C-101/00 Tulliasiamies and Siilin

JUDGMENT OF THE COURT (Fifth Chamber)

19 September 2002 *

In Case C-101/00,

REFERENCE to the Court under Article 234 EC by the Korkein hallinto-oikeus (Finland) for a preliminary ruling in the proceedings pending before that court brought by

Tulliasiamies,

Antti Siilin,

on the interpretation of the first paragraph of Article 95 of the EC Treaty (now, after amendment, the first paragraph of Article 90 EC) and of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), in the version of Council

* Language of the case: Finnish.

Directive 92/111/EEC of 14 December 1992 amending Directive 77/388/EEC and introducing simplification measures with regard to value added tax (OJ 1992 L 384, p. 47),

THE COURT (Fifth Chamber),

composed of: P. Jann, President of the Chamber, S. von Bahr, A. La Pergola, M. Wathelet (Rapporteur) and C.W.A. Timmermans, Judges,

Advocate General: C. Stix-Hackl,

Registrar: L. Hewlett, Principal Administrator,

after considering the written observations submitted on behalf of:

— Mr Siilin, by P. Snell, oikeustieteen kandidaatti,

— the Finnish Government, by T. Pynnä and E. Bygglin, acting as Agents,

— the Commission of the European Communities, by E. Traversa and I. Koskinen, acting as Agents,

having regard to the Report for the Hearing, after hearing the oral observations of Mr Siilin, the Finnish Government and the Commission at the hearing on 12 September 2001,

after hearing the Opinion of the Advocate General at the sitting on 25 October 2001,

gives the following

Judgment

Legal context and the dispute

1By order of 15 March 2000, received at the Court Registry on 17 March 2000, the Korkein hallinto-oikeus (Supreme Administrative Court) referred to the Court for a preliminary ruling under Article 234 EC six questions on the interpretation of the first paragraph of Article 95 of the EC Treaty (now, after amendment, the first paragraph of Article 90 EC) and of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), in the version of Council Directive 92/111/EEC of 14 December 1992 amending Directive 77/388/EEC and introducing simplification measures with regard to value added tax (OJ 1992 L 384, p. 47) ('the Sixth Directive').

2Those questions were raised in two appeals to the Korkein hallinto-oikeus, one by Mr Siilin and the other by the Tulliasiamies (Customs Agent), against a decision of the Uudenmaan lääninoikeus (Uusimaa Provincial Administrative Court) in proceedings between Mr Siilin and the Finnish customs authorities concerning the tax levied on the import into the Republic of Finland of a used car which he had acquired in another Member State.

The national legal background

3The relevant provisions of national law are in the Autoverolaki (Law on car tax, 1482/1994) of 29 December 1994, in the version applicable in 1998, and the Arvonlisäverolaki (Law on value added tax, 1501/1993), as amended by laws 1483/1994, 1486/1994 and 1767/1995.

4Paragraph 1 of the Autoverolaki provides that car tax must be paid before the registration or bringing into service of private cars and other classes of vehicles. The provisions of the Tieliikennelaki (Road Traffic Law, 267/1981) lay down the criteria for classifying motor vehicles in the various classes.

5Under Paragraph 6(1) of the Autoverolaki:

'Car tax shall be payable on the amount of the car's taxable value less FIM 4 600. The amount of tax shall however always at least be 50% of the car's taxable value.'

6Paragraph 7 of the Autoverolaki provides:

'On an imported used vehicle, tax shall be charged on an equivalent new vehicle, reduced however by 0.5% thereof for each completed calendar month calculated from the date on which the vehicle has been registered or in use for six months to the date of the tax declaration. If the date of first registration of the vehicle or the date of first bringing into use cannot be reliably stated, the period of use shall be calculated from the end of the year of manufacture. The tax shall be reduced only for the first 150 months of use.

If an equivalent new vehicle cannot be identified, the tax shall be determined on the basis of the tax on the new vehicle most nearly equivalent as regards technical and other characteristics.

The provisions of this paragraph shall not apply to vehicles if... 25 years or more have passed from the end of the year of manufacture.'

7Paragraph 10 of the Autoverolaki states that an imported vehicle is to be regarded as a used vehicle if, according to reliable indications, it has been driven for more than 10 000 km and if it has been registered abroad for longer than six months.

8Paragraph 11 of the Autoverolaki provides:

'The basis of the taxable value of an imported vehicle shall be its acquisition value to the taxpayer less the amounts mentioned in Paragraph 16.

The acquisition value of an imported vehicle shall be:

1. in accordance with the Customs Code of the European Community (Council Regulation (EEC) No 2913/92 of 12 October 1992 [establishing the Community Customs Code, OJ 1992 L 302, p. 1, "the Customs Code"]), for a vehicle imported as other than Community goods, the customs value within the meaning of the Customs Code and Commission Regulation (EEC) No 2454/93 of 2 July 1993 [laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code, OJ 1993 L 253, p. 1, "the implementing regulation"]; and

2. the value of a vehicle imported as Community goods, which shall be determined in accordance with the provisions of point 1 as far as applicable.

All costs directly or indirectly incurred by the taxpayer before tax in respect of the vehicle in bringing it to Finland or to the taxpayer's first place of storage in Finland, and also customs duty if payable in respect of the vehicle, shall be included in the taxable value.

The taxable value of a vehicle manufactured in Finland, if the manufacturer is a taxpayer, shall be the price of the vehicle at the place of manufacture defined on the basis of the costs of manufacture of the vehicle.

...'

9It is apparent from the order for reference that the system of taxation laid down by the Autoverolaki, as it applied in March 1998 and hence to the facts at issue in the main proceedings, was the subject of a letter of formal notice from the Commission. The Finnish Government replied on 29 June 1998 that it intended to draw up by autumn 1998 the necessary proposals for amending the provisions of that law which had been criticised by the Commission.

10The Law amending the Autoverolaki (1160/1998) entered into force on 15 January 1999, and amended inter alia the percentage of the monthly tax reduction on a used vehicle. The percentage of the reduction, which had previously been fixed at 0.5% of the tax on an equivalent or nearly equivalent new vehicle, thus became 0.6% for the first 100 months of use, 0.9% for the next 100 months and 0.4% after that, those two percentages being calculated on the residual value of the tax at the end of the preceding month. However, the amending law does not apply to the facts at issue in the main proceedings, and is thus not material to the present proceedings.

11Paragraph 5 of the Autoverolaki provides that the person liable to pay car tax is also to be liable to pay value added tax on the car tax, the amount of which — corresponding to a percentage of the car tax — is laid down by the Arvonlisäverolaki.

12Under Paragraph 102(1)(4) of the Arvonlisäverolaki:

'The taxpayer may deduct, in respect of a taxable business activity:

4. value added tax paid on car tax under the Autoverolaki'.

13Paragraph 102(1)(4) of the Arvonlisäverolaki applied for one year only. It was repealed by Law 1767/1995 of 29 December 1995, which entered into force on 1 January 1996.

14Paragraph 102b of the Arvonlisäverolaki provides:

'The right to deduct value added tax levied on car tax shall be conditional on a debit decision which shows the amount of tax payable.'

15It is apparent from Paragraph 141(5) of the Arvonlisäverolaki that the deductions of tax referred to in Paragraph 102(1)(4) of that law are allocated to the month during which the tax is paid.

The main proceedings and the questions referred for a preliminary ruling

16On 2 March 1998 Mr Siilin bought from a garage in Germany, at a price of DEM 7 350, a used Mercedes Benz car (model 190 2.0 diesel). The car had been brought into use on 13 November 1986 and had done 180 000 km. It had an automatic transmission and a sunroof.

17On 20 April 1998 Mr Siilin imported the car into Finland and declared it to the Helsinki district customs board ('the customs office') for the purposes of car tax.

18By decision of 20 April 1998 ('the assessment notice'), the customs office determined the amount of car tax payable by Mr Siilin at FIM 46 288 and the amount of value added tax on that tax (at the rate of 22%) at FIM 10 183, making a total of FIM 56 471.

19That amount was calculated by the customs office on the basis of a comparison between Mr Siilin's used car and a car of the same make, of a different model (C 220 D) but with technical characteristics very similar to those of the model of Mr Siilin's car. The list price for the reference car as a new car in Germany was DEM 41 100 excluding tax. The customs office added to that price DEM 2 200 for the automatic transmission and DEM 1 680 for the sunroof. The taxable value was thus fixed at DEM 44 980, or FIM 136 851 after conversion. Pursuant to the Autoverolaki, a flat-rate reduction of FIM 4 600 and an amount of FIM 85 963, corresponding to a depreciation coefficient of 65%, were deducted from that amount.

20On 21 April 1998 Mr Siilin paid the customs office the car tax and the value added tax thereon. He then brought proceedings against the assessment notice in the Uudenmaan lääninoikeus, which had jurisdiction.

21He submitted, first, that the amount of the tax fixed for the car he had imported was greater than the amount of the residual tax incorporated in the value of a car already on the Finnish market, registered new in Finland and similar in age, characteristics and condition. He claimed that the tax levied was therefore discriminatory and contrary to Article 95 of the Treaty. Citing the judgments in Case C-345/93 Nunes Tadeu [1995] ECR I-479 and Case C-375/95 Commission v Greece [1997] ECR I-5981, he argued that the depreciation of a car cannot be linear and that its value falls by more than 5% a year.

22He submitted, second, that the charging of value added tax on the car tax was contrary to the Sixth Directive, so that that tax should not be applied.

23He therefore sought, first, annulment of the assessment notice as regards the value added tax on the car tax. He sought, second, for the case to be remitted to the customs office as regards the car tax, in order for that tax to be fixed in such a way as not to exceed the amount of residual tax incorporated in the value of a car already on the Finnish market, registered new in Finland and similar in age, characteristics and condition.

