WRITTEN QUESTION P-0351/02

by Mihail Papayannakis (GUE/NGL) to the Commission

(6 February 2002)

Subject: Taxation of used cars in Greece

The association of Greek car importers claims that while in the year 2000 used cars imported by dealers (not company representatives) accounted for 31 % of total car imports to Greece, in 2001 they accounted for a mere 3 %. A survey carried out by the association among its registered members found that some 500 car dealers went out of business in Greece in 2001. All this is a result of the implementation of Law 2682/99 which, in conjunction with Ministerial Decision F 1039/642, has led to a doubling of the special registration tax for passenger vehicles meeting the conditions set out in Directive 94/12/EC(1).

Given that:

- rules of this kind are contrary to Article 95 of the EU Treaty, since they entail discrimination against imports of used cars from other Member States compared to cars purchased in Greece;

- the additional special flat rate of tax is payable in its entirety for used cars imported into Greece, as if they were new cars;

- imported used cars fitted with non-pollutant technology are not covered by the reduced rates of the special consumer tax:

- the European Court of Justice found against Greece in its decision of 23 October 1997 (case C-375/95);

Will the Commission say whether Greece has complied with the decision of the Court of Justice and, if not, what further action does it intend to take in this matter?

(1) OJ L 100, 19.4.1994, p. 42.

Reply given by Mr Bolkestein on behalf or the Commission

(27 March 2002)

The Commission is aware of the fact that Greece applies a registration tax to all vehicles when they are first registered for use in Greece. In principle, and in the present state of harmonisation of Community law, Member States may impose such taxes.

However, the Commission has taken Greece before the Court in an infringement case based on Article 228 of the Treaty (non-implementation of a Court decision) since the Commission considers that the method of applying the tax discriminates against second-hand vehicles brought in from other Member States, in spite of the Court decision of 23 October 1997 in case C-375/95 against Greece.

Concerning second-hand imported cars already fitted with anti-pollution technology, and their exclusion from the reduced rates of the special consumer tax, the Court found that this was a violation of Article 90 of the EC Treaty.

From the information in the Commission's possession it would seem that Greece initially extended to second-hand cars the same tax reductions as those applicable since 1989 to new cars which included anti-pollution technology as an integral component but that, as from 1 January 2001, it reintroduced tax discrimination by applying a higher rate of the new registration tax to imported second-hand cars than to second-hand cars on the domestic market already including anti-pollution technology as an integral component.

In the Commission's view Greece only partially implemented the decision handed down at the time. The infringement proceedings for non-implementation brought on the basis of Article 228 of the Treaty concern this aspect.

As to the method of calculating the depreciation on second-hand cars, following the 1997 Court judgement, Greece changed its legislation and adopted a new system for evaluating actual wear and tear on second-hand cars. However, thereafter, the Court judgement in the Gomes Valente case (C-393/98 of 21 February 2001) clarified earlier case law on the tax base applicable to second-hand cars. It is in the light of this subsequent judgement that the Greek system has to be reviewed. The Commission is currently considering whether further infringement proceedings on the basis of Article 226 need to be brought.