C-130/96 Solisnor-Estaleiros Navais

FAZENDA PÚBLICA v SOLISNOR ESTALEIROS NAVAIS

JUDGMENT OF THE COURT (First Chamber)

17 September 1997*

In Case C-l30/96,

REFERENCE to the Court under Article 177 of the EC Treaty by the Supremo Tribunal Administrativo (Portugal) for a preliminary ruling in the proceedings pending before that court between

Fazenda Pública

and

Solisnor-Estaleiros Navais SA

also represented: Ministério Público,

on the interpretation of Article 33 of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization 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) and of Article 378 of the Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties (OJ 1985 L 302, p. 23),

* Language of the case: Portuguese.

THE COURT (First Chamber),

composed of: L. Sevón, President of the Chamber, P. Jann and M. Wathelet (Rapporteur), Judges,

Advocate General: P. Léger, Registrar: H. von Holstein, Deputy Registrar,

after considering the written observations submitted on behalf of:

— the Fazenda Pública, by Maria Aldina Moreira;

— Solisnor-Estaleiros Navais SA, by Manuel Rodrigues, of the Almada Bar;

— the Portuguese Government, by Luís Fernandes, Director of the Legal Service in the European Communities General Directorate in the Ministry of Foreign Affairs, and Rui Barreira, Adviser in the Legal Studies Centre of the Presidency of the Council of Ministers, acting as Agents;

— the Commission of the European Communities, by Antônio Caeiro, Legal Adviser, and Enrico Traversa, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Solisnor-Estaleiros Navais SA, represented by Manuel Rodrigues, the Portuguese Government, represented by Luís Fernandes and Ana César Machado, Assistant in the Lisbon Law Faculty, acting as Agent, and the Commission, represented by Antonio Caeiro, at the hearing on 29 January 1997, after hearing the Opinion of the Advocate General at the sitting on 13 March 1997,

gives the following

Judgment

Legal context and the dispute

1By judgment of 28 February 1996, received at the Court on 24 April 1996, the Supremo Tribunal Administrativo (Supreme Administrative Court) referred for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation of Article 33 of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization 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, hereinafter 'the Sixth Directive') and of Article 378 of the Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties (OJ 1985 L 302, p. 23, hereinafter 'the Act of Accession').

2That question has arisen in a dispute between Solisnor-Estaleiros Navais SA (hereinafter 'Solisnor') and the Fazenda Pública (Public Treasury) concerning payment of a charge introduced in the form of a stamp duty by Article 91 of the Tabela Geral do Imposto do Selo (General Scale of Stamp Duties, hereinafter 'the TGIS').

3On 4 June 1992 Solisnor paid stamp duty amounting to ESC 43 586 400 in respect of a works contract concluded on 28 December 1989 with Sociedade Portuguesa de Navios e Tanques SA for the construction of an oil tanker for transporting crude oil.

4Solisnor subsequently sought to have the imposition of that charge set aside before the Tribunal Tributário de Primeira Instância (Fiscal Court of First Instance), Setú bal, which, by a judgment of 21 March 1994, upheld Solisnor's application on the ground that it was contrary to Article 33 of the Sixth Directive.

5Article 33 provides: 'Without prejudice to other Community provisions, the provisions of this Directive shall not prevent a Member State from maintaining or introducing taxes on insurance contracts, taxes on betting and gambling, excise duties, stamp duties and, more generally, any taxes, duties or charges which cannot be characterized as turnover taxes'.

6The Fazenda Pública appealed to the Supremo Tribunal Administrativo against the judgment of the Tribunal Tributário de Primeira Instância, Setúbal, arguing that the stamp duty was not a turnover tax and for that reason was not contrary to Article 33 of the Sixth Directive.

7Solisnor contended that, in view of its characteristics as a general tax on consumption and one proportional to the price of services, the stamp duty was a turnover tax, within the meaning of Article 33, and was accordingly incompatible with the common system of VAT.

8According to the documents in the case, Article 1 of the stamp duty regulation approved by Decree No 12700 of 20 November 1926 provides that the charge is to be levied generally on 'all the documents, books, papers, acts and products specified in the TGIS'. More specifically, it is to be levied, pursuant to Article 91 of the TGIS, on 'works contracts and contracts for the supply of materials or any kind of consumer article'. The amount of stamp duty is calculated on the basis of a rate, varying according to the subject-matter of the contract, applied to the value of the act.