24The customs office submitted that Mr Siilin's action should be dismissed, arguing that the car tax and the value added tax on that tax had been determined in accordance with Finnish law.

25In its decision of 3 June 1999, the Uudenmaan lääninoikeus found that it was in accordance with Article 7 of the Autoverolaki to determine the amount of tax on Mr Siilin's car by referring to the tax on a new car with similar technical and other characteristics and making a reduction as provided for by that law.

26Noting, however, that the car in question was a used car imported into the Republic of Finland from another Member State, the Uudenmaan lääninoikeus pointed out that in Nunes Tadeu the Court had ruled that it was contrary to Article 95 of the Treaty for a Member State to charge on used cars from other Member States a tax which, being calculated without taking the vehicle's actual depreciation into account, exceeded the residual tax incorporated in the value of similar used cars already registered in the national territory.

27The Uudenmaan lääninoikeus held that in this case the car tax had been calculated without the customs office examining the actual depreciation of Mr Siilin's car or checking whether the amount of car tax fixed for that vehicle exceeded the residual tax incorporated in the value of a similar used car of the same make and year registered in Finland. It therefore set aside the assessment notice as regards the car tax and remitted the case to the customs office to determine the amount of that tax.

28As regards the value added tax on the car tax, the Uudenmaan lääninoikeus held that it was not contrary to the Sixth Directive to levy it, since it was not a tax which by its essential properties constituted 'value added tax' within the meaning of that directive or a turnover tax prohibited by Article 33 of the directive.

29However, having set aside the part of the assessment notice which concerned the car tax because of its excessive amount, the Uudenmaan lääninoikeus considered that the value added tax on that tax might also have been set too high. It therefore set aside the assessment notice and remitted the case to the customs office with respect to the value added tax as well.

30Two applications were made to the Korkein hallinto-oikeus for leave to appeal against the decision of the Uudenmaan lääninoikeus.

31One application, by the Tulliasiamies, sought for the decision of the Uudenmaan lääninoikeus to be set aside with respect both to the car tax and to the value added tax thereon. The other application, by Mr Siilin, related only to the part of the decision concerning the value added tax on the car tax. He sought for the decision to be set aside in that respect and a declaration that such value added tax should not be charged in relation to the car he had imported.

32In those circumstances, the Korkein hallinto-oikeus decided to stay proceedings and refer the following questions to the Court for a preliminary ruling:

'Car tax

1. Under Paragraph 11 of the Autoverolaki, in determining car tax on a vehicle imported as Community goods, the basis of the taxable value is the transaction value of the vehicle for the taxable person. The transaction value is the customs value within the meaning of the Customs Code and implementing regulation so far as applicable.

May [Article 95 of the Treaty] be interpreted as meaning that such national legislation relating to the determination of the taxable value for car tax purposes is not discriminatory, taking into account in particular that the taxable value of a vehicle will be a different amount depending on the marketing stage at which the importer of the vehicle operates, that is, whether he operates as a wholesaler, a retailer or a consumer?

2. Under Paragraph 7(1) of the Autoverolaki, the basis of the tax levied on an imported used car is the tax on an equivalent new vehicle, with the reductions as laid down in that provision. Under the old law 1482/1994, the tax charged on an imported used car was the tax on an equivalent new car reduced by 0.5% for every complete calendar month calculated from the time when the vehicle had been registered or had been in use for six months, and the tax was reduced for only the first 150 months of use. Under the current law 1160/1998, the tax charged on an imported used car is the tax on an equivalent new car reduced by 0.6% per month of use for the first 100 months of use and then for the next 100 months by 0.9% per month of use of the residual value calculated at the end of each preceding month, and for subsequent months of use by 0.4% of the residual value calculated at the end of each preceding month. Months of use are taken as complete calendar months from when the vehicle was first put into use or registered.

May [Article 95 of the Treaty] be interpreted as meaning that such national tax legislation is not discriminatory, taking into account in particular that

— the starting point is the tax on an equivalent new car,

— under the previous law the tax was reduced only after a period of six months, and

— under both the previous and current law the tax is reduced linearly as described above?

3. In addition to using the bases of calculation prescribed in the national tax legislation, is it always necessary to establish a vehicle's individual characteristics to ensure that the levying of car tax does not lead, in the individual case, to discrimination contrary to [Article 95 of the Treaty] ?

Value added tax payable on car tax

4. May the [Sixth Directive] be interpreted as meaning that the tax called value added tax payable on car tax under Paragraph 5(1) of the Autoverolaki and Paragraph 1(5) of the Arvonlisäverolaki is value added tax within the meaning of the [Sixth Directive], taking into account that under national legislation the tax is levied exclusively on the basis of car tax?

5. If the answer to Question 4 is in the negative, may such a tax nevertheless be regarded as a tax or charge the levying of which is permitted under Article 33 of the [Sixth Directive] ?

6. If such national tax provisions are not regarded as contrary to the [Sixth Directive], may [Article 95 of the Treaty] be interpreted as meaning that those tax provisions are not discriminatory within the meaning of that article?'

The questions relating to car tax

33The first three questions seek to ascertain whether the first paragraph of Article 95 of the Treaty allows a Member State to apply to used vehicles imported from another Member State a tax having the characteristics of the car tax at issue in the main proceedings.

Question 1

34By its first question the national court asks essentially whether 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, determined by reference to the customs value as defined by the Customs Code and the implementing regulation, is defined differently depending on the marketing stage at which the importer of the vehicle operates.

Observations submitted to the Court

35Mr Siilin claims that new cars are imported into Finland essentially by official importers, inasmuch as, for the same new car, the price offered to consumers by an official importer is substantially lower than the price paid by an individual who imports the vehicle directly into Finland. The latter price includes the margins added in the distribution channels in the seller's Member State, which represent on average 30% of the purchase price.

36He further claims that the residual tax incorporated in the value of a used car already on the Finnish market is lower than the tax on a used car imported by a private individual, as a result of taking into account the marketing stage at which the importer of the vehicle operates.

37He thus claims that the tax on a new car imported by an official importer of the make is calculated on the basis of the actual price at which the importer has bought it and is included in the price at which the new car is sold to the final consumer, of which it accounts for 26% to 30%. It is therefore not the sale price of the new car to the consumer, which includes the distributor's margin (generally 2 5% of the sale price, according to Mr Siilin) and other ancillary sums, which is taken into account to calculate the Finnish tax on a new car imported in that way.

38By contrast, according to Mr Siilin, to calculate the tax payable on the import of a used car by an individual, the taxable value is determined by reference to the selling price to the consumer of a similar new car. The difference between that method of calculation and the method described in the preceding paragraph for the importation of a new car by an official importer has the effect that the taxable value of a used car is overestimated in relation to that of a new car and that the tax on imported used cars represents 4 0% to 70% of the price paid by a consumer for the purchase in Finland of a similar used car.

39According to Mr Siilin, the determination by the Finnish authorities of the taxable value of an imported used car by reference to its customs value, taking into consideration the marketing stage at which the importer operates, has the result in practice that the tax on such a car amounts to at least double, proportionally, the tax levied on a similar car imported new by the official importer of the make in Finland and subsequently sold on the Finnish market as a used car.

40The Finnish Government submits, on the other hand, that Article 95 of the Treaty does not preclude taxation such as the car tax levied in Finland, according to objective criteria, on both new and used vehicles (Case 319/81 Commission v Italy [1983] ECR 601, Case 106/84 Commission v Denmark [1986] ECR 833, and Case 196/85 Commission v France [1987] ECR 1597).

41In particular, the car tax may not be regarded as contrary to Article 95 of the Treaty because the marketing stage is taken into account in determining the taxable value of the vehicles. The Finnish Government submits on this point that both the taxable value of a new car and that of a used car are determined by reference to the Community customs legislation. The taxable value of a new car is determined as a rule according to the method set out in Article 29 of the Customs Code, namely by using the actual transaction value of the goods. According to the Government, the use of that value can lead, in the case of two similar new cars, to different taxable values depending on the price paid and the distribution stage. To determine the taxable value of a used car, the most commonly used procedure of those provided for in Article 31 of the Customs Code is, where the person liable for the car tax is a consumer, that which takes as a reference the lowest price, excluding tax, to the consumer of a similar new car, either in the country of purchase of the used car or on the Finnish market.

42The Commission submits that Article 95 of the Treaty does not preclude the application by a Member State of a system of taxation under which the amount of the car tax on a used car imported from another Member State is determined on the basis of the tax applicable, at the time of import of the used car, to a reference new car with a reduction calculated according to the age of the vehicle following rules laid down by law, provided that two conditions are satisfied.

43First, the reference car must be identical in all respects to the imported used car, that is, it must be of the same model and type as the imported car and must be similar in its other characteristics. If such a car is no longer on sale on the date of taxation of the imported new car, the reference car must be a car of the same type and model put on sale earlier. In that case the value of the reference car might be adjusted to take account of inflation.

44Second, the car tax thus determined must not exceed the residual tax incorporated in the value of similar used cars already registered in the Member State of import.

45The Commission argues, on the other hand, that Article 95 of the Treaty precludes the application by a Member State of a system of taxation under which the various marketing stages are taken into account, if that has the consequence that the amount of tax on an imported used car differs from the average amount of the residual tax incorporated in the value of used cars already registered in the national territory.

46It regards the judgment in Case C-68/96 Grundig Italiana [1998] ECR I-3775 as of relevance here, even though that case did not relate to taxation in the automobile sector, as it concerned an Italian tax on audiovisual and photo-optical products. In paragraph 16 of that judgment the Court ruled that the prohibition of discrimination laid down in Article 95 of the Treaty is infringed where a tax is assessed on the value of a product if, in the case of the imported product alone, assessment criteria are taken into consideration which are likely to increase its value in relation to the corresponding domestic product.

