Judgment of the Court (Second Chamber) of 7 May 1981. - Rumhaus Hansen GmbH & Co v Hauptzollamt Flensburg. - Reference for a preliminary ruling: Finanzgericht Hamburg - Germany. - Tax arrangements applicable to spirits - Charging of reduced taxes. - Case 153/80.



European Court reports 1981 Page 01165



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

TAX PROVISIONS - INTERNAL TAXATION - GRANTING OF TAX ADVANTAGES IN FAVOUR OF DOMESTIC PRODUCTS - EXTENSION TO PRODUCTS IMPORTED FROM OTHER MEMBER STATES - CRITERIA - ADVANTAGES RESERVED TO SMALL PRODUCERS OF SPIRITS - RATE OF TAXATION REDUCED IN TERMS OF QUANTITIES PRODUCED - APPLICATION TO IMPORTED PRODUCTS ORIGINATING WITH UNDERTAKINGS HAVING THE SAME PRODUCTION CAPACITY

( EEC TREATY , ART . 95 )

Summary

ARTICLE 95 OF THE EEC TREATY MUST BE INTERPRETED AS MEANING THAT TAX ADVANTAGES GRANTED UNDER THE LEGISLATION OF A MEMBER STATE IN FAVOUR OF CERTAIN ALCOHOLIC PRODUCTS MUST BE EXTENDED TO SIMILAR PRODUCTS ORIGINATING IN OTHER MEMBER STATES WHICH FULFIL BOTH THE CRITERION OF SIMILARITY WHICH FORMS THE BASIS OF ARTICLE 95 AND THE CONDITIONS LAID DOWN UNDER ITS NATIONAL LEGISLATION FOR QUALIFYING FOR THE TAX ADVANTAGE IN QUESTION .

Parties

IN THE TAX ADVANTAGE FOR DOMESTIC PRODUCTS IS GRANTED IN TERMS OF THE QUANTITIES PRODUCED IN EACH PRODUCTION UNDERTAKING THE SAME ADVANTAGE MUST BE GRANTED IN FAVOUR OF PRODUCTS FROM PRODUCTION UNITS SITUATED IN OTHER MEMBER STATES WHICH FULFIL THE SAME QUANTITATIVE CRITERIA . IF THAT CONDITION IS FULFILLED A MEMBER STATE MAY NOT REFUSE THAT TAX ADVANTAGE ON THE BASIS OF SUPPLEMENTARY CONDITIONS DERIVED FROM ITS LEGISLATION WHICH A PRODUCTION UNIT SITUATED IN ANOTHER MEMBER STATE CANNOT FULFIL BY REASON OF ITS GEOGRAPHICAL SITUATION OR OF THE LEGISLATION ON THE PRODUCTION OF SPIRITS IN FORCE IN THAT STATE .

IN CASE 153/80

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE FINANZGERICHT ( FINANCE COURT ) HAMBURG FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

RUMHAUS HANSEN GMBH & CO ., HAVING ITS REGISTERED OFFICE IN FLENSBURG ,

AND

HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) FLENSBURG

Subject of the case

ON THE INTERPRETATION OF ARTICLE 95 OF THE EEC TREATY IN RELATION TO THE APPLICATION OF THE GERMAN GESETZ UBER DAS BRANNTWEINMONOPOL ( LAW ON THE MONOPOLY IN SPIRITS ) OF 8 APRIL 1922 ,

Grounds

1 BY ORDER OF 12 JUNE 1980 , WHICH WAS RECEIVED AT THE COURT ON 27 JUNE 1980 , THE FINANZGERICHT ( FINANCE COURT ) HAMBURG REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION ON THE INTERPRETATION OF ARTICLE 95 OF THE EEC TREATY TO ENABLE IT TO DETERMINE THE CONDITIONS UNDER WHICH THE PROVISIONS OF THE GERMAN LAW ON THE MONOPOLY IN SPIRITS ( GESETZ UBER DAS BRANNTWEINMONOPOL ) PROVIDING FOR THE APPLICATION OF REDUCED RATES OF TAX IN RESPECT OF VARIOUS CATEGORIES OF PRODUCTS MUST BE EXTENDED TO CERTAIN ALCOHOLIC PRODUCTS ORIGINATING IN OTHER MEMBER STATES .