FAZENDA PÚBLICA v SOLISNOR-ESTALEIROS NAVAIS

9Article 91 of the TGIS was repealed by Article 3 of Decree-Law No 223/91 of 18 June 1991, the preamble to which justified the abolition of the articles relating to works contracts — including Article 91 — on the ground of their 'incompatibility with the general tax on consumption covered by value added tax'.

io In its judgment making the reference, the Supremo Tribunal Administrativo points out that on 28 December 1989, the date of the taxable event, Article 91 of the TGIS was still in force, even though the Portuguese Republic had been required since 1 January 1989, in accordance with Article 395 of and Annex XXXVI, Section II, to the Act of Accession, to adopt the measures necessary to ensure compliance with the Sixth Directive. The national court is, however, uncertain whether or not the maintenance of such a charge was authorized by Article 378 of the Act of Accession and Annex XXXII thereto, which allow the Portuguese Republic to grant tax exemptions and to establish a number of derogations.

11The national court has accordingly considered it appropriate to refer the following question to the Court for a preliminary ruling:

'Is the stamp duty having the characteristics mentioned above to be regarded as a turnover tax within the meaning of Article 33 of the abovementioned Sixth Directive, subject to a possible derogation under Article 378 of the Act annexed to the Treaty of Accession or any other provision of Community law?'

i2 By its question, the national court is seeking in substance to ascertain whether Article 33 of the Sixth Directive precludes the maintenance of a national charge having the characteristics of a stamp duty which is levied on works contracts and contracts for the supply of materials or any kind of consumer article and for which the contract value is the basis of assessment. If the answer is in the affirmative, it asks whether the maintenance of such a charge is authorized by Article 378 of and Annex XXXII to the Act of Accession or by any other provision of Community law.

i3 The Court has consistently held (see, in particular, Case 295/84 Rousseau Wilmot v Organic [1985] ECR 3759, paragraph 16; Case C-347/90 Bozzi v Cassa Nazionale di Previdenza ed Assistenza a favore degli Avvocati e dei Procuratori Legali [1992] ECR 1-2947, paragraph 9; and Case C-208/91 Beaulande v Directeur des Services Fiscaux, Nantes [1992] ECR 1-6709, paragraph 12) that, in leaving the Member States free to maintain or introduce certain indirect taxes such as excise duties on condition that they are not taxes which can be 'characterized as turnover taxes', Article 33 of the Sixth Directive seeks to prevent the functioning of the common system of VAT from being jeopardized by fiscal measures of a Member State levied on the movement of goods and services and charged on commercial transactions in a way comparable to VAT.

u Taxes, duties and charges which have the essential characteristics of VAT must in any event be treated as such measures, even thought they are not identical to VAT in all respects. As the Court has pointed out many times, those characteristics are as follows: VAT applies generally to transactions relating to goods or services; it is proportional to the price of those goods or services, irrespective of the number of transactions which take place; it is charged at each stage of the production and distribution process; and, finally, it is imposed on the added value of goods and services, the tax payable on a transaction being calculated after deduction of the tax paid on the previous transaction (see, in particular, Case 252/86 Bergandi v Directeur General des Impôts [1988] ECR 1343, paragraph 15; Joined Cases 93/88 and 94/88 Wisselink and Others v Staatssecretaris van Financiën [1989] ECR 2671, paragraph 18; Case C-109/90 Giant v Gemeente Overijse [1991] ECR 1-1385, paragraphs 11 and 12; Case C-200/90 Dansk Denkavit and Poulsen v Skatteministeriet [1992] ECR 1-2217, paragraph 11; Bozzi, cited above, paragraph 12; and BeauUnde, cited above, paragraphs 12 and 14).

is It follows that Article 33 of the Sixth Directive does not preclude the maintenance or introduction of stamp duties or other types of taxes, duties or charges provided that they do not have the essential characteristics of VAT.