47The Commission contends that taking into account the marketing stage at which the importer operates in order to determine the transaction value and hence the taxable value of an imported used car concerns an assessment factor referred to in Grundig Italiana and thus infringes Article 95 of the Treaty, since it results in an unjustified increase in the value of the vehicle, which is incompatible with the principle of non-discrimination.

48The Commission also put forward at the hearing an example with figures to show the discriminatory effect of the car tax for imported used vehicles. After paying the equivalent of EUR 3 758 in Germany to buy his used car, Mr Siilin had to pay in Finland the equivalent of EUR 7 785.08 as car tax and EUR 1 712.64 as value added tax on the car tax. His car thus cost him, in total, EUR 13 255.74. By contrast, the average price on the Finnish market of a used car similar to Mr Siilin's but registered when new in Finland was, at the material time, EUR 9 500, that being confirmed by the certificate of the value of Mr Siilin's car issued by Auto-Data Oy on 21 April 1998. Referring to the document from the Motor Vehicle Sector Information Centre, entitled 'Composition of the price of a private car', produced by Mr Siilin in annex to his reply to the Court's questions, the Commission states that, on 1 January 1997, car tax represented 29.28% of the retail price of a car. It concludes that the amount of residual tax incorporated into the value of a used car comparable to Mr Siilin's, EUR 9 500, amounted to EUR 2 850 at most. It therefore says that Mr Siilin had to pay more than EUR 13 000 for the used car he imported, whereas he would have paid only EUR 9 500 for a similar car bought on the Finnish market.

Grounds

Findings of the Court

49The Court observes, at the outset, that the Autoverolaki refers to the Customs Code and implementing regulation in order to determine the taxable value of a used car at the various marketing stages. Consequently, as the Advocate General says in point 60 of her Opinion, the difference in taxable value according to marketing stages derives from the application of the Community legislation on customs value.

50The 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).

51The Court's case-law relating to the taxation of imported used vehicles should also be recalled.

52Article 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).

53According 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).

54In 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.

55Thus 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).

56Moreover, 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).

57A system of taxation of vehicles such as that at issue in the main proceedings is characterised by the taking into account of different marketing stages in so far as, in the case of a used car already registered in the national territory, car tax may have been paid on it when new on the basis of the purchase value of the new car to the official importer, excluding his profit margin and that of any dealers or retailers, whereas the car tax payable for used cars imported by private individuals is calculated on the basis of the purchase price, to the consumer, of a similar new car, which is as a rule higher than that paid by the official importer.

58Examining whether such a system of taxation is compatible with the first paragraph of Article 95 of the Treaty involves verifying that the amount of tax charged on imported used cars does not exceed the residual tax incorporated in the value of a similar used car already registered in the national territory. That presupposes that the taxable value, defined in both cases by reference to the value of a new vehicle, is assessed in the same way for both terms of the comparison, without taking into account the different marketing stages.

59As that is not necessarily the case in the system of taxation at issue in the main proceedings, it cannot be ruled out — as is confirmed by the calculations submitted to the Court by the Commission and not challenged by the Finnish Government — that the tax levied on the used car imported by a private individual, such as Mr Siilin, calculated on the basis of the sale price to the consumer of a similar new vehicle, may exceed the residual tax incorporated in the value of a similar used car already registered in the national territory. That would be the case, for instance, if the latter vehicle had been taxed when new, taking into consideration a marketing stage where its value was lower.

60A system of taxation such as that at issue in the main proceedings does not therefore exclude altogether the possibility of imported used cars being subjected, in certain cases, to tax in an amount exceeding the residual tax incorporated in the value of a similar used vehicle already registered in the national territory.

61Consequently, 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

62By its second question, the national court essentially seeks to know whether 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.

Observations submitted to the Court

63Mr Siilin, having argued that a system of taxation of imported used vehicles which takes into consideration the marketing stage at which the importer operates is contrary to Article 95 of the Treaty, contends that the monthly reductions provided for in Paragraph 7 of the Autoverolaki are only of marginal importance in assessing the residual proportion of tax incorporated in the value of a similar used car already registered in the national territory. They do not make it possible to avoid discrimination, since the new vehicle used as a reference for calculating the tax on the imported used car and the equivalent new vehicle imported by the official importer have different taxable values from the outset.

64After noting that the Court has already ruled that the reduction of such a tax cannot be linear (Commission v Greece, paragraph 22), Mr Siilin concludes that the reductions laid down in Paragraph 7 of the Autoverolaki are contrary to Article 95 of the Treaty.

65Relying on Nunes Tadeu, he submits that the amount of tax on an imported used car must be calculated on the basis of the tax paid on first registration of a similar car, and that it must be reduced in the same proportions as the reduction in the actual value of the used car.

66Mr Siilin submits, consequently, that the car tax has discriminatory effects for imported used cars and is therefore contrary to Article 95 of the Treaty.

67The Finnish Government contends that, in the context of assessing the compatibility of the car tax with Article 95 of the Treaty, it is not important that the tax on used cars is determined by reference to the tax on a similar new car. The essential point, according to the Court's case-law, is that the reductions applied according to the age of the vehicle correspond to its real depreciation.

68The Finnish Government submits that in practice the real depreciation of vehicles is virtually linear, so that no argument based on Community law can call into question the reductions laid down in Paragraph 7 of the Autoverolaki for calculating the value of imported used vehicles.

69The Commission submits that Article 95 of the Treaty precludes the application by a Member State of a system of taxation under which

— the reduction in the tax on the reference vehicle is determined linearly and the actual depreciation of the used car is not taken into account; or

— the first six months from the registration or bringing into use are left out of the determination of the depreciation of the used car, and its actual depreciation is not taken into account; or — the particular features of the vehicle are not taken into account in the taxation, if the result is that the amount of tax applied to an imported used car is greater than the residual tax incorporated in the value of a similar used car already registered in the Member State concerned.

70Thus, according to the Commission, the failure to take into account the depreciation of the vehicle during the first six months from its registration or bringing into use does not correspond to reality. Similarly, a system of taxation under which, on the expiry of those first six months, the (theoretical) tax on the reference vehicle is reduced in linear fashion is contrary to Article 95 of the Treaty, since it does not permit the actual depreciation of the car to be taken into account.

71The Commission acknowledges that it is impossible to determine by a universal formula the actual depreciation of a vehicle, which depends on a number of factors which may vary by country or by the type or model of car. Since Mr Siilin's car was imported into the Republic of Finland in 1998, it is necessary, in order to determine the actual depreciation of the reference vehicle, to consider the situation observed at that time in that Member State.

72The Commission observes in this respect that the Finnish Government has drawn attention to studies carried out in 1998 to assess the average monthly depreciation of some 30 models of car on the Finnish market. In June 1998 the Finnish Government stated to the Finnish Parliament that, on the basis of those studies, the Autoverolaki was to be amended to make the system of reducing the tax according to the vehicles' age correspond more closely to the depreciation observed in the Finnish market. The Commission is therefore surprised that the Finnish Government should intervene in the present case to defend a tax assessment of April 1998 and maintain that the application of the system of tax reductions in force at that time is compatible with the requirements of Article 95 of the Treaty.

Findings of the Court

73To 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.

74It 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.

75Products 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).

76As 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.

77Second, it must be examined whether the first paragraph of Article 95 of the Treaty allows national legislation concerning the taxation of imported used cars to provide for a reduction of tax which is linear and does not begin until the expiry of the first six months from the registration or bringing into use of the car.

78It 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.

79In those circumstances, a system of taxation under which the tax on an imported used car corresponds to the tax on a similar new car, reduced by 0.5% a month from the expiry of six months from the registration or bringing into use of the car, is not compatible with the requirements of the first paragraph of Article 95 of the Treaty, since it does not take into consideration the actual depreciation of the used car.

80The 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

81By its third question, the national court is essentially asking whether, if a Member State applies to used cars imported from other Member States a system of taxation under which the actual depreciation of vehicles is defined in a general and abstract way on the basis of criteria laid down by national law, the first paragraph of Article 95 of the Treaty requires the individual characteristics of each vehicle to be examined in order to ensure that the amount of tax applied never exceeds the residual tax incorporated in the value of a similar used car already registered in the national territory.

Observations submitted to the Court

82According to the Finnish Government, it is not necessary, in order to take account of vehicles' depreciation, to provide for individual assessments of the value of each of them. A method of calculation defined by statute suffices, if it is based on objective criteria and if it may be regarded as not obstructing the working of the internal market. The Government thus submits that it is compatible with the first paragraph of Article 95 of the Treaty to calculate the reduction of the car tax payable in Finland on the basis of the average depreciation of vehicles.

83The Commission refers to the Gomes Valente judgment, according to which, it claims, a system of taxation based on general criteria is compatible with the first paragraph of Article 95 of the Treaty provided that it is free from any discriminatory effect and that owners of imported used cars have a procedure available for challenging the application to their vehicles of the calculation method based on general criteria.

84The Commission submits that those conditions presuppose that the criteria for calculating the tax are publicised, which was not the case for the taxation system at issue in the main proceedings. The Finnish authorities neither published nor communicated to persons who so requested the results of the studies which they rely on for the purpose of determining the taxable value of imported used cars and depreciation according to age. Nothing in the official documents or the case-file shows that the studies carried out on the Finnish market were objective and scientifically reliable. Moreover, the Finnish tax authorities refused to transmit information which would make it possible to calculate the amount of tax on new cars and the amount of the residual tax incorporated in the value of used cars already registered in the national territory.

Findings of the Court

85It 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.

86On 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).

87For 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.

88Furthermore, 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).

