planned business there. 66. However, both the Polish Government and the Commission agree in their written observations that the date of an ‘intra-Community acquisition’ within the meaning of the Law on Excise Duty is the date of the car’s actual introduction into Poland. Mr Brzeziński did not contest that view at the hearing, or submit any other observations on this question. 67. To the extent that the question may be based on such a misapprehension, it is possible that the referring court no longer requires an answer to it. I think it none the less preferable to address the question, which may still have relevance for some other aspect of the national proceedings. 68. Article 28 EC prohibits quantitative restrictions on imports and all measures having equivalent effect – to the exclusion of fiscal measures – in trade between Member States. Article 3(3) of Directive 92/12 limits the right to levy taxes (on products other than mineral oils, alcohol, alcoholic beverages or manufactured tobacco) to those which do not give rise to border-crossing formalities in trade between Member States. 69. The correct basis for assessing the declaration requirement therefore depends on its classification either as a non-fiscal measure independent of the excise duty principally in issue (in which case Article 28 EC would be relevant) or as a formality to which the levying of that duty gives rise (in which case Article 3(3) of Directive 92/12 would be relevant). 70. The Commission states that the purpose of the declaration is to provide information on the number of cars imported and the amounts due by way of excise duty, a statement borne out by the form produced by the Polish Government at the hearing. The Commission concludes – in my view correctly on that basis – that the declaration requirement is a mandatory formality inseparably linked to the actual payment of the duty. That being so, Article 28 EC cannot be relevant. 71. Article 3(3) of Directive 92/12 might however be relevant if the requirement were to be regarded as a ‘border-crossing formality’ to which levying of the excise duty gives rise. 72. The referring court states that failure to submit a declaration within the five-day time-limit has no unfavourable consequences for the taxpayer. Only the requirement to pay the duty before the car’s first registration is essential. 73. The Commission and the Polish Government both point out that the declaration does not have to be made at the actual time when the car crosses the Polish border. However, if the declaration is indeed required, the precise moment does not seem to me to be relevant when determining the requirement’s status as a border-crossing formality. What is more important is that it is linked to the time of crossing the border, and not, as Mr Brzeziński appears to have believed, to the time of purchase. 74. The Commission further states in its written observations that the excise duty with which the declaration is indissolubly linked is levied not by reason of the car’s crossing the border but on the basis of the objective criterion of its first registration in Poland. 75. However, at the hearing the agent for the Polish Government made it clear that the excise duty, and thus the declaration requirement, applied in respect of all passenger cars brought into the country, even those not to be registered for use on the road – for example, those intended for display in an exhibition, for use off the road on private property, to be broken up for spare parts, etc. 76. It is further evident, from the forms produced by the Polish Government at the Court’s request, that a comparable (though not identical) declaration must be made in the case of cars produced in Poland, as a corollary to the payment of excise duty. 77. It seems, therefore, from the information before the Court, that excise duty is payable on all passenger cars whether manufactured in Poland or imported; that a declaration must be made to the relevant authorities in both cases; and that the timing of that declaration is linked to the first sale of the vehicle in Poland in the former case and to the introduction of the vehicle into Polish territory in the latter case. 78. In those circumstances, I do not consider that the declaration requirement in the latter case can be regarded as a border-crossing formality within the meaning of Article 3(3) of Directive 92/12. Where a tax is in itself lawful – and in the present case there is in my view no question as to the lawfulness of the Polish excise duty in principle, but merely as to the lawfulness of its method of calculation in respect of older vehicles – Member States cannot be precluded from requiring taxpayers to provide information on the basis of which they are to be taxed. My view is strengthened by the national court’s statement to the apparent effect that no sanctions are imposed in the event of failure to comply with the five-day time-limit. Possible limitation of the temporal effect of the ruling 79. It follows from my analysis above that a tax such as the Polish excise duty is levied in breach of the first paragraph of Article 90 EC to the extent that the rate at which it is imposed on second-hand cars from other Member States exceeds the proportion of residual duty in the value of a comparable second-hand car on which duty was charged in Poland when new. The Court has consistently held that individuals are entitled to reimbursement of national charges levied in breach of Community law. (26) 80. With that possibility in mind, the referring court has asked the Court to specify a possible temporal limitation of the temporal effect of that judgment. Both in its written observations and at the hearing, the Polish Government has argued in favour of such a limitation. 