16It is therefore necessary to consider whether a charge of the type described by the national court has such characteristics.

i7 Suffice it to note in this regard that stamp duty of the kind described by the national court is not a general tax since it is not intended to apply to all economic transactions in the Member State concerned (see, to this effect, BeauUnde, paragraph 16). According to Article 1 of the stamp duty regulation, the duty is levied solely on 'the documents, books, papers, acts and products specified in the TGIS', and, more specifically, according to Article 91 of the TGIS, on 'works contracts and contracts for the supply of materials or any kind of consumer article', to the exclusion of a large portion of economic transactions in the Member State concerned, such as contracts for the supply of services or contracts for the sale of movable property, referred to respectively in the former Articles 141 and 50(l)(a) of the TGIS, 'which have now been repealed.

is It is true that, as is clear from the documents in the case, Article 91 of the TGIS was originally part of a system for taxing the generality of transactions relating to goods and services. However, one by one various categories of economic transactions have been excluded from the scope of that system following the repeal of a number of articles of the TGIS, such as Articles 50(l)(a) and 141 mentioned above, when the VAT Code came into force in the Portuguese legal system (see Article 2(2)(d) of Decree-Law No 394-B/84 of 26 December 1984, D. R., Series I, No 297, as amended by Law No 3/86 of 7 February 1986, D. R., Series I, No 32).

i9 In those circumstances, and without its being necessary to examine its other specific features, it must be held that a tax of the type referred to by the national court does not have one of the essential characteristics of VAT.

20The answer to the question submitted must therefore be that Article 33 of the Sixth Directive must be construed as not precluding the maintenance of a national charge having the characteristics of a stamp duty levied on works contracts and contracts for the supply of materials or any kind of consumer article, to the exclusion of a large portion of economic transactions in the Member State concerned.

Costs

2i The costs incurred by the Portuguese Government and the Commission of the European Communities, 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 action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT (First Chamber)

in answer to the question referred to it by the Supremo Tribunal Administrativo by judgment of 28 February 1996, hereby rules:

Article 33 of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment must be construed as not precluding the maintenance of a national charge having the characteristics of a stamp duty levied on works contracts and contracts for the supply of materials or any kind of consumer article, to the exclusion of a large portion of economic transactions in the Member State concerned.

Sevón Jann Wathelet

Delivered in open court in Luxembourg on 17 September 1997.

R. Grass L. Sevón

Registrar President of the First Chamber

FAZENDA PÚBLICA v SOLISNOR ESTALEIROS NAVAIS

O P I N I ON OF A D V O C A TE G E N E R AL L É G ER delivered on 13 March 1997 *

1The question submitted in this case by the Supremo Tribunal Administrativo (Supreme Administrative Court) asks the Court, once again, to interpret Article 33 of the Sixth VAT Directive ' (hereinafter the 'Sixth Directive'), which precludes Member States from maintaining or introducing charges which can be characterized as turnover taxes. The Portuguese court is seeking the information which will enable it to analyse the characteristics of a national charge in order to determine whether it is lawful.

I — Facts and national proceedings

2The dispute before the national court arises from payment of a charge introduced, in the form of a stamp duty, by Article 91 of the 'Tabela Geral do Imposto do Selo' (General Scale of Stamp Duties, hereinafter the 'TGIS').

3On 4 June 1992, Solisnor-Estaleiros Navais SA (hereinafter 'Solisnor') paid this

* Original language: French.

duty in the amount of ESC 43 586 400 in respect of a works contract concluded on 28 December 1989 with Sociedade Portuguesa de Navios e Tanques SA (hereinafter 'Soponata') concerning construction of an oil tanker for transporting crude oil.

4Solisnor subsequently requested, and obtained, annulment of the payment of that charge pursuant to a judgment delivered on 21 March 1994 by the Tribunal Tributario de Primeira Instância (Fiscal Court of First Instance), Setúbal. The Fazenda Pública (Public Treasury) appealed that judgment to the Supremo Tribunal Administrativo.

5Before that court, the Fazenda Pública argues that the stamp duty is not a turnover tax and is therefore not contrary to Article 33 of the Sixth Directive.

6For its part, Solisnor argues that, in the light of its characteristics as a general tax on consumption and one proportional to the price of the services, the stamp duty is a turnover tax, within the meaning of Article 33, and that this renders it incompatible with the common system of VAT.

II — The stamp duty under Article 91 of the TGIS

7According to the national court, that duty is applicable generally to 'all the documents, books, papers, acts and products specified in the TGIS' and, more specifically, to 'works contracts and contracts for the supply of materials or any kind of consumer article ...'. The amount of the stamp duty is calculated on the basis of a rate, varying according to the subject-matter of the contract, applied to the value of the act.

