Fazenda Pública and Ministério Público v Américo João Nunes Tadeu.
Date: 1995-03-09
6 It should first be noted that the tax, which the Court has already considered in Case C-343/90 Lourenço Dias [1992] ECR I-4673, paragraphs 53 and 54, is applied without distinction to vehicles assembled or manufactured in Portugal and to imported new and second-hand vehicles, and forms part of a general system of internal charges imposed on categories of products in accordance with an objective criterion, namely cylinder capacity. Such taxes constitute internal taxation within the meaning of Article 95 of the EEC Treaty.
10 It has been established that the disputed tax applies equally and on the basis of objective criteria to both vehicles assembled or manufactured in Portugal and those which are imported new or second-hand. It does not apply to used car transactions within the country because it is charged only once, when the vehicle is first registered in the national territory, and part of it remains incorporated in the value of second-hand vehicles which have already been registered and purchased on the Portuguese market.
12 However, in applying Article 95, and in particular when comparing the taxes applicable to imported second-hand cars with those applicable to second-hand cars purchased at home, which are similar or competing products, it is necessary to have regard, as the Court held in (inter alia) Case C-47/88 Commission v Denmark ([1990] ECR I-4509, paragraph 18), not only to the rate of direct or indirect internal taxation on domestic or imported products but also to the basis of assessment and the detailed rules for levying the tax.
14 As a result, a motor vehicle tax on imported second-hand vehicles which is not less than 90% of the tax charged on new cars is manifestly excessive for those vehicles compared with the residue of the tax in second-hand vehicles already registered, and purchased on the Portuguese market.
15 Consequently, a rule such as that contained in Article 1(4) of the decree-law which restricts the reduction in the amount of the tax charged on new cars to 10% without having regard to the vehicle' s actual depreciation discriminates against imported second-hand cars.
18 That argument cannot be accepted. A national tax system which is liable to eliminate a competitive advantage held by imported products over domestic products would be manifestly incompatible with Article 95, which seeks to guarantee that internal charges have no effect on competition between domestic and imported products (Commission v Denmark, cited above, paragraph 9).
19 Lastly, the Portuguese Government alluded to certain practical difficulties in estimating the real market value of the second-hand vehicles for the purposes of calculating the tax. Even if their existence were proved, such difficulties cannot justify the application of internal charges which discriminate against products from other Member States in breach of Article 95 of the Treaty.
20 In the light of all those considerations the reply to the first question must be that it is incompatible with Article 95 of the EEC Treaty for a Member State to charge on second-hand cars from other Member States a tax which, being calculated without taking the vehicle' s actual depreciation into account, exceeds the residual tax incorporated in the value of similar second-hand motor vehicles already registered in the national territory.