89The answer to Question 3 must therefore be that, where a Member State applies to used cars imported from other Member States a system of taxation under which the actual depreciation of the vehicles is defined in a general and abstract way on the basis of criteria laid down by national law, the first paragraph of Article 95 of the Treaty requires that system of taxation to be arranged in such a way, making allowance for the reasonable approximations inherent in any system of that type, as to exclude any discriminatory effect. That requirement presupposes, first, that the criteria on which the flat-rate method of calculating the depreciation of vehicles is based are made public and, second, that the owner of a used vehicle imported from another Member State is able to challenge the application of a flat-rate method of calculation to that vehicle, which may mean that its particular characteristics have to be examined in order to ensure that the tax applied to it does not exceed the residual tax incorporated in the value of a similar used vehicle already registered in the national territory.

The questions relating to value added tax

90By its fourth to sixth questions, the national court seeks to ascertain whether the tax called 'value added tax' payable on car tax constitutes, first, 'value added tax' within the meaning of the Sixth Directive and is, second, compatible with Article 33 of that directive and the first paragraph of Article 95 of the Treaty. Questions 4 and 5

91By its fourth and fifth questions, which should be taken together, the national court essentially asks whether a tax such as that at issue in the main proceedings, described in national law as 'value added tax' on car tax, constitutes 'value added tax' within the meaning of the Sixth Directive and whether it is compatible with Article 33 of that directive.

Observations submitted to the Court

92Mr Siilin and the Commission both contend that the tax payable on car tax constitutes 'value added tax' within the meaning of the Sixth Directive. According to Mr Siilin, it has features identical to those of value added tax. Thus it can be deducted in the way provided for in Paragraph 102(1 )(4) of the Arvonlisäverolaki. Moreover, it is of a general nature.

93The Commission submits, without explaining its position in more detail, that the tax on car tax, as described by the national court, satisfies all the criteria of value added tax. It points out that this Finnish tax, introduced in December 1995 by Paragraph 5 of the Autoverolaki, was expressly provided for in the Arvonlisäverolaki, that it was stated in the various draft laws proposed in 1994 that this was value added tax, and that the aim was that the consumer should pay, in respect of cars imported directly from abroad, value added tax in addition to car tax.

94The Commission also submits that it is apparent from the proposal for the law introducing the tax on car tax that it was intended to compensate for the impact on tax revenue of the abolition, on the accession of the Republic of Finland to the European Union, of the charging of customs duty on goods coming from other Member States. It was thus estimated that, if a decision were not made to levy a tax on car tax, a loss of several hundred million Finnish marks would be discernible in value added tax receipts.

95The Commission adds that the charging of the tax on car tax is contrary to the Sixth Directive, in particular Article 2, Article 7(1) read in conjunction with Article 10, and Article 28a. First, the tax is contrary to Article 2 of the Sixth Directive because it is charged in the absence of any of the events giving rise to value added tax under that provision. It is levied in respect neither of a commercial transaction performed by a taxable person in the national territory nor of an import within the meaning of Article 2. Next, the tax is not charged following the arrival of the goods on Community territory or their import into Finland. Finally, it is not value added tax charged on intra-Community acquisitions within the meaning of Article 28a of the Sixth Directive.

96The Finnish Government submits that, despite its name, the tax on car tax charged at the value added tax rate is not to be regarded as 'value added tax' within the meaning of the Sixth Directive and is not prohibited by Article 33 of that directive.

97It argues that that tax, which is laid down by a provision of the Autoverolaki and calculated in accordance with the provisions of that law, is charged independently of value added tax. Above all, it does not have the essential characteristics of value added tax. In particular, the tax on car tax is not of general application, it arises exclusively on payment of car tax, it is accordingly levied only once, and it is not charged on the added value of goods or services.

Findings of the Court

98It should be noted, to begin with, that categorisation as value added tax within the meaning of the Sixth Directive depends not on the name given to a national tax in the legislation introducing it, but on whether it has the essential characteristics of value added tax within the meaning of that directive.

99The 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).

100A tax such as the tax payable on car tax described by the national court does not have those features.

101First, 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.

102Second, the amount of the tax on car tax is not proportional to the price of the goods. Only indirectly does that amount depend on the price of a vehicle. As the Finnish Government observes, the basis of assessment to the tax is not the value of the vehicle but the amount of car tax, which is itself calculated on the basis of the price of the vehicle.

103Third, 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] I - 2 9 4 7, paragraph 12, and Case C-437/97 EKW and Wein Sc 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.

104The compatibility with Article 33 of the Sixth Directive of the tax on car tax will now be considered.

105Article 33 of the Sixth Directive precludes the maintenance or introduction of stamp duties or other types of taxes, duties or charges which have the essential characteristics of value added tax. The Court has held that that provision does not preclude the maintenance or introduction of a tax where it does not have any of those characteristics (see EKW and Wein & Co., paragraph 23 and the case-law cited).

106In that the tax on car tax does not have the essential characteristics of value added tax within the meaning of the Sixth Directive, it is not contrary to the provisions of Article 33 of that directive.

107The answer to Questions 4 and 5 must therefore be that a tax such as that at issue in the main proceedings, described in national law as 'value added tax' on car tax, does not constitute 'value added tax' within the meaning of the Sixth Directive and is compatible with Article 33 of that directive.

Question 6

108By its sixth question, the national court asks essentially whether the first paragraph of Article 95 of the Treaty precludes the levying of a tax such as that at issue in the main proceedings, which is payable on car tax.

Observations submitted to the Court

109The Finnish Government submits that the tax on car tax is compatible with Article 95 of the Treaty, since it applies to all vehicles in the same way.

110According to the Commission, the tax on car tax constitutes a charge having equivalent effect to customs duties, contrary to Articles 23 EC and 25 EC. In practice, the tax prevents an individual who is not liable to value added tax from importing new and used cars into Finland.

111However, should the Court hold that the tax on car tax does not constitute a charge having equivalent effect, the Commission submits that the tax produces discriminatory effects as against imported used cars, in so far as, pursuant to Paragraph 102(1)(4) of the Arvonlisäverolaki, a person liable to value added tax is entitled to deduct the tax on car tax in connection with a taxable business activity, while in practice a private consumer who has bought a used car in another Member State is not entitled to do so. Such a consumer is consequently in a less advantageous situation that a purchaser of a used car already registered in the national territory, who does not have to pay either car tax or the tax on car tax, inasmuch as those taxes have already been paid in respect of the car when new. The tax on car tax is thus incompatible with Article 95 of the Treaty, since it does not apply to used cars already registered in the national territory, on which car tax has already been paid, but to used cars imported from another Member State.

Findings of the Court

112As regards the assessment of the compatibility with the first paragraph of Article 95 of the Treaty of a tax such as the tax on car tax, it must be noted that that tax, like the tax on which it is charged, is levied only once, prior to the registration or bringing into use of a vehicle in Finland. Such a tax does not therefore have to be paid in respect of a used car which has already been subjected to it when it was registered or brought into use when new on the basis of its value at that time.

113The Commission's argument that the tax on car tax is contrary to the first paragraph of Article 95 of the Treaty because it applies not to used cars already registered in the national territory but to used cars imported from another Member State must therefore be rejected. It is also immaterial that such a tax is deductible in connection with the exercise of a business activity.

1 14 As the tax provided for in Paragraph 5 of the Autoverolaki is based specifically on car tax, its compatibility with the first paragraph of Article 95 of the Treaty must be assessed according to the same criteria as the compatibility of car tax with that provision. Consequently, that provision of the Treaty precludes a tax such as the tax on car tax where the amount charged by way of that tax on an imported used car exceeds the amount of the residual tax incorporated in the value of a similar used car already registered in the national territory.

115As 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-3657, 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.

116Since the tax on car tax constitutes discriminatory internal taxation in so far as the amount charged as such a tax on an imported used car exceeds the amount of the residual tax incorporated in the value of a similar used car already registered in the national territory, it cannot at the same time constitute a charge having equivalent effect.

117The answer to Question 6 must therefore be that the first paragraph of Article 95 of the Treaty precludes the levying of a tax such as that at issue in the main proceedings, which is payable on car tax, in so far as the amount charged as such a tax on a used car imported from another Member State exceeds the amount of the residual tax incorporated in the value of a similar used car already registered in the national territory.

Costs

Costs

118The costs incurred by the Finnish Government and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court. On those grounds,

THE COURT (Fifth Chamber),

in answer to the questions referred to it by the Korkein hallinto-oikeus by order of 15 March 2000, hereby rules:

1. The first paragraph of Article 95 of the EC Treaty (now, after amendment, the first paragraph of Article 90 EC) 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 Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code and Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Regulation No 2913/92, 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.

2. 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.

3. Where a Member State applies to used cars imported from other Member States a system of taxation under which the actual depreciation of the vehicles is defined in a general and abstract way on the basis of criteria laid down by national law, the first paragraph of Article 95 of the Treaty requires that system of taxation to be arranged in such a way, making allowance for the reasonable approximations inherent in any system of that type, as to exclude any discriminatory effect. That requirement presupposes, first, that the criteria on which the flat-rate method of calculating the depreciation of vehicles is based are made public and, second, that the owner of a used vehicle imported from another Member State is able to challenge the application of a flat-rate method of calculation to that vehicle, which may mean that its particular characteristics have to be examined in order to ensure that the tax applied to it does not exceed the residual tax incorporated in the value of a similar used vehicle already registered in the national territory.

4. A tax such as that at issue in the main proceedings, described in national law as 'value added tax' on car tax, does not constitute 'value added tax' within the meaning of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, in the version of Council Directive 92/111/EEC of 14 December 1992 amending Directive 77/388 and introducing simplification measures with regard to value added tax, and is compatible with Article 33 of that directive.