8Article 91 of the TGIS was repealed by Article 3 of Decree-Law No 223/91 of 18 June 1991, the preamble to which justified the removal of the articles relating to works contracts, including Article 91, on the ground of their 'incompatibility with the general tax on consumption covered by value added tax'.

9The Supremo Tribunal Administrativo points out that on 28 December 1989, the date of the taxable event, Article 91 of the TGIS was still in force, even though the Portuguese State had been required, since 1 January 1989, to adopt the measures necessary to comply with the Sixth Directive.

10The Supremo Tribunal Administrativo has accordingly considered it appropriate to refer the following question to the Court for a preliminary ruling:

'Is the stamp duty having the characteristics mentioned above to be regarded as a turnover tax in the terms of Article 33 of the abovementioned Sixth Directive, subject to a possible derogation under Article 378 of the Act annexed to the Treaty of Accession or any other provision of Community law?'

11Article 378 of the Act of Accession of the Portuguese Republic refers to Annex XXXII, which sets out a list of measures applicable to the Portuguese Republic, including the Sixth Directive, and defines the conditions under which they are to apply. In the case of the Sixth Directive, Annex XXXII refers to the option which the Portuguese Republic is recognized as having, under certain conditions, to grant tax exemptions and to exempt a range of transactions. Article 378 and Annex XXXII cannot therefore, in view of their subject-matter, assist in the definition, for legal purposes, of the Portuguese stamp duty.

12The Court has, in its case-law, demarcated the scope of Article 33 of the Sixth Directive, setting out criteria which enable the concept of turnover tax to be defined. It is appropriate to review those criteria in order to determine the precise nature of the stamp duty here in issue.

Ill — The concept of turnover tax within

the meaning of Article 33 of the Sixth Directive

13Article 33 of the Sixth Directive provides as follows:

'Without prejudice to other Community provisions, the provisions of this Directive shall not prevent a Member State from maintaining or introducing taxes on insurance contracts, taxes on betting and gambling, excise duties, stamp duties and, more generally, any taxes, duties or charges which cannot be characterized as turnover taxes.'

14The Court has, in its case-law, consis-tendy taken the view that this provision '... does not preclude the maintenance or introduction of stamp duties or other kinds of taxes, duties or charges which do not have the essential characteristics of VAT'. Member States are even entided to charge VAT concurrently with taxes, duties or charges other than turnover taxes.

15The reason for the prohibition on charging VAT concurrently with charges that can be characterized as turnover taxes lies in the existence of a harmonized system in the form of a common system of charges on added value.

16The First VAT Directive (hereinafter the 'First Directive') sets out the basic principles of this system. It states that the objective pursued is to '... achieve such harmonization of legislation concerning turnover taxes as will eliminate, as far as possible, factors which may distort conditions of compe n tition ...'. Within the logic of that text, harmonization supposes '... the abolition of cumulative multi-stage taxes' in force in some Community States, the main characteristic of which is to tax, for each transaction, the total price, without any possibility of deducting tax paid at the preceding stage. Such a charge is in no way neutral in regard to the process of production and distribution since, by a mechanical effect, it favours integrated economic circuits and increases the price of goods and services in proportion to the level of the value created during the first stages of their production.

17The Second VAT Directive (hereinafter the 'Second Directive') implements this system based on a Community definition of VAT, thereby replacing national systems. Except within the special area of VAT, the fiscal competence of the Member States is preserved.

18Article 33 of the Sixth Directive guarantees the consistency and durability of the common system by authorizing only taxes other than those meeting the criteria of turnover taxes. The wording, however, does not specify what is to be understood by charges which can be 'characterized as turnover taxes'.

19The Court interpreted this concept in its judgment in Rousseau Wilmot:

'In leaving the Member States free to maintain or introduce certain indirect taxes such as excise duties on the condition that they are not taxes which can be "characterized as turnover taxes", Article 33 of the Sixth Directive seeks to prevent the functioning of the common system of value added tax from being compromised by fiscal measures of a Member State levied on the movement of goods and services and charged on commercial transactions in a way comparable to value added tax.'

20The Court has added that 'taxes, duties and charges must ... be regarded as being imposed on the movement of goods and services in a way comparable to VAT if they I5 exhibit the essential characteristics of VAT'.