2 THE ORDER FOR REFERENCE SHOWS THAT THE PLAINTIFF IN THE MAIN ACTION IMPORTED AND RELEASED ONTO THE MARKET IN 1973 VARIOUS CONSIGNMENTS OF LIGHT RUM FROM GUADELOUPE , ON WHICH IT PAID ON SO DOING THE MONOPOLAUSGLEICH ( MONOPOLY EQUALIZATION DUTY ) AT THE REGULAR RATE OF TAX THEN IN FORCE AMOUNTING TO DM 1 500 PER HECTOLITRE OF WINE-SPIRIT . THE PLAINTIFF INSTITUTED PROCEEDINGS AGAINST THE DECISION OF THE CUSTOMS AUTHORITIES , CLAIMING THAT THERE WAS DISCRIMINATION AGAINST THE IMPORTED SPIRITS CONTRARY TO ARTICLE 95 OF THE TREATY BECAUSE CERTAIN CATEGORIES OF DOMESTIC SPIRITS QUALIFIED FOR A MORE ADVANTAGEOUS RATE OF TAX .

3 IT IS CLEAR FROM THE FILE AND FROM THE EXPLANATIONS PROVIDED BY THE PLAINTIFF IN THE COURSE OF THE PROCEEDINGS THAT IT IS NOT IN DISPUTE THAT THE RATE OF TAX APPLIED IN THIS MATTER BY THE CUSTOMS AUTHORITIES IN FACT CORRESPONDS TO THE GENERAL RATE OF TAX APPLICABLE TO DOMESTIC SPIRITS . THE PLAINTIFF ' S OBJECTION IS BASED ON THE FACT THAT NATIONAL LEGISLATION MAKES PROVISION FOR CERTAIN EXCEPTIONS FROM THAT GENERAL RATE FOR VARIOUS CATEGORIES OF SMALL PRODUCERS WHO BENEFIT FROM A REDUCED RATE OF TAX . IT CLAIMS THE APPLICATION TO THE PRODUCTS WHICH IT IMPORTED OF THE MOST FAVOURABLE RATE OF TAX APPLIED TO DOMESTIC SPIRITS MADE FROM FRUIT AND REFERS MORE PARTICULARLY TO THE TAX ARRANGEMENTS LAID DOWN AT THE TIME BY THE LAW FOR SPIRITS FROM COOPERATIVE FRUIT-FARM DISTILLERIES ( OBSTGEMEINSCHAFTSBRENNEREIEN ). IT CONSIDERS THAT , AS A RESULT OF THE COMBINATION OF THE INDIVIDUAL DISTILLATION RIGHTS ENJOYED BY SUCH DISTILLERIES , THEY IN FACT CONSTITUTE INDUSTRIAL UNDERTAKINGS SO THAT IT IS POSSIBLE TO COMPARE THEM WITH PRODUCERS OF RUM .

4 IN ITS ORDER MAKING THE REFERENCE THE FINANZGERICHT FINDS THAT THERE IS A STATE OF UNCERTAINTY ARISING FROM THE RECENT CASE-LAW OF THE BUNDESFINANZHOF ( FEDERAL FINANCE COURT ) FOLLOWING A PRELIMINARY DECISION ( VORBESCHEID ) OF 6 NOVEMBER 1979 DELIVERED IN ANOTHER CASE CONCERNING THE SAME PLAINTIFF IN WHICH THE BUNDESFINANZHOF RULED THAT THE PROHIBITION OF TAX DISCRIMINATION UNDER ARTICLE 95 OF THE EEC TREATY APPLIED ONLY TO SUCH FOREIGN PRODUCTS AS FULFIL THE SAME CONDITIONS OF PRODUCTION AS DOMESTIC PRODUCTS OBTAINING PREFERENTIAL TREATMENT . IT SHOULD BE NOTED THAT , AS IS ESTABLISHED BY A DOCUMENT LODGED BY THE PLAINTIFF IN THE COURSE OF THE PROCEEDINGS , THAT PRELIMINARY DECISION WAS CONFIRMED ON 16 JULY 1980 BY A JUDGMENT OF THE BUNDESFINANZHOF .