5. The first paragraph of Article 95 of the Treaty precludes the levying of a tax such as that at issue in the main proceedings, which is payable on car tax, in so far as the amount charged as such a tax on a used car imported from another Member State exceeds the amount of the residual tax incorporated in the value of a similar used car already registered in the national territory.

Jann von Bahr La Pergola

Wathelet Timmermans

Delivered in open court in Luxembourg on 19 September 2002.

R. Grass P. Jann

Registrar President of the Fifth Chamber

OPINION OF ADVOCATE GENERAL STIX-HACKL delivered on 25 October 2001 1

I — Introduction

1These proceedings concern the taxation in one Member State of a second-hand motor vehicle which a private individual bought in another Member State. The questions referred for a preliminary ruling relate to the car tax levied in Finland and the value added tax payable on that tax. While reference is made in these proceedings to importation into Finland, strictly speaking the facts of the case do not concern an 'importation' in the Community law sense, that is, importation into the Community. Rather, the main proceedings concern only the moving of Community goods from one Member State to another, namely Finland. For reasons of simplicity, however, the transfer to Finland will be described below as an importation.

II — Legal background

A — National law

2The present proceedings concern two Finnish tax laws, the Autoverolaki (Motor vehicle tax law) and the Arvonlisäverolaki (Value added tax law).

1. The Autoverolaki

3Under Paragraph 1(1) of the Autoverolaki (1482/1994), for cars (class M 1), vans (class N 1) and other motor vehicles with an unladen weight of up to 1 875 kg, motor cycles (classes L 3 and L 4) and other vehicles in class L, car tax is to be paid to the State in accordance with that law before registration or bringing into use of the vehicle in Finland.

4Paragraph 3 governs the taxation of vehicles at least 50% of whose parts have been replaced. Imported used vehicles are re-taxed if at least 25% of their parts have been replaced.

5Under Paragraph 4(1), the importer of a vehicle or the manufacturer of a vehicle manufactured in Finland is liable to pay car tax.

6Under Paragraph 5, a person who is liable to pay car tax is also liable to pay value added tax on the car tax up to the amount laid down in the Arvonlisäverolaki. The authorities who levy the car tax determine the value added tax liability in accordance with the relevant provisions of the Autoverolaki on car tax.

7Under Paragraph 6(1), car tax is payable in the amount of the taxable value of the vehicle less FIM 4 600. The tax must always, however, be at least 50% of the taxable value.

8Under Paragraph 7, the tax levied in respect of an imported used vehicle is that on an equivalent new vehicle, but reduced in accordance with that provision.

For vehicles in respect of which the tax is determined on or after 15 January 1999, Paragraph 7 applies in the version of Law 1160/1998. Under the version of Paragraph 7(1) previously in force and applicable to the main proceedings, the tax on the equivalent new vehicle was reduced by 0.5% for each complete calendar month, calculated from the date on which the vehicle had been registered or in use for six months. The tax was reduced for the first 150 months only.

If a new vehicle equivalent to the used vehicle cannot be identified, the tax is determined, under Paragraph 7(2), on the basis of the tax on a new vehicle whose technical and other characteristics are closest to those of the imported vehicle. If the period for which the vehicle has been in use is shorter than the period calculated in accordance with subparagraph 1, the tax may be determined according to the actual period of use. If the tax according to the taxable value for an imported used vehicle is greater than the tax ascertained under subparagraph 1, the tax is determined according to the taxable value of the vehicle.

9Under Paragraph 10, a vehicle is regarded as a used vehicle on import if, according to reliable evidence, it has been driven for more than 10 000 km and has been registered abroad for longer than six months. The requirement as to kilometres driven was abolished by the Law of 30 December 1998 (1160/1998).

10Under Paragraph 11, the basis of the taxable value of an imported vehicle is its acquisition value to the taxpayer less the amounts mentioned in Paragraph 16.

Paragraph 11 further provides that:

'The acquisition value of an imported vehicle is:

1. the customs value within the meaning of the Customs Code of the European Community (Council Regulation (EEC) No 2913/92 of 12 October 1992) and Commission Regulation (EEC) No 2454/93 on the implementation of the Customs Code for a vehicle imported as other than Community goods in accordance with the Customs Code; and

2. the value of a vehicle imported as Community goods, which is determined in accordance with the provisions of point 1 as far as applicable.

All costs directly or indirectly incurred by the taxpayer before taxation in respect of the vehicle in bringing it to Finland or to the taxpayer's first place of storage in Finland, and also customs duty if payable in respect of the vehicle, are to be included in the taxable value.

The taxable value of a vehicle manufactured in Finland, if the manufacturer is a taxpayer, is the price of the vehicle at the place of manufacture defined on the basis of the costs of manufacture of the vehicle.

Not included in the taxable value, however, are the value of a normal service of the vehicle for sale or the value of accessories worth a maximum of FIM 500 added to the vehicle in that connection. The vehicle's registration fee and the fee for registration plates are not included in the taxable value.'

11Under Paragraph 12, the value added tax which the taxpayer has paid for the vehicle under the Arvonlisäverolaki is not included in the taxable value which is the basis of the car tax.

12Paragraph 37 requires the taxpayer to make a car tax declaration and regulates the content of the declaration.

13The Autoverolaki applies to the facts of the main proceedings in the version (1482/1994) before its amendment by Law 1160/1998.

2. The Arvonlisäverolaki

14The basic law on value added tax in Finland is the Arvonlisäverolaki (1501/1993). It was amended by Laws 1483/1994, 1486/1994 and 1767/1995.

15Under Paragraph 1(1), value added tax is payable to the State in accordance with this law. Under Paragraph 1(5), the charging of value added tax on car tax is regulated separately in the Autoverolaki (1482/1994).

16Under Paragraph 102(1)(4), the taxpayer is entitled to deduct the value added tax charged on car tax pursuant to the Autoverolaki.

17Paragraph 102b makes the right to deduct the value added tax charged on car tax subject to an assessment decision which discloses the amount of the tax to be paid.

18Under Paragraph 141(5), the deductions referred to in Chapter 10 relate to the calendar month in which the tax due under Paragraph 102(1)(4) has been paid.

B — Community law

19Relevant provisions of Community law are Article 90 EC concerning the prohibition of discriminatory domestic charges and the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment ('the Sixth Directive').

20Article 2 of the Sixth Directive provides:

'The following shall be subject to value added tax:

1. the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such;

2. the importation of goods.'

21Since 1 January 1993, it is only the introduction of goods into the Community, and no longer the introduction from another Member State, which counts as importation. Similarly, throughout the Community, the acquisition of a used vehicle is no longer subject to the value added tax of the State of destination.

22Article 28a of the Sixth Directive contains special provisions for new cars.

23Article 28a(1)(b) provides:

'1. The following shall also be subject to value added tax:

(b) intra-Community acquisitions of new means of transport effected for consideration within the country by taxable persons or non-taxable legal persons who qualify for the derogation provided for in the second subparagraph of (a) or by any other non-tax able person.'

24Article 28a(2) provides, in part:

'2. For the purposes of this Title:

(b) the means of transport referred to in (a) shall not be considered as "new" where both of the following conditions are simultaneously fulfilled:

— they were supplied more than three months after the date of first entry into service. However, this period shall be increased to six months for the motorised land vehicles defined in (a),

— they have travelled more than 6 000 kilometres in the case of land vehicles, sailed for more than 100 hours in the case of vessels, or flown for more than 40 hours in the case of aircraft.

Member States shall lay down the conditions under which the above facts can be regarded as established.'

25Article 33 of the Sixth Directive allows Member States to maintain or introduce certain taxes which cannot be characterised as turnover taxes and do not give rise to formalities connected with the crossing of frontiers.

III — Facts

26On 2 March 1998 Mr Siilin, one of the appellants before the national court, bought a car of the Mercedes Benz 190 2.0 Diesel make from a car dealer in the Federal Republic of Germany for DEM 7 350. The car had been built on 1 January 1986 and registered on 13 November 1986. As accessories it had an automatic transmission and a manually operated slid ing roof. On 20 April 1998 Mr Siilin imported the vehicle into Finland (with 180 000 km on the clock) and made a car tax declaration.

27The Helsingin piiritullikamari (Helsinki District Customs Office) took the value of a new car of the same type as DEM 41 100 and added DEM 3 880 for the accessories. The result was a value, converted into Finnish marks, of FIM 136 851. A flat-rate deduction of FIM 4 600 and a deduction for age of FIM 85 963 were made. The car tax was determined at FIM 46 288 and the value added tax thereon at FIM 10 183. According to Mr Siilin, the list price excluding tax was based on the selling price of the Finnish official importer. On 21 April Mr Siilin paid the entire amount.

28However, Mr Siilin appealed against the tax decision to the competent administrative court, the Uudenmaan lääninoikeus.

29With respect to the value added tax, he sought for the tax decision to be set aside. With respect to the car tax, he asked for the matter to be remitted to the District Customs Office. He submitted on this point, relying on the judgment in Nunes Tadeu, 3 that the car tax could not exceed the residual amount of tax in the value of a car on the Finnish market which corresponded to his used car in age, characteristics and condition.

30The Administrative Court found that the District Customs Office had assessed the car tax without examining the actual depreciation and without examining whether the car tax determined for Mr Siilin's vehicle exceeded the residual amount of tax in the value of an equivalent used car of the same make and year registered in Finland. It therefore quashed the decision as regards the car tax and remitted the case to the District Customs Office to redetermine the amount.

31As regards the Finnish value added tax, the Administrative Court decided that in view of its characteristics this was not value added tax within the meaning of the Sixth Directive and was also not a turnover tax prohibited by Article 33 of that directive. Levying such a tax did not therefore infringe the Sixth Directive. However, since the tax decision had to be retaken with respect to the car tax, the amount of the value added tax thereon also had to be redetermined by the District Customs Office.