21The first, second and third paragraphs of Article 2 of the First Directive define VAT and are worded as follows:

'The principle of the common system of value added tax involves the application to goods and services of a general tax on consumption exactly proportional to the price of the goods and services, whatever the number of transactions which take place in the production and distribution process before the stage at which tax is charged.

On each transaction, value added tax, calculated on the price of the goods or services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of value added tax borne directly by the various cost components.

The common system of value added tax shall be applied up to and including the retail trade stage.'

22The Court has, in its case-law, derived from this definition the essential characteristics of VAT. It has stated that 'VAT applies generally to transactions relating to goods or services; it is proportional to the price of those goods or services; it is charged at each stage of the production and distribution process; and finally it is imposed on the added value of goods and services, since the tax payable on a transaction is calculated after deducting the tax paid on the previous transaction'.

23It is for that reason necessary to examine whether each of those elements features in a tax such 'as described in Article 91 of the ,7 TGIS', which would, in that case, come under the prohibition in Article 33.

IV — The legal nature of the stamp duty under Article 91 of the TGIS

24The Portuguese Government and the Fazenda Pública, which declares that it supports in full the written observations submitted by the former, argue that the stamp duty 'is imposed on the act or contract, and not on the goods which are the subject-matter thereof' and that 'even if the contract is ineffective, invalid or is not implemented, the stamp duty ... remains due'. From this they infer that 'the charge is not imposed on the transaction, and therefore one cannot logically argue that the charge in question is a turnover tax'.

25The fact that the stamp duty is imposed on the contract and not on the transaction does not, in my view, suffice to allow classification as a turnover tax to be discounted. The written conditions of a contract constitute rules which the contracting parties have defined with a view to being bound by them. By making the value specified in the contract the basis for the charge, the national law thus refers to the price, which, in most cases, will be the actual price of the transaction underlying the charge.

26It therefore strikes me as excessive to plead the risks of nullity or non-performance of the contracts, which are low in proportion to the number of contracts that are lawful and properly performed, for the purpose of arguing that there is a discrepancy between the act and the transaction which it organizes. I accordingly take the view that, in taxing a contract, the stamp duty is levied on a transaction in a manner comparable to a tax that is applied directly to the economic transaction itself.

27A charge such as the stamp duty under Article 91 could be classified as a turnover tax, in the widest possible meaning of the term, since the taxable amount on which it is based consists in the value of the contract, which, in principle, represents the trader's turnover. This may be so a fortiori since the criterion of proportionality is not disputed, given that the stamp duty is quantified by application of a percentage to a taxable amount. To resume the line of reasoning set out in the previous point, the proportionality of the charge to the price of the goods or services would be upset only if discrepancies that were frequent and of unequal value in relation to the price contractually defined resulted in that price bearing no relationship to the actual contract ultimately performed.

28These factors, however, do not suffice. The criteria derived from the Court's case-law place a narrower meaning on the concept of turnover tax.

29The Portuguese Government and the Fazenda Pública argue that the condition that the charge be general in character is not satisfied. In their view, the basis of assessment for the stamp duty is not the totality of the economic activity, but only a determined and specific supply of services. The Commission takes an identical view. The contested charge affects essentially the formation of certain acts. Moreover, even when it affects goods and services, the stamp duty is not imposed on these in their totality, but is levied only on certain very clearly defined categories, such as works contracts.

30Solisnor, in contrast, contends that the stamp duty is not a specific charge levied on only one category of persons but is in fact a general tax since it applies to all legal persons concluding works contracts.

31The Court has ruled that a '... duty [which] is not ... intended to apply to all economic transactions in the Member State concerned' is not a general tax.

32There is in the present case no doubt that a tax such as that described by the national court is not general. While it applies to a large number of measures — which, moreover, it would be more accurate to describe as 'aids' given the size of the list in the Law — the stamp duty does not, however, relate to all economic transactions in the Member State concerned. The text of Article 1 of the stamp duty regulation refers to 'documents, books, papers, acts and products specified in the TGIS', which reveals the limiting nature of the charge in its widest definition. A fortiori, the Article 91 stamp duty, which is applicable to 'works contracts and contracts for the supply of materials or any kind of consumer article', cannot be regarded as being general in character, given the strict limitation on the subject-matter of the acts on which the duty can be levied.