5 THE FINANZGERICHT EXPRESSES DOUBTS ON THE POINT WHETHER A CRITERION DERIVED FROM THE COMPARABLE NATURE OF THE CONDITIONS OF PRODUCTION IS COMPATIBLE WITH THE SYSTEM OF ARTICLE 95 WHICH , ACCORDING TO IT , IS BASED ON THE SIMILAR NATURE OF THE PRODUCTS , AND NOT ON THE CONDITIONS IN WHICH THEY WERE PRODUCED . THESE CONDITIONS IN FACT INCLUDE A WIDE VARIETY OF NATURAL , ECONOMIC AND SOCIAL FACTORS , WHICH , IF THEY WERE TAKEN INTO CONSIDERATION , MIGHT RENDER THE RULE OF NON-DISCRIMINATION IN ARTICLE 95 LARGELY INOPERATIVE . THE FINANZGERICHT RECALLS THAT , IN THE CASE-LAW OF THE COURT OF JUSTICE , THE ONLY CRITERION FOR MAKING A DISTINCTION HITHERTO PERMITTED HAS BEEN THAT OF THE QUANTITIES PRODUCED ( CF . JUDGMENT OF 22 JUNE 1976 , BOBIE , CASE 127/75 ( 1976 ) ECR 1079 ) SO THAT THE APPLICATION OF TAX REDUCTIONS MAY NOT DEPEND ON CONDITIONS OTHER THAN THE QUANTITY PRODUCED BY EACH UNDERTAKING .

6 IN VIEW OF THAT UNCERTAINTY THE FINANZGERICHT FORMULATED THE FOLLOWING QUESTION :

' ' MUST THE FIRST AND SECOND PARAGRAPHS OF ARTICLE 95 OF THE EEC TREATY BE UNDERSTOOD TO APPLY ONLY WHERE THE SIMILAR ( FIRST PARAGRAPH ) DOMESTIC GOODS OR DOMESTIC GOODS OTHERWISE COMPETING ( SECOND PARAGRAPH ) WITH IMPORTED GOODS ARE SUBJECT TO SIMILAR CONDITIONS OF PRODUCTION TO THOSE WHICH APPLY TO THE IMPORTED GOODS OR IS THE DETERMINING FACTOR SOLELY THE SIMILARITY OF THE GOODS OR THE FACT THAT THEY ARE IN COMPETITION OR MAY THE EXTENSION OF THE TAX ADVANTAGES FOR DOMESTIC GOODS TO IMPORTED GOODS BE MADE ADDITIONALLY DEPENDENT UPON THE VOLUME OF PRODUCTION OF EACH MANUFACTURING CONCERN RECOGNIZED AS A LEGAL OR ECONOMIC UNIT?

' '

7 THE PROBLEMS THUS RAISED BY THE NATIONAL COURT HAVE BEEN LARGELY RESOLVED IN A CASE WHICH WAS PENDING BEFORE THE COURT OF JUSTICE AT THE TIME WHEN THE FINANZGERICHT MADE ITS ORDER OF REFERENCE FOR A PRELIMINARY RULING , AND TO WHICH THE FINANZGERICHT HAS FURTHERMORE REFERRED . THAT CASE GAVE RISE TO THE JUDGMENT OF 30 OCTOBER 1980 ( CASE 26/80 , SCHNEIDER-IMPORT V HAUPTZOLLAMT MAINZ ).

8 IT IS CLEAR FROM THE CONSISTENT CASE-LAW OF THE COURT , WHICH IS RECALLED IN THAT JUDGMENT , THAT IN THE PRESENT STATE OF COMMUNITY LAW MEMBER STATES ARE NOT PROHIBITED FROM GRANTING TAX ADVANTAGES , IN THE FORM OF EXEMPTIONS FROM OR REDUCTION OF TAXES , TO CERTAIN TYPES OF SPIRITS OR TO CERTAIN CLASSES OF PRODUCERS . NEVERTHELESS , ACCORDING TO THE REQUIREMENTS OF ARTICLE 95 SUCH PREFERENTIAL SYSTEMS MUST BE EXTENDED WITHOUT DISCRIMINATION TO IMPORTED PRODUCTS CONFORMING TO THE SAME CONDITIONS AS PREFERRED DOMESTIC PRODUCTS .