32Both the Tulliasiamies (Customs Agent) and Mr Siilin thereupon applied to the Korkein hallinto-oikeus (Supreme Administrative Court) for leave to appeal against the Administrative Court's decision. While the Customs Agent's appeal attacked the decision in relation to the value added tax and the car tax, Mr Siilin's appeal was limited to the value added tax point.

IV — The questions referred for a preliminary ruling

33On 15 March 2000 the Korkein hal linto-oikeus decided to make a reference to the Court for a preliminary ruling on the following questions:

'Car tax

1. Under Paragraph 11 of the Autoverolaki, in determining the car tax on a vehicle imported as Community goods, the basis of the taxable value is the transaction value of the vehicle for the taxable person. The transaction value is the customs value within the meaning of the Customs Code and Implementation Regulation so far as applicable.

May Article 90 EC (formerly Article 95 of the EC Treaty) be interpreted as meaning that such national legislation relating to the determination of the taxable value for car tax purposes is not discriminatory, taking into account in particular that the taxable value of a vehicle will be a different amount depending on which commercial level the importer of the vehicle operates at, that is, whether he operates as a wholesaler, a retailer or a consumer?

2. Under Paragraph 7(1) of the Autoverolaki the basis of the tax levied on an imported used car is the tax on an equivalent new vehicle, with the reductions as laid down in that provision. Under the old law 1482/1994, the tax charged on an imported second-hand car was the tax on an equivalent new car reduced by 0.5% for every complete calendar month calculated from the time when the vehicle had been registered or had been in use for six months, and the tax was reduced for only the first 150 months of use. Under the current law 1160/1998, the tax charged on an imported second-hand car is the tax on an equivalent new car reduced by 0.6% per month of use for the first 100 months of use and then for the next 100 months by 0.9% per month of use of the residual value calculated at the end of each preceding month, and for subsequent months of use by 0.4% of the residual value calculated at the end of each preceding month. Months of use are taken as complete calendar months from when the vehicle was first taken into use or registered.

May Article 90 EC (formerly Article 95 of the EC Treaty) be interpreted as meaning that such national tax legislation is not discriminatory, taking into account in particular that

— the starting point is the tax on an equivalent new car,

— under the previous law the tax was reduced only after a period of six months, and

— under both the previous and current law the tax is reduced linearly as described above?

3. In addition to using the bases of calculation prescribed in the national tax legislation, is it always necessary to establish a vehicle's individual characteristics to ensure that the levying of car tax does not lead, in the individual case, to discrimination contrary to Article 90 EC (formerly Article 95 of the EC Treaty)?

Value added tax on car tax

4. May the Sixth Directive be interpreted as meaning that the tax called value added tax payable on car tax under Paragraph 5(1) of the Autoverolaki and Paragraph 1(5) of the Arvonlisäverolaki is value added tax within the meaning of the Sixth Directive, taking into account that under national legislation the tax is levied exclusively on the basis of car tax?

5. If the answer to Question 4 is in the negative, may such a tax nevertheless be regarded as a tax or charge the levying of which is permitted under Article 33 of the Sixth Directive?

6. If such national tax provisions are not regarded as contrary to the Sixth Directive, may Article 90 EC (formerly Article 95 of the EC Treaty) be interpreted as meaning that that those tax provisions are not discriminatory within the meaning of that article?' V — The questions relating to car tax

34The first three questions concern various aspects of the provisions of the Autoverolaki applicable to the facts at issue in the main proceedings. They will therefore be examined together.

A — Submissions of the parties

35According to Mr Siilin, the car tax discriminates against imported vehicles and therefore infringes Article 90 EC. He submits that, to ascertain the basis of assessment of an imported used car, the tax-free price of a new car is used. In most cases the car tax is greater than the residual amount of tax contained in the value of a similar used car registered in Finland.

36Application of the Finnish tax system leads to a used car imported by a private individual being burdened with at least twice as much tax as a used car which was originally imported when new by an official importer.

37Under Paragraph 7(1) of the Autoverolaki, the tax on an imported used car corresponds to the amount charged on a similar new car, but with reductions in accordance with the provisions of that law. In the case of the importation of a used car by a private individual, the tax payable on a similar new car corresponds to the tax on a vehicle whose basis of assessment includes the seller's margin and other associated amounts. By contrast, an official importer who imports a new car into Finland pays tax on the purchase price, that is, without his margin and miscellaneous costs being included. The tax on new cars imported into Finland by an official importer is therefore less than in the case of the importation of a new or used car by a private individual.

38Mr Siilin takes the view that in those circumstances the monthly reductions laid down in the law have only a slight effect on the residual amount of tax contained in the value of a similar vehicle. The used car and the similar new car imported by an official importer have different bases of taxation. The percentage reductions do not eliminate the discrimination.

TULUASIAMIES AND SIILIN

39Mr Siilin argues from the Nunes Tadeu judgment that, to ascertain the residual amount of tax contained in the value of the vehicle, the tax charged on the occasion of the first registration of the comparable vehicle must be taken into account. That residual amount must then be reduced in proportion to the real depreciation of the used car.

40As regards the linear nature of the reduction in tax, Mr Siilin refers to the judgment in Commission v Greece 4 as showing that such a reduction is not permissible.

41Finally, Mr Siilin submits that it fol 5 lows from the Outokumpu judgment that even tax discrimination which occurs only in certain cases, namely a higher burden on imported products than on products of domestic origin, conflicts with Community law.

42The Finnish Government assumes that car tax does not infringe Article 90 EC. That article does not prohibit the Member States from taxing goods differently, where the tax is calculated on the basis of objective criteria without discrimination against imported goods. To examine the discriminatory character of a tax system for imported vehicles, the tax levied on vehicles imported from other Member States must be compared with the tax levied on used cars which are already on national territory. If in a Member State used cars are not subject to tax on the occasion of a change of owner, the first charging of tax on a vehicle imported from another Member State must be compared with the residual amount contained in the value of a vehicle already in the country.

43To ascertain the equivalent products which form the basis for the comparison, in the opinion of the Finnish Government, the economic context must be taken into account, in addition to the essential characteristics of the vehicle such as make, model and age. That makes it possible, in order to determine the discriminatory effect of a tax levied on imported used cars, to take as the basis of comparison the residual amount of tax contained in the value of a vehicle which is already in the Member State and was imported at the same commercial level and with the same characteristics. Discrimination exists only if the tax levied on used cars exceeds the residual amount contained in the value of a similar vehicle which is already on the market and was taxed as a new car at the same commercial level.

44Car tax is thus determined by applying objective criteria and does not infringe Article 90 EC, since the value used as the basis of assessment may vary according to the economic circumstances of the acquisition of the vehicle.

45As regards the Finnish rules that the starting point is the tax on an equivalent new car and a linear reduction is carried out, such rules do not conflict with Community law. A reduction according to the age of the vehicle corresponds to the real depreciation. Moreover, the real depreciation of a used car is also linear.

46As to the question whether it is necessary to take account of the individual characteristics of the vehicle, the Finnish Government submits that an individual evaluation of every vehicle is not required by Community law.

47According to the Commission, the provisions of the Autoverolaki under which the tax is to be ascertained on the basis of the value of an equivalent new car do not as such infringe Article 90 EC, provided that the new car corresponds to the imported used car in all respects and that the tax thus ascertained does not exceed the residual amount of tax contained in the value of a used car already registered in the Member State.

48The Commission is further of the view that the basis of assessment is excessive. Because of frequent changes of models, it is difficult subsequently, that is, at the time of taxation, to find an identical vehicle of the same category. If such a vehicle is no longer on sale at the time of taxation, the only possible reference is a vehicle of the same model which was previously on sale. Inflation could be taken into account by correcting the value of that vehicle.

49Other features of the Finnish tax provisions could constitute a breach of Article 90 EC. That applies to the taking into account of different commercial levels, which leads to the amount of tax on a used car differing from the residual amount contained in the value of a used car already present on the domestic, that is, Finnish market and already taxed.

50Article 90 EC further precludes a provision under which a linear reduction of 0.5% a month is carried out without taking the vehicle's real depreciation into consideration. The Commission considers that it is not possible to take account of depreciation in a general way, since it depends on numerous factors such as the country, type or model. The Finnish Government has indeed produced a study of depreciation from 1998, but the Commission has no information available as to what depreciation in 1998 actually was. In Commission v Greece the Court stated that annual depreciation is normally greater than 5% and that depreciation is greater in the first few years in particular.

51The Commission adds that a tax system in which individual features are not taken into account infringes Article 90 EC if the result is that the tax levied on an imported used car exceeds the residual amount contained in the value of an equivalent used car already registered in the Member State concerned.

52Finally, the car tax is discriminatory because it places dealers in other Member States at a disadvantage.

B — Opinion

53The first three questions concern various aspects of the Finnish Autoverolaki in the version applicable to the main proceedings. The aspects addressed in the questions all fall within the scope of Article 90 EC, which according to the Court's settled case-law 6 covers not only the rate of tax but also the details of how the tax is levied and the basis of assessment.

54The Finnish provision concerning the tax treatment of repairs and the question whether that provision is discriminatory, which have been raised by the parties, are not the subject of the questions referred, and so not the subject of the present proceedings.

55When assessing measures of the Member States in the light of Article 90 EC, it must be noted that Article 90 EC prohibits a basis of assessment which exceeds the actual value of the object being taxed. 7 In taxing used cars, their actual depreciation must therefore be taken into account.

56Moreover, it is settled case-law 9 that, in assessing tax provisions such as those at issue in the main proceedings, it must be taken into account that the upper limit for taxes is the residual amount contained in the value of the goods being taxed. With a used car, that corresponds to the residue of the tax which was levied on its registration as a new car and is still contained in its value as a used car. This residual amount is directly proportional to the depreciation, in that it decreases in the same proportion as the value of the car.