33The feature of being general in character, which the Court has laid down in its case-law, is thus absent in this case. It is next necessary to examine whether the stamp duty is levied at each stage in the production and distribution process.

34The contract in question relates to the construction by Solisnor of an oil tanker ordered by Soponata. In order to satisfy the condition just mentioned, each stage in the construction of the oil tanker, from the purchase of the raw materials to delivery of the vessel, ought to give rise to payment of the charge.

35As appears from reading the text, and as the Commission indicates, the stamp duty seems to be applied only to part of the production process. In order to determine whether Article 91 is sound in law, the national court will, in my view, have to examine whether each of phases contributing to the construction of the vessel can fal] within the category of 'works contracts and contracts for the supply of materials or any kind of consumer article', in the words ol Article 91. The national court must, in particular, examine whether the supplies of services effected in the context of contractual relations concluded between the trader and other professionals were subject to imposition of the stamp duty.

36In order for a charge to be justifiably described as a turnover tax, it is further necessary, according to the Court's case-law, to demonstrate that the tax applied during previous transactions is deductible from the duty finally paid by the trader.

37However, I do not think that the deductibility of input tax should constitute a mandatory condition governing classification as a turnover tax.

38In any event, the criteria already examined are in this case sufficient to dispel any such classification of the disputed stamp duty.

39More generally, it seems to me that, by making classification as a turnover tax subject to the requirement of a system of deduction, the objectives pursued by the common system of VAT, or at least some of them, risk being overlooked.

40Under the terms of the First Directive, the harmonization of legislation concerning turnover taxes 'must result in the abolition of cumulative multi-stage taxes and in the adoption by all Member States of a common system of value added tax'. To that end, Article 1 provides that 'Member States shall replace their present system of turnover taxes by the common system of value added tax ...'.

41As.I have already pointed out, Article 33 of the Sixth Directive seeks to preserve the integrity of the common system of VAT. Its principal function is to guarantee the Community system against the introduction or maintenance of charges on turnover which, in the manner of cumulative multi stage taxes, are liable to distort conditions of competition.

42If input tax is not deductible, this results in the charge having a cumulative effect, such that an interpretation under which Article 33 prohibits only deductible taxes would ultimately amount to authorizing reimposition of precisely the type of charges which the abovementioned directives set themselves the task of eliminating.

43It is for that reason that I propose that the Court should not make its assessment dependent on the existence of this factor within the legal system governing the Portuguese tax, and that it should thus take the view that the deductibility of a charge does not have any bearing on its nature as a turnover tax for the purposes of Article 33.

44That nature will remain defined by its general character, its proportionality and — an essential condition in view of the position which it occupies in the definition of cumulative multi-stage taxes — by the levying of the duty at each stage in the production and distribution process.

45Turnover taxes having these characteristics alone are, in my view, among those which are most liable to jeopardize the functioning of the common system of VAT in so far as, whether deductible or not, they distort conditions of competition and adversely affect harmonization.

46In the event that deductibility is possible, 'the continued existence of national taxes essentially identical to value added tax would entail the application of a distinct rate in addition to the common rates, thereby enabling the harmonized system to be circumvented'. Likewise, the 'possible differ-ence[s] between the systems governing ... two taxes ... which, however, exhibit the same characteristics ... demonstrate that the overlap between value added tax and similar national taxes has a far from negligible effect on the uniform functioning of the common system'.

47Charges which, in addition to the above-36 mentioned characteristics, do not offer a possibility to deduct input tax upset, in the same way, the fiscal harmonization which has been pursued since the First Directive. They adversely affect the principle of neutrality laid down by the common system and brought into effect by the abolition of national cumulative multi-stage taxes.

48However, in the event that the Court the interveners argues that the Article 91 should take the view that the deductibility of stamp duty is deductible.

a charge must remain a determinant factor for the purpose of its legal classification, it should be noted that the Portuguese tax does not have this characteristic. Article 91 of the TGIS makes no reference to it. As the Com 49. It follows that the Article 91 stamp duty mission points out, the stamp duty is levied does not satisfy the conditions which would on the gross amount of the contract price make it a turnover tax and thus incompatible and not on the fraction of the price repre with the common system of VAT; accord senting the value added relative to the expen ingly, in my view, Article 33 of the Sixth diture which the trader has incurred in Directive does not preclude a charge of this respect of input tax. Furthermore, none of nature.

