Keywords

Summary



Keywords

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1 . TAX PROVISIONS - INTERNAL TAXATION - TREATY PROVISIONS - PURPOSE - PROHIBITION OF TAXES CAPABLE OF INDIRECTLY PROTECTING OTHER PRODUCTS - FUNCTION - ASSESSMENT CRITERIA - DISCOURAGEMENT OF CONSUMPTION OF IMPORTED PRODUCTS

( EEC TREATY, ART . 95 )

2 . TAX PROVISIONS - INTERNAL TAXATION - TAXES CAPABLE OF INDIRECTLY PROTECTING OTHER PRODUCTS - COMPETING PRODUCTS - BEER AND WINE - CRITERIA FOR ASSESSMENT OF THE COMPETITIVE RELATIONSHIP - EXISTENCE OF AN ALTERNATIVE CHOICE FOR THE CONSUMER

( EEC TREATY, SECOND PARAGRAPH OF ART . 95 )

3 . TAX PROVISIONS - INTERNAL TAXATION - TAXES CAPABLE OF INDIRECTLY PROTECTING OTHER PRODUCTS - COMPETING PRODUCTS - BEER AND WINE - APPLICATION TO LIGHT WINES OF FRESH GRAPES FROM OTHER MEMBER STATES OF A HIGHER RATE OF VALUE-ADDED TAX THAN THAT APPLICABLE TO BEER - PERMISSIBILITY - CONDITIONS - LACK OF PROTECTIVE EFFECT

( EEC TREATY, SECOND PARAGRAPH OF ART . 95 )

Summary

1 . THE PURPOSE OF ARTICLE 95, AS A WHOLE, IS TO ENSURE THE FREE MOVEMENT OF GOODS BETWEEN THE MEMBER STATES UNDER NORMAL CONDITIONS OF COMPETITION, BY ELIMINATING ALL FORMS OF PROTECTION WHICH MIGHT RESULT FROM THE APPLICATION OF DISCRIMINATORY INTERNAL TAXES AGAINST PRODUCTS FROM OTHER MEMBER STATES, AND TO GUARANTEE ABSOLUTE NEUTRALITY OF INTERNAL TAXES AS REGARDS COMPETITION BETWEEN DOMESTIC AND IMPORTED PRODUCTS .

AGAINST THAT BACKGROUND, THE SECOND PARAGRAPH OF ARTICLE 95 IS MORE SPECIFICALLY INTENDED TO PREVENT ANY FORM OF INDIRECT FISCAL PROTECTIONISM AFFECTING IMPORTED PRODUCTS WHICH, ALTHOUGH NOT SIMILAR WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95 TO DOMESTIC PRODUCTS, ARE NEVERTHELESS IN A COMPETITIVE RELATIONSHIP WITH SOME OF THEM, EVEN IF ONLY PARTIALLY, INDIRECTLY OR POTENTIALLY .

WHILST THE CRITERION INDICATED IN THE FIRST PARAGRAPH OF ARTICLE 95 CONSISTS IN THE COMPARISON OF TAX BURDENS, WHETHER IN TERMS OF THE RATE, THE MODE OF ASSESSMENT OR OTHER DETAILED RULES FOR THEIR APPLICATION, IN VIEW OF THE DIFFICULTY OF MAKING SUFFICIENTLY PRECISE COMPARISONS BETWEEN THE PRODUCTS IN QUESTION THE SECOND PARAGRAPH OF THAT ARTICLE IS BASED UPON A MORE GENERAL CRITERION, NAMELY THE PROTECTIVE NATURE OF THE SYSTEM OF INTERNAL TAXATION .

IT FOLLOWS THAT ANY ASSESSMENT OF THE COMPATIBILITY OF A GIVEN TAX WITH THE SECOND PARAGRAPH OF ARTICLE 95 MUST TAKE ACCOUNT OF THE IMPACT OF THAT TAX ON THE COMPETITIVE RELATIONSHIP BETWEEN THE PRODUCTS CONCERNED . THE ESSENTIAL QUESTION IS THEREFORE WHETHER OR NOT THE TAX IS OF SUCH A KIND AS TO HAVE THE EFFECT, ON THE MARKET IN QUESTION, OF REDUCING POTENTIAL CONSUMPTION OF IMPORTED PRODUCTS TO THE ADVANTAGE OF COMPETING DOMESTIC PRODUCTS .

2 . IN VIEW OF THE SUBSTANTIAL DIFFERENCES IN THE QUALITY AND, THEREFORE, IN THE PRICE OF WINES, THE DECISIVE COMPETITIVE RELATIONSHIP BETWEEN BEER, A POPULAR AND WIDELY CONSUMED BEVERAGE, AND WINE MUST BE ESTABLISHED BY REFERENCE TO THOSE WINES WHICH ARE THE MOST ACCESSIBLE TO THE PUBLIC AT LARGE, THAT IS TO SAY, GENERALLY SPEAKING, THE LIGHTEST AND CHEAPEST VARIETIES, AND THAT IS ACCORDINGLY THE APPROPRIATE BASIS FOR MAKING FISCAL COMPARISONS . CONSEQUENTLY, ONLY COMMONLY CONSUMED WINES, WHICH IN GENERAL ARE CHEAP WINES, HAVE ENOUGH CHARACTERISTICS IN COMMON WITH BEER TO CONSTITUTE AN ALTERNATIVE CHOICE FOR CONSUMERS AND MAY THEREFORE BE REGARDED AS BEING IN COMPETITION WITH BEER FOR THE PURPOSES OF THE ABOVEMENTIONED PROVISION .

3 . A NATIONAL TAX SYSTEM UNDER WHICH A HIGHER RATE OF VALUE ADDED TAX IS CHARGED ON WINE OF FRESH GRAPES FROM OTHER MEMBER STATES THAN ON DOMESTICALLY PRODUCED BEER IS NOT INCOMPATIBLE WITH THE SECOND PARAGRAPH OF ARTICLE 95 OF THE TREATY PROVIDED, FIRST OF ALL, THAT THE DIFFERENCE BETWEEN THE RESPECTIVE SALE PRICES OF WINE AND BEER OF COMPARABLE QUALITY IS SO GREAT THAT THE DIFFERENCE BETWEEN THE RATES OF TAX APPLICABLE TO THE TWO PRODUCTS IS NOT CAPABLE OF INFLUENCING CONSUMER BEHAVIOUR AND, SECONDLY, THAT NO ACTUAL PROTECTIVE EFFECT IS APPARENT FROM THE COMPARATIVE STATISTICS FOR TRENDS IN WINE CONSUMPTION AND BEER CONSUMPTION IN THE MEMBER STATE CONCERNED .