Tulliasiamies and Antti Siilin.
Date: 2002-09-19
50 The Court has previously held that the mere reference to the Customs Code for determining taxable value is not in itself contrary to the Treaty (see Case C-228/98 Douanias [2000] ECR I-577, paragraph 45).
52 Article 95 of the Treaty seeks to guarantee the complete neutrality of internal charges as regards competition between products already on the domestic market and imported products (see, to that effect, Case C-47/88 Commission v Denmark [1990] ECR I-4509, paragraph 9, and Nunes Tadeu, paragraph 18).
53 According to settled case-law, the first paragraph of Article 95 of the Treaty is infringed where the tax charged on the imported product and that charged on the similar domestic product are calculated in a different manner on the basis of different criteria which lead, if only in certain cases, to higher taxation being imposed on the imported product (Commission v Greece, paragraphs 20 and 29, Case C-213/96 Outokumpu [1998] ECR I-1777, paragraph 34, and Case C-393/98 Gomes Valente [2001] ECR I-1327, paragraph 21).
54 In particular, it is contrary to the first paragraph of Article 95 of the Treaty to levy a tax on imported used vehicles based on a value which is higher than the real value of the vehicle with the result that imported used vehicles are taxed more heavily than similar used vehicles which are on sale on the domestic market (see, to that effect, Commission v Denmark, paragraph 22). In taxing used vehicles, their actual depreciation must therefore be taken into account.
55 Thus the Court has held that the charging by a Member State of a tax on used cars from another Member State is contrary to the first paragraph of Article 95 of the Treaty where the amount of the tax, being calculated without taking the vehicle's actual depreciation into account, exceeds the residual tax incorporated in the value of similar used vehicles already registered in the national territory (see Nunes Tadeu, paragraph 20, and Gomes Valente, paragraph 23).
56 Moreover, in order to determine whether products are similar within the terms of the prohibition laid down in the first paragraph of Article 95 of the Treaty, it is necessary to consider whether they have similar characteristics and meet the same needs from the point of view of consumers (see Case C-265/99 Commission v France [2001] ECR I-2305, paragraph 42 and the case-law cited).
61 Consequently, the answer to the first question must be that the first paragraph of Article 95 of the Treaty allows a Member State to apply to used vehicles imported from another Member State a system of taxation under which the taxable value is determined by reference to the customs value as defined by the Customs Code and implementing regulation, but precludes the taxable value from varying according to the marketing stage where this may result, at least in certain cases, in the amount of the tax on an imported used car exceeding the amount of the residual tax incorporated in the value of a similar used car already registered in the national territory.
Question 2
73 To answer the second question, it must be examined, first, whether the first paragraph of Article 95 of the Treaty allows national legislation to take the value of a new vehicle as the basis for determining the taxable value of an imported used vehicle.
74 It should be noted that it is settled case-law that the vehicle used as a reference for calculating the tax on an imported used car must be a similar vehicle.
75 Products such as cars are similar for the purposes of the first paragraph of Article 95 of the Treaty if their characteristics and the needs which they serve place them in a competitive relationship, with the degree of competition between two models depending on the extent to which they meet various requirements regarding price, size, comfort, performance, fuel consumption, durability, reliability and other matters (Commission v France, paragraph 43).
76 As the Advocate General observes in point 71 of her Opinion, the reference vehicle must be the one whose characteristics are closest to those of the imported vehicle, which implies that account must be taken of the model, type and other characteristics such as drive and equipment.
78 It should be noted that, in paragraph 22 of Commission v Greece, the Court observed that the annual depreciation in the value of cars is in general considerably more than 5%, that that depreciation is not linear, especially in the first years when it is much more marked than subsequently, and that vehicles continue to depreciate more than four years after being put into circulation. It should be added that a vehicle starts to depreciate as soon as it is bought or brought into use.
