WRITTEN QUESTION E-3292/02

by Christos Folias (PPE-DE) to the Commission

(20 November 2002)

Subject: Imported used cars in Greece

It is known that Greece was condemned by the European Court of Justice (Case 375/95) on the grounds that, by imposing a special duty by category on imported used passenger vehicles meeting the requirements of Directive 94/12/EC(1), Greek legislation was infringing Community law. To date, Greece has not yet complied with the Court's judgment.

What steps should the Commission have taken to enforce the above ruling? Why has the Commission not yet taken the necessary measures or initiated the relevant established proceeding applicable here?

When will Article 228(2) of the Treaty be implemented?

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

Answer given by Mr Bolkestein on behalf of the Commission

(14 January 2003)

As the honourable Member indicates, in 1997 the Court of Justice ruled that Greek legislation imposing a special registration tax on certain imported cars that met the requirements of Directive 94/12/EC(1) was in violation of Community law(2).

Greece did not comply with the judgment and was sent a letter of formal notice under Article 228 of the EC Treaty on 31 August 1998. In their reply of 18 March 1999, the Greek authorities sent new law No 2682/1999 on the taxation of vehicles.

Having examined this law, the Commission found that:

- the method of calculating the taxable value of second-hand cars had been altered with the introduction of a sliding scale of flat-rate depreciation from 14 % for cars aged two years or less, up to 67 % for cars aged ten years or more;

- second-hand cars with anti-pollution technology from eligibility for reduced rates of tax were no longer excluded, so that second-hand cars now benefit from the rates applied to anti-pollution cars according to the scale being gradually applied in Greece since 1989. In the Commission's view, by limiting the scale of depreciation for a vehicle at ten years, given that depreciation does not stop at ten years, Greece was still in infringement of Article 90 of the EC Treaty.

The Commission sent a reasoned opinion on the second point on 18 September 2000. Greece answered on 17 April 2001.

After considering its reply the Commission found that:

- as regards the method of calculating the depreciation of second hand cars, the system should be revised in the light of the Gomes Valente(3) judgment. Although law No 2892/2001 revised the depreciation coefficients, the new taxation system differed substantially from the one censured by the Court of Justice. A new infringement procedure had to be initiated. A letter of formal notice under Article 226 of the EC Treaty was sent on 26 April 2002;

- as regards the exclusion of imported second-hand cars from eligibility for the reduced rates of special consumer tax applicable to vehicles with anti-pollution technology, since 1 January 2001 Greece has increased (almost doubled) the rates for second hand vehicles first put into service in 1996 and thereafter, since it considers that such vehicles now have a more polluting effect because of their age. On the same grounds it has also doubled the rate for older vehicles, which were already taxed at a double rate. On 26 April 2002 the Commission sent Greece a further letter of formal notice under Article 228 of the EC Treaty in respect of these legislative changes.

On 22 August 2002 the Greek authorities replied jointly to the letter of formal notice under Article 226 (calculation of taxable value) and the letter of formal notice under Article 228 (anti-pollution technology).

Greece recognised its obligation to apply Court of Justice decisions and informed the Commission that the Ministry of Economic Affairs is considering the restructuring of the tax system for motor cars as part of its restructuring and modernisation of the country's taxation system. This major fiscal reform process is under way and decisions will shortly be taken with a view to drafting legislation which, if approved by Parliament, will then be applied.

On 6 November 2002 the Commission sent a letter to the Greek authorities requesting information on the legislative procedure and an exact timetable.

(1) Directive 94/12/CE of the Parliament and of the Council of 23 March 1994 relating to measures to be taken against air pollution by emissions from motor vehicles and amending Directive 70/220/EEC, OJ L 100, 19.4.1994.

(2) Judgment C-375/95 of 23 October 1997.

(3) Judgment C-393/98 of 22 February 2001.