WRITTEN QUESTION P-1662/00 by Ari Vatanen (PPE-DE) to the Commission. Incompatibility of motor vehicle taxation in Finland with Community law.
Date: 2000-05-18
Institutions: European Parliament, Provisional data
Subjects: Finland, VAT, infringement of EU law, used goods, vehicle tax

C 53 E/172

Official Journal of the European Communities

EN

20.2.2001

(2001/C 53 E/223)

WRITTEN QUESTION E-1655/00

by Adriana Poli Bortone (UEN) to the Commission

(29 May 2000)

Subject: LIFE project

Could the Commission make provision in the LIFE project for financial assistance for small and medium-
in particular those SMUs that are already
sized firms engaging in environment-friendly activities,
established and that
(local organisations, parks) where
unauthorised settlements (cid:129) destined for redevelopment (cid:129) have been built?

intend to operate within protected areas

Answer given by Mrs Wallstr(cid:246)m on behalf of the Commission

(4 July 2000)

Irrespective of whether small and medium-sized enterprises (SMEs) carry out
their activities within
protected areas, financial support is available from (cid:145)Life-Nature(cid:146) for actions concerning the conservation
of natural habitats and species of Community importance and, in particular, the implementation of the
Natura 2000 network.

SMEs also have access to (cid:145)Life-Environment(cid:146), whose purpose is to contribute to the development of
innovative and integrated techniques and methods and to the further development of the Community(cid:146)s
environment policy.

(2001/C 53 E/224)

WRITTEN QUESTION P-1662/00

by Ari Vatanen (PPE-DE) to the Commission

(18 May 2000)

Subject: Incompatibility of motor vehicle taxation in Finland with Community law

In 1998, when the Commission issued a letter of notice concerning taxation of second-hand motor
vehicles imported into Finland from other Member States, it asked for any other violations of Community
law relevant to the case to be reported to it. I therefore wish to mention three points.

Firstly, the basis for taxation of vehicles imported from Community countries is significantly more
stringent than that for taxation of vehicles manufactured in Finland itself. The fundamental error in
Finland(cid:146)s law on motor vehicle taxation is that the entire basis for assessment of tax on a vehicle
manufactured in Finland is (cid:145)the cost of manufacture at the place of manufacture(cid:146), whereas for vehicles
imported from other Member States it is the customs value, which in the case of new vehicles is (cid:145)the
importer(cid:146)s purchase price(cid:146), while in the case of second-hand vehicles it is (cid:145)the Finnish importer(cid:146)s sale price(cid:146).

Secondly, the linear system for calculating the decline in the value of a vehicle for purposes of Finnish
taxation does not correspond with the actual decline in the value of vehicles. A seven-month old VW Golf
imported from Germany, for instance, costs more than 160 000 marks after tax, whereas a similar vehicle
could be bought new from a retailer for just 125 000 marks. Under the case law of the Court of Justice of
the EC, the principle of neutrality is violated if a product imported from another Member State is taxed
more heavily than a domestically produced product, even if only in individual cases.

Thirdly, Finland(cid:146)s taxation of motor vehicles violates the EC(cid:146)s Sixth Directive on VAT. Whereas the
directive lays down quite clearly that VAT is to be levied on second-hand motor vehicles in the country
of the vendor, in the case of second-hand vehicles imported into Finland VAT is levied in Finland as well
as in the country of the vendor. This is done in such a way that in Finland VAT is levied on the car tax.

20.2.2001

EN

Official Journal of the European Communities

C 53 E/173

From the point of view of consumers in Finland, the EU(cid:146)s internal market is not working where the
purchase of second-hand cars is concerned. Further evidence of this lies in the fact that fewer than 1 000
second-hand cars have been imported into Finland from other Member States per annum, while for
example in 1998 some 50 000 were imported into Sweden from Germany alone. What will
the
Commission do to alter Finland(cid:146)s taxation of motor vehicles, which on the above three grounds violates
Article 95 (Article 90) of the Treaty establishing the EC and the EC Directive on VAT? What urgent
measures will the Commission take to protect the rights of consumers in Finland?

Answer given by Mr Bolkestein on behalf of the Commission

(30 June 2000)

The Finnish government has followed up the 1998 letter of formal notice by making a number of
amendments to national law. In particular, it has increased the rate of depreciation used to calculate the
assessment basis for the motor-vehicle tax from 6 % a year to 7,2 % a year for second-hand cars. For
vehicles over eight years(cid:146) old the rate is now 10,8 %, breaking with the linear system previously applied
throughout a vehicle(cid:146)s life. It has also abolished the previous 75 % ceiling on depreciation, now recognising
rates of depreciation in excess of that ceiling. The Finnish authorities have also abolished the limits on
tax incentives for clean vehicles (cid:129) previously confined to new cars (cid:129) and extended them to second-hand
cars satisfying the same criteria. Lastly, it has abolished the requirement that vehicles have at least 10 000
kilometres on the clock before they can be considered to be second-hand.

In view of these amendments and the improvements they represent for car-owning taxpayers, and taking
account of the lack of clear rules on motor-vehicle taxation, which has still to be harmonised at
Community level, the Commission considers the new legislation an acceptable response to the objections
raised. It is, however, reserving its final conclusions until the Court of Justice has ruled on similar issues in
Case C-393/98, Gomes Valente, in which a judgment is expected shortly. It will also be taking account of
the information provided by the Honourable Member.

As for those parts of the Honourable Member(cid:146)s question not covered by the above-mentioned infringement
procedure, namely those concerning the assessment basis applied to motor-vehicles made in Finland and
those originating in other Member States, the rules governing the levying of VAT on vehicles and the
statistics on vehicle imports into Finland, the Commission will look into these issues, drawing on all the
information at its disposal and contacting the Finnish authorities wherever necessary, with a view to
ensuring compliance with Community law.

(2001/C 53 E/225)

WRITTEN QUESTION P-1665/00

by Mario Mauro (PPE-DE) to the Commission

(18 May 2000)

Subject: Violation of the rights of the child

The Italian Prime Minister(cid:146)s Office (cid:129) Social Affairs Department (cid:129) Committee for Minors, ruled on 3 May
2000 that Izabayo Fidencie, a Rwandan girl without identity papers living in Italy, should be expatriated to
Switzerland to her would-be father, Nshimiyimana Juvenal, despite the existence of documents proving
beyond a shadow of doubt that he is acting in bad faith.

The appeal brought in the Administrative Court of the Lazio region against the decision taken by the
Social Affairs Department of the Prime Minister(cid:146)s Office in this tragic case, without a detailed examination
of the available evidence provided by the Rwandan Government and proving that the statements made by
Nshimiyimana Juvenal were untrue, reveals the superficial nature of the administrative provisions in force.