80 The answer to Question 2 must therefore be that the first paragraph of Article 95 of the Treaty precludes a Member State from applying to used cars imported from another Member State a system of taxation under which the tax on those vehicles
- is equal, during the first six months from the registration or bringing into use of the vehicle, to the tax charged on a similar new vehicle, and
- is equal, from the 7th to the 150th month of use of the vehicle, to the tax on a similar new vehicle, with a linear reduction by a percentage of 0.5% per full calendar month,
since such a system of taxation does not take the actual depreciation of the vehicle into account and does not provide a guarantee that the amount of tax it determines will in no case exceed the residual tax incorporated in the value of a similar used car already registered in the national territory.
Question 3
85 It may be seen from Gomes Valente, paragraph 26, that a system of taxation of imported used cars which takes into account the actual depreciation of the vehicles on the basis of general criteria is compatible with the first paragraph of Article 95 of the Treaty only if it is arranged in such a way, making allowance for the reasonable approximations inherent in any system of that type, as to exclude any discriminatory effect.
86 On this point, the Court has already mentioned the factors of depreciation which may be taken into account so that the flat-rate method of calculating the tax on imported used cars reflects precisely their actual depreciation and is best able to attain the objective of taxation on such cars which, making allowance for the reasonable approximations inherent in any system of that type, does not exceed the amount of the residual tax incorporated in the value of similar used vehicles already registered in the national territory (see Gomes Valente, paragraph 28).
87 For such a system to be compatible with the first paragraph of Article 95 of the Treaty, the criteria on which the flat-rate method of calculating the depreciation of vehicles is based must, in any event, be made known to the public.
88 Furthermore, such compatibility also presupposes that the owner of an imported used vehicle is able to challenge the application of a flat-rate method of calculation to that vehicle in order to demonstrate that it leads to taxation exceeding the amount of the residual tax incorporated in the value of similar used vehicles already registered in the national territory (Gomes Valente, paragraph 32).
99 The Court has held that among the essential characteristics of value added tax are the following features: it applies generally to transactions relating to goods or services; it is proportional to the price charged by the taxable person in return for the goods and services which he has supplied; it is charged at each stage of the production and distribution process, including that of retail sale, irrespective of the number of transactions which have previously taken place; the amounts paid during the preceding stages of the process are deducted from the tax payable by a taxable person, with the result that the tax applies, at any given stage, only to the value added at that stage and the final burden of the tax rests ultimately on the consumer (see Joined Cases C-338/97, C-344/97 and C-390/97 Pelzl and Others [1999] ECR I-3319, paragraph 21 and the case-law cited).
101 First, the tax on car tax does not constitute a general tax since it is not intended to catch all economic transactions in the Member State concerned (see, to that effect, Case C-208/91 Beaulande [1992] ECR I-6709, paragraph 16, and Case C-130/96 Solisnor-Estaleiros Navais [1997] ECR I-5053, paragraph 17). It is apparent from Paragraph 5 of the Autoverolaki, read in conjunction with Paragraph 1 of that law, that the tax on car tax in fact concerns only a limited class of goods, namely certain vehicles. It does not, therefore, apply generally to transactions relating to goods or services. Moreover, it arises exclusively on payment of the tax payable on the registration or bringing into use of such vehicles.
103 Third, and finally, the tax on car tax does not have to be paid at each stage in the production and distribution process, which is however necessary for a tax to be categorised as value added tax (see Case 295/84 Rousseau Wilmot [1985] ECR 3759, paragraph 15, Case C-347/90 Bozzi [1992] ECR I-2947, paragraph 12, and Case C-437/97 EKW and Wein & Co. [2000] ECR I-1157, paragraph 49), but only on the charging of car tax. Moreover, the effect of the tax is not to tax the added value at a particular stage of production and distribution, but the total value.
115 As regards categorisation as a charge having equivalent effect, it is settled case-law, most recently set out in Case C-234/99 Nygård [2002] ECR I-0000, paragraph 17, that the provisions relating to charges having equivalent effect and those relating to discriminatory internal taxation cannot be applied together, so that the same charge cannot, under the system established by the Treaty, belong to both those categories at the same time.