Commission of the European Communities v Kingdom of Denmark.
Date: 1990-12-11
8 It should be noted in the first place that Article 95 expressly prohibits the imposition on products from other Member States of internal taxation in excess of that imposed on similar domestic products or internal taxation of such a nature as to afford indirect protection to other products .
9 It should also be noted that, as the Court has consistently held ( see most recently the judgment in Case 252/86 Bergandi v Directeur général des impôts [1988] ECR 1343 ) that the aim of Article 95 as a whole is to ensure free movement of goods between the Member States in normal conditions of competition by the elimination of all forms of protection which may result from the application of internal taxation that discriminates against products from other Member States . Thus Article 95 must guarantee the complete neutrality of internal taxation as regards competition between domestic products and imported products .
10 On the other hand, Article 95 cannot be invoked against internal taxation imposed on imported products where there is no similar or competing domestic production . In particular, it does not provide a basis for censuring the excessiveness of the level of taxation which the Member States might adopt for particular products, in the absence of any discriminatory or protective effect .
12 It is true that, as the Court held in its judgment in Case 31/67 Stier v Hauptzollamt Hamburg-Ericus [1968] ECR 235, it is not permissible for the Member States to impose on products which, in the absence of comparable domestic production, escape the application of the prohibitions contained in Article 95 charges of such an amount that the free movement of goods within the common market would be impeded as far as those goods were concerned .
13 Nevertheless, the only possibility of appraising an adverse effect of that kind on the free movement of goods is by reference to the general rules contained in Article 30 et seq . of the Treaty, and the Commission' s action is based exclusively on infringement of Article 95 of the Treaty .
17 It must be observed at the outset that, as the Commission has correctly observed, the fact that there is no Danish production of motor vehicles does not signify that Denmark has no used-vehicle market . A product becomes a domestic product as soon as it has been imported and placed on the market . Imported used cars and those bought locally constitute similar or competing products . Article 95 therefore applies to the registration duty charged on the importation of used cars .
18 It must then be borne in mind that, as the Court held in its judgment in Case 74/76 Iannelli v Meroni [1977] ECR 557, in order to apply Article 95 of the Treaty, not only the rate of direct and indirect internal taxation on domestic and imported products but also the basis of assessment and the detailed rules for levying the tax must be taken into consideration .
19 In that connection, it is undisputed that the taxable value of imported used vehicles is equal to 100% of the price of the vehicle when new where it is less than six months old and 90% of that price where it is more than six months old . On the other hand, the sale of vehicles already registered in Denmark does not give rise to payment of a further registration duty .
20 Accordingly, even if it appears that by reason of the very large amount of tax levied on new cars the portion of the duty still incorporated in the value of the vehicle is written off more slowly in Denmark than in other Member States which levy a lower duty, that does not prevent the levying of a registration duty for which the basis of assessment is at least 90% of the value of the car when new from constituting generally manifest over-taxation of the vehicles in comparison with the residual registration duty in the case of previously registered used cars bought on the Danish market, whatever their age or condition .
21 Consequently, it must be recognized that the rule whereby the basis for the Danish registration duty levied on imported used cars is at least 90% of the price of the vehicle when new leads to discriminatory taxation of imported used cars .
22 In view of the foregoing, it must be held that by imposing a registration duty on imported used motor vehicles based on an estimated value which is higher than the real value of the vehicle with the result that imported used motor vehicles are taxed more heavily than used motor vehicles which are sold on the domestic market after being registered in Denmark, the Kingdom of Denmark has failed to fulfil its obligations under Article 95 of the EEC Treaty .