57Article 90 EC promotes tax neutrality between goods already on the domestic market and imported goods. The article may not, however, be understood as aiming at equality of the final selling price. Its purpose is rather the competitive neutrality of the tax provisions of the Member States, in so far as it precludes rules which eliminate the competitive advantages of an imported product.

58The individual aspects of the Finnish system will be examined below.

1. Commercial level of the purchaser

59The problem of the commercial level, addressed in the first question referred, essentially relates to the question whether Article 90 EC permits taking into account the commercial level of the goods to be taxed. That constitutes a point of law in that the basis of assessment may vary in size according to the commercial level. That, however, leads to different amounts of tax, so that taking the commercial level into account could ultimately be discriminatory.

60(a) The starting point is that Finnish law refers to the Community customs legislation with respect to the value of a used car at each commercial level. The varying taxable value thus results from the application of the Community rules on customs value in the Customs Code and its Implementing Regulation.

61As regards the Commission's doubts as to whether it is compatible at all with the internal market to apply there rules which apply to external trade, the judgment in Dounias 2 should be referred to, in which the Court held that the mere reference to the regulation on customs value for the purpose of determining the taxable value is not in principle contrary to the Treaty.

62(b) The question then arises whether the commercial level of the goods is once of the characteristics of the goods and must actually thus necessarily be taken into account.

63It is decisive for the assessment of a tax provision in the light of Article 90 EC whether the domestic and foreign goods to be compared are equivalent goods. Equivalence is determined by the characteristics of the goods, in this case the used car, and by the requirements of the consumer. Although both aspects are composed of a multitude of elements, which will have to be considered further, there is one thing they have in common: they are aspects which all relate to the vehicle itself. That is not the case, however, for the commercial level at which the used car is situated.

64(c) According to the Court's case-law, it would not be permissible for a national tax provision to be structured in such a way that turnover tax is not taken into account in the same way for determining the basis of assessment for domestic used cars as for imported used cars, just as it would not be permissible to leave certain costs out of account for domestic used cars or to provide for no possibility of deduction for imported used cars as opposed to domestic used cars.

65So even if it is correct that taking the commercial level into account has the effect — as the Commission asserts — of increasing the value of used cars, that taken alone would not be discrimination. Discrimination lies rather in the fact that taking commercial levels into account leads in principle, as may be seen from the calculations submitted, to the amount of tax for a used car being greater in proportion to the value of the car than the amount of tax contained in the value of a new car.

66The Court has consistently held that a tax provision already infringes Article 90 EC if it does not exclude in any event or exclude 'any possibility of imported products being taxed more heavily' than domestic products. If, then, it is only in certain cases that imported used cars are taxed more heavily than used cars already on the domestic market, even that would not be permitted. Under the Finnish system that would be the case, for example, if a higher basis of assessment were used than for an equivalent domestic used car.

67In the present case different bases of assessment apply to the different commercial levels, so that a used car imported at a 'higher value' commercial level is taxed more heavily than one imported at a 'lower value' commercial level or already on national territory. Since some domestic used cars at least are among the less heavily taxed used cars and some imported used cars at least are among the more heavily taxed ones, there is discrimination to that extent.

68That effect makes it clear that a tax provision which provides for different taxation for different commercial levels at least does not exclude the possibility of higher taxation of imported goods in certain cases.

2. Valuation criteria

69The second question concerns certain aspects of the criteria for valuing used cars. The answer should be confined to those circumstances, provisions of national law in particular, which are of importance for deciding the main proceedings.

(a) Reference: equivalent new car

70A national provision under which the starting point for ascertaining the basis of assessment is the value of a new car is permissible under certain conditions. Thus only an equivalent vehicle may be used as reference vehicle.

71Whether the vehicle is (as far as possible) equivalent is to be determined on the basis of the essential characteristics of the vehicle. These include at any event the model, type and certain characteristics such as age, kilometrage, equipment, condition and method of propulsion.

(b) Reduction only after six months

72It should be noted to begin with that the old legal position, that is, the position before 15 January 1999, governs the present case.

73Starting from the principle that the real depreciation is what matters, it appears doubtful whether reducing the value of a new car, for the purpose of ascertaining the value of a used car, only after six months from when it is brought into use or registered complies with the requirements of Article 90 EC.

74Moreover, such a delayed reduction also does not correspond with the results of the study cited by the Finnish Government.

75The Court's case-law contains express statements only on annual depreciation, but it may be deduced from the fact that depreciation in the first few years in particular — according to experience — is much greater than 5% p.a. that the depreciation for the first six months is presumably at least 2.5%. If the actual depreciation in the first months is even greater, that makes the inadequacy of the delayed reduction even clearer.

(c) Linear depreciation

76Since the car tax provisions in force before 15 January 1999 apply to the case at issue in the main proceedings, the linear monthly depreciation by 0.5% provided for therein is material.

77As may be seen from the case-law, however, the real depreciation of used cars 'is not linear'. Such an inflexible rule must therefore conflict with the principle that the actual depreciation should be taken into account.

3. Abstract or individual evaluation

78The third question is to be understood as meaning that the national court wishes to know whether the characteristics of the vehicle are to be taken into account individually or whether evaluation on the basis of abstract criteria is sufficient, that is, consistent with Article 90 EC.

79On the question whether the characteristics of the used car are to be assessed individually or may be determined in the abstract, the judgment of the Court in the Gomes Valente case states that Article 90 EC does not preclude a valuation on the basis of general and abstract criteria under certain conditions. This applies, for example, to fixed tables using criteria such as a vehicle's age, kilométrage, equipment, condition, method of propulsion, make or model. The use of an average price is also permissible.

80It is still, however, a condition of such an — abstract — calculation of value that it may not be discriminatory. The amount of tax resulting from this calculation may not therefore be greater than the residual amount contained in the value of the similar vehicle already registered in the country.

81The transparency or accessibility — referred to by the parties — of such tables in particular and the question whether the practice in this respect at the material time satisfied the requirements of Community law are not the subject of these proceedings, as they are not mentioned in the questions referred for a preliminary ruling. In this respect I will merely refer to the judgment in Gomes Valente, according to which the criteria on which the table is based must be made public.

4. Conclusion

82The answer to the first three questions is therefore that Article 90 EC is to be interpreted as not precluding a national tax provision under which, in order to determine the taxable value of a used car for the purpose of assessing car tax,

— the customs value is used, — the taxable value is determined in such a way that all the essential characteristics of the used car are — at least abstractly — taken into account,

unless this leads to the amount of tax exceeding the amount contained in the value of a used car already taxed and on the domestic market, and to the actual depreciation not being taken into account.

Article 90 EC is further to be interpreted as precluding a national tax provision under which, to determine the taxable value of a used car for the purpose of assessing car tax, the commercial level is to be taken into account, the taxable value is reduced only after six months have elapsed, and the reduction is made in linear fashion in the way applicable in the main proceedings.

VI — The questions concerning value added tax

83The fourth to sixth questions concern the assessment of the value added tax charged on car tax, namely whether it is to be classified as value added tax within the meaning of the Sixth Directive and whether it is compatible with Article 33 of the Sixth Directive and with Article 90 EC.

A — Submissions of the parties

84With respect to the value added tax charged on car tax, Mr Siilin takes the view that it is value added tax within the meaning of the Sixth Directive and conflicts with that directive. Classification as value added tax is supported by the fact that it is deductible under Paragraph 102(1)(4) of the Arvonlisäverolaki and is a general tax. In view of the answer to be given to the fourth question, there is no need to answer the fifth and sixth questions.

85According to the Finnish Government, the value added tax charged on car tax, despite its name, is neither value added tax within the meaning of the Sixth Directive nor a turnover tax prohibited under Article 33 of the Sixth Directive.

86It says that the value added tax charged on car tax is levied in addition to and independently of value added tax. Moreover, it is also levied in a case which does not constitute an acquisition subject to value added tax, namely the purchase of a used car by a consumer in another Member State.

87The Finnish Government further refers to the case-law of the Court on Article 33 of the Sixth Directive defining the essential characteristics of value added tax. In contrast to value added tax, the chargeable event of the tax on car tax is exclusively the payment of the car tax. Moreover, the tax is not charged on the sale of goods or on imports or intra-Community acquisitions. Finally, it is charged once only.

88On the fifth question, the Finnish Government submits that the tax mentioned in Paragraph 5 of the Autoverolaki does not fulfil the essential characteristics of value added tax and does not hinder the functioning of the value added tax system applicable within the Community. Rather, it is a tax permitted under Article 33 of the Sixth Directive.

89On the sixth question, the Finnish Government takes the view that the tax mentioned in Paragraph 5 of the Autoverolaki affects all vehicles in the same way. On the basis of its characteristics, the tax thus does not infringe Article 90 EC.

90At the hearing the Finnish Government expressly rejected the Commission's view that the value added tax can be deducted from the car tax. The value added tax is neutral.

91According to the Commission, the tax charged on car tax constitutes value added tax within the meaning of the Sixth Directive. Since it is levied on the basis of chargeable events other than those provided for in the Sixth Directive, it is not compatible with Article 2 of that directive.

92The value added tax at issue also does not satisfy the criteria of Articles 7 and 10 of the Sixth Directive relating to the importation of goods and the chargeable event.

93Nor is it a tax on intra-Community acquisitions within the meaning of Article 28a of the Sixth Directive.

94Should the Court conclude that the tax is not in fact value added tax within the meaning of the Sixth Directive, then it does not infringe Article 33 of the directive, since it is not a general tax.