9 IT IS NEVERTHELESS IMPOSSIBLE TO DISREGARD THE FACT THAT THE APPLICATION OF THE CRITERIA OF ARTICLE 95 GIVES RISE TO PARTICULAR DIFFICULTIES BY REASON , ON THE ONE HAND , OF THE FACT THAT THE GRANTING OF CERTAIN TAX EXEMPTIONS MAY BE RELATED TO THE TECHNICAL PROCEDURES PRESCRIBED BY THE LEGISLATION OF THE VARIOUS MEMBER STATES CONCERNING THE MANUFACTURE AND TAXATION OF SPIRITS AND , ON THE OTHER , OF NATURAL PHENOMENA OF PRODUCTION , WHICH POSE PARTICULAR PROBLEMS IN A CASE SUCH AS THE PRESENT ONE , WHICH CONCERNS A PRODUCT WHICH COMES FROM OUTSIDE THE EUROPEAN CLIMATIC ZONE .

10 IT WAS STATED IN THIS CONNEXION IN THE JUDGMENT OF 30 OCTOBER 1980 THAT THE ESSENTIAL POINT WITH REGARD TO ARTICLE 95 IS THAT IMPORTED PRODUCTS MAY IN FACT ENJOY THE SAME ADVANTAGES AS COMPARABLE DOMESTIC PRODUCTS EVEN THOUGH THE TECHNICAL OR LEGAL CONDITIONS PRESCRIBED FOR DOMESTIC PRODUCTS QUALIFYING FOR A SPECIFIED TAX ADVANTAGE ARE NOT FULFILLED . AS THE NATIONAL COURT PROPERLY POINTED OUT , IT IS CONTRARY TO THE REQUIREMENT THAT DOMESTIC AND IMPORTED PRODUCTS SHALL ENJOY REAL EQUALITY TO PRESCRIBE , FOR IMPORTED PRODUCTS COVERED BY THE QUANTITATIVE CRITERION LAID DOWN BY NATIONAL LEGISLATION , OTHER REQUIREMENTS ON THE BASIS OF CONDITIONS OF PRODUCTION WHICH , BY REASON OF NATURAL OR LEGAL ELEMENTS , CANNOT BE FULFILLED BY A PRODUCT COMING FROM ANOTHER MEMBER STATE .

11 BOTH THE APPRAISAL OF THE QUESTIONS OF FACT WHICH MAY BE RAISED BY THE APPLICATION TO IMPORTED PRODUCTS OF CRITERIA WHICH DETERMINE THE GRANTING OF TAX ADVANTAGES IN RESPECT OF CERTAIN DOMESTIC GOODS OR CERTAIN DOMESTIC PRODUCTS OR PRODUCERS AND THE CHOICE OF THE APPROPRIATE CRITERIA FOR COMPARISON ARE MATTERS FOR THE NATIONAL COURT .

12 IT SHOULD NEVERTHELESS BE REMARKED IN THIS CONNEXION , WITH REFERENCE TO THE ARGUMENTS SET OUT BY THE PLAINTIFF , THAT , ALTHOUGH ARTICLE 95 REQUIRES THAT AN IMPORTED PRODUCT MAY IN FACT QUALIFY FOR THE SAME TAX TREATMENT AS A COMPARABLE DOMESTIC PRODUCT , COMMUNITY LAW DOES NOT OBLIGE THE MEMBER STATES TO ACCORD MORE FAVOURABLE TREATMENT TO IMPORTED PRODUCTS THAN TO THEIR OWN DOMESTIC PRODUCTS . IN PARTICULAR , THE TREATY DOES NOT REQUIRE A MEMBER STATE TO ACCORD TAX ADVANTAGES TO IMPORTED SPIRITS COMING FROM PRODUCTION UNITS WHICH DO NOT FULFIL THE SPECIFIC QUANTITATIVE CRITERIA WHICH COMPARABLE DOMESTIC PRODUCTS MUST FULFIL AS A CONDITION OF OBTAINING A TAX EXEMPTION OR A REDUCED RATE OF TAX .