81. According to settled case-law, the interpretation which the Court gives to a rule of Community law clarifies and where necessary defines the meaning and scope of that rule as it must be, or ought to have been, understood and applied from the time of its coming into force. The rule as thus interpreted can, and must, be applied by the courts even to legal relationships arising and established before the judgment ruling on the request for interpretation. (27) 82. The Court has most recently stated its practice in limiting the temporal effect of such judgments as follows: ‘It is only exceptionally that, in application of a general principle of legal certainty which is inherent in the Community legal order, the Court may decide to restrict the right to rely upon a provision it has interpreted with a view to calling in question legal relations established in good faith … Moreover, it is settled case-law that the financial consequences which might ensue for a Member State from a preliminary ruling do not in themselves justify limiting the temporal effects of the ruling ... The Court has taken that step only in quite specific circumstances, where there was a risk of serious economic repercussions owing in particular to the large number of legal relationships entered into in good faith on the basis of rules considered to be validly in force and where it appeared that individuals and national authorities had been led to adopt practices which did not comply with Community legislation by reason of objective, significant uncertainty regarding the implications of Community provisions, to which the conduct of other Member States or the Commission of the European Communities may even have contributed …’ (28) 83. It is therefore necessary to consider first whether the method of calculating excise duty on second-hand cars imported from other Member States was adopted and applied in good faith, in a situation of objective, significant uncertainty, (29) to which other Member States or the Commission may have contributed, regarding the implications of Article 90 EC; and second whether reimbursement of duty levied in breach of that provision would give rise to serious economic consequences for Poland. 84. On the first aspect, the Polish Government submits that the Court’s case-law in the field is not so complete and unequivocal as to exclude the possibility that what may be seen by a Member State as an objective criterion for applying differential rates of taxation to different products (30) may not be judged in the same way by the Court. It also stresses that the Commission was fully notified of the details of the excise duty when it was introduced on 1 May 2004, but did not inform the Polish Government of its view that the duty was incompatible until 13 July 2005, after the date of the national court’s decision to seek a preliminary ruling in the present case. 85. I find it difficult to accept that the Court’s case-law is ambiguous in this matter. From a reading of the judgments which I have set out in points 4 to 22 of my Opinion in Nádasdi and summarised in points 11 and 12 above it is quite clear how the Court has approached the relationship between the rate of a one-off tax on imported second-hand vehicles and the proportion of residual tax in the value of domestic second-hand vehicles. There is a sufficient number of decisions from which consistent principles can be drawn, and the way in which Polish excise duty is calculated on second-hand cars imported from other Member States does not comply with those consistent principles. 86. Nor do I consider that the conduct of the Commission can be said to have contributed in any way to such uncertainty as the Polish Government may have felt. Clearly, the Commission cannot be expected to respond instantly to every notification of a new measure, the details of which may require considered examination. That is all the more true in a situation such as that of the enlargement of the Community from 15 to 25 Member States, when the 10 new Member States presumably communicated a considerable number of implementing measures over a short period. In such circumstances, the fact that the Commission did not respond for 14 months, though perhaps regrettable in an ideal world, cannot be said to have contributed to any uncertainty – in contrast to a situation in which it might for example have given some provisional assurance of compatibility. In any event, the mere fact that the Commission has not brought infringement proceedings by a particular date cannot justify a temporal limitation of the effects of a judgment. (31) 87. As regards the second aspect, the Polish Government has produced figures showing that the total excise duty on passenger cars collected for the period from 1 May 2004 to 30 April 2006 amounts to 1.16% of forecast revenue in 2006. (32) 88. However, it has not produced any breakdown of those figures from which it is possible to estimate what proportion of that total might have to be reimbursed. In particular, it must be borne in mind that the duty levied on all cars (including all imported cars) up to the end of the year following that of their manufacture is fully compliant with Community law. None of that duty will have to be reimbursed. In addition, only a portion of the duty levied on cars imported after that date can qualify for reimbursement. And in practice, it may be assumed that not all those entitled to reimbursement will in fact submit a claim. Moreover, it is open to the Polish authorities to adjust their method of calculating excise duty on passenger cars in such a way as to compensate over a period for any loss. 89. In those circumstances I do not consider that the Court has been presented with evidence of serious economic repercussions, within the meaning of its case-law, such as to justify a limitation of the temporal effect of its judgment. There is no suggestion that, to