95The Commission further submits that the tax at issue infringes Articles 23 EC and 25 EC and is thus to be classified as a charge having equivalent effect to a customs duty. This is because in practice it hinders persons who are not subject to value added tax from importing new or used cars into Finland.

96Should the Court conclude, however, that the tax at issue is neither value added tax nor a charge having equivalent effect to a customs duty, the Commission observes that the tax infringes Article 90 EC in any event, since it is not applicable to domestic used cars but to used cars imported from another Member State; a final consumer who has bought a used car in another Member State has no right to deduct tax. Domestic used cars, by contrast, are not subject to car tax and hence not subject to the value added tax charged thereon.

B — Opinion

97The tax on car tax must be examined in the light of the aspects of Community law raised by the national court.

1. Classification as value added tax within the meaning of the Sixth Directive

98To begin with, the assessment of the tax charged on car tax cannot depend on the name given to that tax in the Member State in question. Nor is it decisive which law the relevant provision was included in, in this case in the value added tax provisions in Law 1501/1993.

99The assessment depends rather on whether the tax at issue displays the characteristics worked out in the Court's case-law.

100(a) These include, first, the possibility of deducting the tax which has already been paid on the preceding transaction. The Finnish provisions admittedly provide for a possibility of deduction, but the effect of the system is not — as required for value added tax — that the added value is taxed; instead the entire value is taxed.

101(b) Next, it is doubtful whether the tax charged on car tax 'applies generally to transactions relating to goods or services'.

102The tax at issue is general in so far as acquisitions by operators subject to value added tax and acquisitions by final consumers are both subject to it. However, the tax on car tax is not payable on goods of all kinds, but only on certain vehicles. It is thus a tax levied on certain goods only, which according to the Court's case-law is not to be regarded as a general tax.

103According to the case-law, taxes which do not apply to 'all economic transactions' are also not to be classified as general taxes. That is the case with the tax at issue in so far as it applies only to the charging of the tax levied on the registration of a vehicle. It is thus a tax which depends on the amount owed by the taxable person, namely the car tax payable.

104In addition, the tax on car tax is due neither on the basis of a supply of goods or services nor on the basis of an importation within the meaning of Article 2 of the Sixth Directive.

105Moreover, the tax on car tax is also not payable — as required for value added tax — at every stage of production and distribution. Rather, the tax is levied under Paragraph 5 of the Autoverolaki — only — on the occasion of levying car tax.

106(c) Finally, it must be examined whether the tax on car tax is, as required for a value added tax, proportional to the value of the goods, that is, the price of the vehicle. In this respect, on the one hand, the Finnish Government is right in so far as not the value of the goods but the car tax forms the basis of taxation, but it is also correct, on the other hand, that the car tax for its part is calculated on the basis of the value of the goods. The tax on car tax is thus based at least indirectly on the value of the goods.

107The tax on car tax therefore in any case does not display all the essential characteristics of a value added tax.

2. Assessment in the light of Article 33 of the Sixth Directive

108It follows from Article 33 of the Sixth Directive that Community law permits 'systems of taxation to exist concurrently with [value added tax]' under certain conditions. 'Member States may therefore introduce taxes which cannot be characterised as turnover taxes' or — in other words — 'taxes, duties or charges which do not have the essential characteristics of [value added tax]'.

109Since, on this interpretation, the tax on car tax does not display all the essential characteristics of value added tax, it is not precluded by the provisions of the Sixth Directive.

3. Assessment in the light of Article 90 EC

110As regards the compatibility of the tax on car tax with Article 90 EC, it must be observed that the tax applies to vehicles which are registered in Finland. A difference in treatment thereby appears — as already with car tax — between used cars which are taken from another Member State to Finland to be registered there and used cars already in the country. Since car tax, including the value added tax thereon, has already been charged on the latter as new cars, they are not subject to those two taxes again if acquired as in Finland as used cars.

111Since the so-called value added tax is charged on car tax, it is essentially to be assessed in the same way as car tax. In so far, therefore, as the amount of the tax on car tax charged on the registration of an imported used car exceeds the amount contained in the value of a used car which is within the country, that tax is discriminatory and infringes Article 90.

112That is because the tax on car tax thereby has the effect that the competitive advantage of a used car imported from another Member State as against a used car which is within the country is eliminated.

4. Conclusion

113The answer to the fourth and fifth questions is therefore that the Sixth Directive is to be interpreted as meaning that a tax called value added tax such as that at issue in the main proceedings may not be regarded as value added tax within the meaning of that directive but as a tax, duty or charge which is permitted under Article 33 of the directive.

V II — Conclusion

114The answer to the sixth question is that Article 90 EC is to be interpreted as meaning that the tax called value added tax is discriminatory as stated in that article in so far as the amount of tax exceeds the amount contained in the value of a used car present on the domestic market and already taxed.

115In conclusion, I propose that the Court answer the questions as follows:

(1) The answer to the first three questions is that Article 90 EC is to be interpreted as not precluding a national tax provision under which, in order to determine the taxable value of a used car for the purpose of assessing car tax,

— the customs value is used,

— the taxable value is determined in such a way that all the essential characteristics of the used car are — at least abstractly — taken into account, unless this leads to the amount of tax exceeding the amount contained in the value of a used car already taxed and on the domestic market, and to the actual depreciation not being taken into account.

Article 90 EC is further to be interpreted as precluding a national tax provision under which, to determine the taxable value of a used car for the purpose of assessing car tax, the commercial level is to be taken into account, the taxable value is reduced only after six months have elapsed, and the reduction is made in linear fashion in the way applicable in the main proceedings.

(2) The answer to the fourth and fifth questions is that the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment — is to be interpreted as meaning that a tax called value added tax such as that at issue in the main proceedings may not be regarded as value added tax within the meaning of that directive but as a tax, duty or charge which is permitted under Article 33 of that directive.

The answer to the sixth question is that Article 90 EC is to be interpreted as meaning that a tax called value added tax such as that at issue in the main proceedings is discriminatory as stated in that article in so far as the amount of tax exceeds the amount contained in the value of a used car present on the domestic market and already taxed.

Notes

(1) Original language: German.

(2) OJ 1977 L 145, p. 1.

(3) Case C-345/93 Nunes Tadeu [1995] ECR I-479.

(4) Case C-375/95 Commission v Greece [1997] ECR I-5981, paragraph 22.

(5) Case C-213/96 Outokumpu [1998] ECR I-1777, paragraph

(41) .

(6) See only Case 74/76 lannelli v Meroni [1977] ECR 557 and Case C-47/88 Commission v Denmark (1990) ECR I-4509, paragraph 18.

(7) Commission v Denmark, cited in note 6, paragraph 22.

(8) Nunes Tadeu, cited in note 3, paragraph 20, and Case C-393/98 Gomes Valente [20011 ECR I-1327, paragraph

(23) .

(9) Commission v Denmark, cited in note 6, paragraph 20.

(10) Gomes Valente, cited in note 8, paragraph 41.

(11) As Advocate General Jacobs said in his Opinion in Nunes Tadeu, cited in note 3, point 17; see also the recent judgment in Gomes Valente, cited in note 8, paragraph 43.

(12) Case C-228/98 Dounias [2000] ECR I-577, paragraph 45.

(13) Case C-265/99 Commission v france [2001] ECR I-2305, paragraph 41.

(14) Commission v france, cited in note 13, paragraph 42, and Case C-421/97 Tarantik [1999] ECR I-3633, paragraph

(28) .

(15) Dounias, cited in note 12, paragraph 48.

(16) Case C-68/96 Grundig Italiana [1998] ECR I-3775, paragraphs 17 to 21.

(17) See on this point Commission v Greece, cited in note 4, patagraph 29 and the case-law referred to there; see also Gomes Valente, cited in note 8, paragraph 37.

(18) Commission v Greece, cited in note 4, paragraph 22; see also Advocate General La Pergola, in point 5 of his Opinion, who assumes that experience contradicts putting a limit of 5% on depreciation.

(19) Commission v Greece, cited in note 4, paragraph 22.

(20) See Gomes Valente, cited in note 8, paragraphs 24, 25 and

(28) .

(21) Gomes Valente, cited in note 8, paragraph 26.

(22) Gomes Valente, cited in note 8, paragraph 34.

(23) The question raised by the Commission of compatibility with Articles 23 EC and 25 EC need not therefore be considered further.

(24) Case C-347/90 Bozzi [1992] ECR I-2947, paragraph 12; see also Case C-208/91 Beaulande [1992] ECR I-6709, paragraph 18.

(25) Bozzi, cited in note 24, paragraph 12 and the case-law cited there.

(26) Case C-109/90 Giant [1991] ECR I-1385, paragraph 14, and Case C-347/95 UCAL [1997] ECR I-4911, paragraph

(36) , concerning a duty on certain milk products.

(27) Beaulande, cited in note 24, paragraph 16, and Case C-130/96 Solisnor-Estaleiros Navais [1997] ECR I-5053, paragraph 17.

(28) On the assessment of such a tax, see Case C-318/96 SPAR [1998] ECR I-785, paragraph 25.

(29) On this point, see only Case 295/84 Rousseau Wilmot [19851 ECR 3759, paragraph 15, Case C-437/97 EKW and Wein Sc Co. [2000] ECR I-1157, paragraph 49, and Bozzi, cited in note 24, paragraph 12.

(30) Rousseau Wilmot, cited in note 29, paragraph 15, Case

(252) /86 Bergandi [1988] ECR 1343, paragraph 15, and Bozzi, cited in note 24, paragraph 12.

(31) Settled case-law since Case 73/85 Kerrutt [1986] ECR

(221) 9.

(32) Giant, cited in note 26, paragraph 9; see also the earlier case Rousseau Wilmot, cited in note 29, paragraph 16.

(33) Bozzi, cited in note 24, paragraph 10.