13 IT IS FOR THE NATIONAL COURT TO EXAMINE , IN THE LIGHT OF THESE CONSIDERATIONS , THE ARGUMENT ADVANCED BY THE PLAINTIFF WITH REGARD TO COOPERATIVE DISTILLERIES AND , MORE PARTICULARLY , THE QUANTITATIVE LIMITS WHICH ARE A CONDITION OF THE APPLICATION OF THE PREFERENTIAL RATES RESERVED , AT THE MATERIAL TIME , TO SPIRITS PRODUCED IN THAT TYPE OF UNDERTAKING IN COMPARISON WITH THE PRODUCTION CAPACITY OF UNDERTAKINGS WITH WHICH THE RUM IMPORTED BY THE PLAINTIFF ORIGINATES .

14 THE REPLY TO THE QUESTION SUBMITTED MUST ACCORDINGLY BE THAT ARTICLE 95 OF THE EEC TREATY MUST BE INTERPRETED AS MEANING THAT TAX ADVANTAGES GRANTED UNDER THE LEGISLATION OF A MEMBER STATE IN FAVOUR OF CERTAIN ALCOHOLIC PRODUCTS MUST BE EXTENDED TO SIMILAR PRODUCTS ORIGINATING IN OTHER MEMBER STATES WHICH FULFIL BOTH THE CRITERION OF SIMILARITY WHICH FORMS THE BASIS OF ARTICLE 95 AND THE CONDITIONS LAID DOWN UNDER ITS NATIONAL LEGISLATION FOR QUALIFYING FOR THE TAX ADVANTAGE IN QUESTION .

15 IF THE TAX ADVANTAGE FOR DOMESTIC PRODUCTS IS GRANTED IN TERMS OF THE QUANTITIES PRODUCED IN EACH PRODUCTION UNDERTAKING THE SAME ADVANTAGE MUST BE GRANTED IN FAVOUR OF PRODUCTS FROM PRODUCTION UNITS SITUATED IN OTHER MEMBER STATES WHICH FULFIL THE SAME QUANTITATIVE CRITERIA . IF THAT CONDITION IS FULFILLED A MEMBER STATE MAY NOT REFUSE THAT TAX ADVANTAGE ON THE BASIS OF SUPPLEMENTARY CONDITIONS DERIVED FROM ITS LEGISLATION WHICH A PRODUCTION UNIT SITUATED IN ANOTHER MEMBER STATE CANNOT FULFIL BY REASON OF ITS GEOGRAPHICAL SITUATION OR OF THE LEGISLATION ON THE PRODUCTION OF SPIRITS IN FORCE IN THAT STATE .

Decision on costs

16 THE COSTS INCURRED BY THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS ,

THE COURT ( SECOND CHAMBER )

IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE FINANZGERICHT HAMBURG BY ORDER OF 12 JUNE 1980 , HEREBY RULES :

1 . ARTICLE 95 OF THE EEC TREATY MUST BE INTERPRETED AS MEANING THAT TAX ADVANTAGES GRANTED UNDER THE LEGISLATION OF A MEMBER STATE IN FAVOUR OF CERTAIN ALCOHOLIC PRODUCTS MUST BE EXTENDED TO SIMILAR PRODUCTS ORIGINATING IN OTHER MEMBER STATES WHICH FULFIL BOTH THE CRITERION OF SIMILARITY WHICH FORMS THE BASIS OF ARTICLE 95 AND THE CONDITIONS LAID DOWN UNDER ITS NATIONAL LEGISLATION FOR QUALIFYING FOR THE TAX ADVANTAGE IN QUESTION .

2.IF THE TAX ADVANTAGE FOR DOMESTIC PRODUCTS IS GRANTED IN TERMS OF THE QUANTITIES PRODUCED IN EACH PRODUCTION UNDERTAKING THE SAME ADVANTAGE MUST BE GRANTED IN FAVOUR OF PRODUCTS FROM PRODUCTION UNITS SITUATED IN OTHER MEMBER STATES WHICH FULFIL THE SAME QUANTITATIVE CRITERIA . IF THAT CONDITION IS FULFILLED A MEMBER STATE MAY NOT REFUSE THAT TAX ADVANTAGE ON THE BASIS OF SUPPLEMENTARY CONDITIONS DERIVED FROM ITS LEGISLATION WHICH A PRODUCTION UNIT SITUATED IN ANOTHER MEMBER STATE CANNOT FULFIL BY REASON OF ITS GEOGRAPHICAL SITUATION OR OF THE LEGISLATION ON THE PRODUCTION OF SPIRITS IN FORCE IN THAT STATE .