adapt the words of the EKW judgment, (33) unlimited temporal effect might ‘retroactively cast into confusion the system whereby the Polish State is financed’. Conclusion 90. In the light of all the above considerations, I am of the view that the Court should give the following answers to the questions referred for a preliminary ruling by the Wojewódzki Sąd Administracyny w Warszawie: (1) An excise duty charged both on goods imported from other Member States and on the same goods of domestic manufacture is not a customs duty or charge having equivalent effect prohibited by Article 25 EC. (2) An excise duty imposed on all passenger cars in a Member State, whether new or second-hand and whatever their origin, complies with the first paragraph of Article 90 EC to the extent that the rate of duty is the same for domestic cars and those imported from other Member States. It does not however comply with that provision if, and to the extent that, the rate of duty on second-hand cars imported from other Member States exceeds the proportion of residual duty in the value of comparable second-hand cars on which the same duty was imposed in the Member State in question before their first registration there. (3) Such a duty falls to be assessed under only the first, and not the second, paragraph of Article 90 EC if there are no other domestic products which are in a competitive relationship with passenger cars. (4) A requirement that goods subject to excise duty in a Member State be declared to the authorities within five days of their introduction into the territory of that State, in order to enable those authorities to levy the duty, is not a quantitative restriction on imports or a measure having equivalent effect within the meaning of Article 28 EC. Nor, where an equivalent requirement exists in respect of similar goods of domestic manufacture, is it a border-crossing formality within the meaning of Article 3(3) of Council Directive 92/12/EEC. 1 – Original language: English. 2 – Of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1). 3 – The prohibitions now in Articles 23, 25, 28 and 90 EC were previously in Articles 9, 12, 30 and 95 respectively of the EC Treaty, which are referred to in the older case-law. For the sake of consistency I shall none the less use the present numbering in all that follows. 4 – See Joined Cases C-78/90 to C-83/90 Compagnie Commerciale de l’Ouest and Others [1992] ECR I-1847, paragraph 20; Case C-383/01 De Danske Bilimportører [2003] ECR I-6065, paragraph 32. 5 – See, for example, Case C-387/01 Weigel [2004] ECR I-4981, paragraph 63 and the case-law cited there. 6 – See De Danske Bilimportører, cited in footnote 4, paragraph 34, and Weigel, cited in footnote 5, paragraph 65. 7 – Case C-47/88 Commission v Denmark [1990] ECR I-4509; Case C-345/93 Nunes Tadeu [1995] ECR I-479; Case C-375/95 Commission v Greece [1997] ECR I-5981; Case C-393/98 Gomes Valente [2001] ECR I-1327; Case C-101/00 Tulliasiamies and Siilin [2002] ECR I-7487; and Weigel, cited in footnote 5. 8 – Case C-290/05, Opinion of 13 July 2006. 9 – See for example Case C-113/94 Casarin [1995] ECR I-4203, paragraph 17 et seq., and the case-law cited there. 10 – Joined Cases C-367/93 to C-377/93 Roders [1995] ECR I-2229, paragraph 38. 11 – Case C-421/97 Tarantik [1999] ECR I-3633, paragraph 28. 12 – Ustawa o Podatku Akcyzowym of 23 January 2004 (Dziennik Ustaw No 29, heading 257). 13 – Rozporządzenie Ministra Finansów w Sprawie Obniżenia Stawek Podatku Akcyzowego (Order of the Minister for Finance on the lowering of the rates of excise duty) of 22 April 2004 (Dziennik Ustaw No 87, heading 825), hereinafter ‘the 2004 Order’. 14 – Roughly EUR 200 at the relevant exchange rate. Since the car was 15 years old, the highest rate of duty (65%) must have applied, so it may be calculated that the (declared) price of the car was PLN 1 315, or roughly EUR 300. 15 – See point 8 above. 16 – See for example Weigel, cited in footnote 5, at paragraph 64, and the case-law cited there. 17 – Commission v Denmark, cited in footnote 7, paragraph 18; Commission v Greece, also cited in footnote 7, paragraph 19. 18 – Gomes Valente, cited in footnote 7, paragraphs 24 and 25. 19 – See point 18 et seq. above. 20 – It may be added that the inequality will be exacerbated if the value of the imported car, and thus the price at which it is purchased, includes a proportion of residual tax of a similar nature, levied in the other Member State. 21 – In contrast for example to the situation under Article 28 EC, where justification is possible under Article 30 EC or in accordance with the Cassis de Dijon case-law (Case 120/78 Rewe-Zentral [1979] ECR 649). 22 – Cited in footnote 8, point 66. 23 – Commission v Greece, cited in footnote 7, paragraph 29, and the case-law cited there. It is, for example, quite possible that, in the absence of the contested excise duty, purchases of second-hand cars from other Member States would have increased even more spectacularly. 24 – See point 15 above. 25 – See also point 15 above. 26 – See, for example, Case C-62/00 Marks and Spencer [2002] ECR I-6325, at paragraph 30 and the case-law cited there. 27 – See, for example, Case C-402/03 Skov [2006] ECR I-0000, paragraph 50. 28 – Case C-423/04 Richards [2006] ECR I-0000, paragraphs 40 to 42. 29 – See my Opinion of 22 June 2006 in Case C-228/05 Stradasfalti, points 87 to 89, for an expression of some doubt as to the most appropriate formulation for this criterion. 30 – See for example Case C-213/96 Outokumpo [1998] ECR I-1777, paragraph 30. 31 – See further point 93 of my Opinion in Stradasfalti, cited above in footnote 29. 32 – According to the figures given and by my calculation, the total amounts in fact to some 0.69% of revenue over the whole two-year period. 33 – Case C-437/97 EKW [2000] ECR I-1157, at paragraph 59.