8.

The second question referred to the Court by Københavns Byret is related more to the particular mechanism of the charge described above. It concerns the difference in treatment existing between Danish goldsmiths who manufacture for third dealers according to whether the customer to whom the goods are consigned is situated in Denmark or in another State of the Community. It has been seen in fact that when the manufacturer consigns the article to the customer without previously applying his mark to it the precious metal used is not included in the calculation of the chargeable value if the customer is established in Denmark whereas the same metal is included for the purposes of the application of the charge involved when the production is carried out for a foreign undertaking which is not a taxpayer in Denmark regardless of the kind of legal relationship between the Danish manufacturer and the foreign customer. It is appropriate to point out immediately that there is no difference in the treatment of the goods since in both cases the charge will nevertheless have to be paid and the amount thereof will be determined by means of identical criteria, in other words, on the basis of the value of the precious metal used in the manufacture. There is a difference however in the stage at which the charge is applied and therefore as regards the person who must pay it. If the article is intended for a dealer established in the State who applies his own mark to that article the person liable to pay the charge will be that dealer. However, when the article is exported directly by the manufacturer there is no alternative for the purpose of applying the charge but to collect it from that manufacturer regardless of whether or not he consigns the article with his mark applied thereto. The important factor, for the purposes of determining the existence of tax discrimination in a State, is the situation of exported articles compared with articles intended to be marketed within the country as regards the fiscal charge imposed on them in that State. It was observed by the undertakings concerned that the commercial value of an article which is marketed without a mark being applied thereto is less than that of a product which has been marked and that therefore the same charge ultimately effects the former to a substantially greater extent than an article to which a mark has been applied. It is necessary to consider that the charge in question was devised not on the basis of the application of a mark but on the basis of the control to which all articles belonging to the category in question are subject regardless of their origin or their destination. That control, which is intended to verify that the title of the precious metal corresponds to the legal requirements, is generally carried out at die manufacturer's establishment on the basis of criteria identical for all articles which are subject to that control regardless of their destination (which would however be very difficult to ascertain at the actual date of the control). It is therefore possible to understand the observation made by the Danish Government that the system of taxation could not in practice function effectively if articles to which a mark had not been applied and intended for export had to be exempted from the control. On the other hand if a manufacturer prefers to refrain from applying his own mark to articles intended for export this is because the foreign client prefers articles which have not been marked at source. In these circumstances it seems difficult to give credence to the argument that the value of an article to which a mark has been applied is lower. This might possibly be the case if the article were intended directly for sale to the public. The hypothesis of sale to a foreign wholesaler who prefers to apply to the article his own mark which is probably better known on his own market than that of the Danish supplier which has been put forward by the court making the reference is however quite different. For that reason exemption from the charge for articles to which a mark has not been applied and which are intended for dealers in other States would amount to the preferential treatment of exported products compared with those marketed in the State, in other words to discrimination from the tax point of view between two identical operations using precious metal carried out in the same State.