Conclusion

In the light of these considerations, I propose that the Court reply as follows to the question submitted:

Article 33 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — C o m m on system of value added tax: uniform basis of assessment, must be construed as not precluding the introduction or maintenance of a national charge having the characteristics of the stamp duty imposed by Article 91 of the 'Tabela Geral do Imposto do Selo'.

Notes

(1) Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member Sutes relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1).

(2) Page 2 of the French translation of the decision referring the case.

(3) Ibid.

(4) Article 1 of the stamp duty regulation, approved by Decree-Law No 1270D of 20 November 1926.

(5) Article 91 of the TGIS.

(6) Cited by the national court, p. 4 of the French translation of the decision referring the case.

(7) Ibid. The date of 1 January 1989 was laid down in Annex XXXVI drawing up the list provided for in Article 395 of the Act of Accession of the Portuguese Republic to the European Community (Acts concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic to the European Communities, OJ 1985 L 302, p. 397).

(8) Sec, recently, Case C-208/91 Bcaulande v Directeur des Services Fiscaux, Nantes [1992] ECR 1-6709, paragraph 13.

(9) Case 73/85 Kerrutt v Finanzamt Mönchengladbach-Mitte [1986] ECR 2219, paragraph 22, and Joined Cases 93/88 and 94/88 Wisselink and Others v Staatssecretaris van Financien [1989] ECR 2671, paragraph 14.

(10) First Council Directive 67/227/EEC of 11 April 1967 on the harmonization of legislation of Member States concerning turnover taxes (OJ, English Special Edition 1967, p. 14).

(11) Third recital in the preamble. O P I N I ON OF MR LÉGER — CASE C-130/96

(12) Fourth recital in the preamble.

(13) Second Council Directive 67/228/EEC of 11 April 1967 on the harmonization of legislation of Member Sutes concerning turnover taxes — Structure and procedures for application of the common system of value added tax (OJ, English Special Edition 1967, p. 16).

(14) Case 295/84 Rousseau Wilmot v Organic [1985] ECR 3759, paragraph 16, and, more recently, Case C-347/90 Bozzi v Cassa Nazionale di Previdenza ed Assistenza a favore degli Avvocati e dei Procuratori Legali [1992] ECR 1-2947, paragraph 9, emphasis added.

(15) Casc C-200/90 Dansk Denkavit and Poulsen Trading v Skatteministeriet [1992] ECR 1-2217, paragraph 11, emphasis added.

(16) Dansk Denkavit and Poulsen Trading, cited above, paragraph 11. See also Case 252/86 Bergandi v Directeur Général des Impôts [1988] ECR 1343, paragraph 15, Wisselink and Others, cited above, paragraph 18, Case C-109/90 Giant v Gemeente Overiįse [1991] ECR 1-1385, paragraphs U and 12, Bozzi, cited above, paragraph 12, and Beaulande, cited above, paragraph 14.

(17) Page 4 of the French translation of the decision referring the case.

(18) Point 1 of its written observations.

(19) Page 10 of the French translation of the Portuguese Government's written observations. See also points 2.1 to 2.5 of the written observations of the Fazenda Pública.

(20) The rate in this case is 6.

(21) Point 18 of the Portuguese Government's written observations. FAZENDA PÚBLICA v SOLISNOR ESTALEIROS NAVAIS

(2) S

(22) Point 12 of its written observations.

(23) Page 14 of the French translation of its written observations.

(24) BeauUnde, cited above, paragraph 16.

(25) Point 7 of the present Opinion.

(2) b

(26) Emphasis added.

(27) Point 12 of its written observations. O P I N I ON OF MR LÉGER — CASE C-130/96

(28) Fourth recital in the preamble. Point 16 of the present Opinion. See also the Opinion of Advocate General Mischo in Wisselink and Others, cited above, points 19 to 21.

(29) Point 18 of the present Opinion.

(30) Point 16 of the present Opinion.

(31) Sec, in particular, D. Berlin, 'Droit communautaire et fis calité. Harmonisation des fiscalités', Troué de droit européen, in Juris-CUiseur 'Europe', 1996, vol. 4, fascicule 1630, paragraph 10 et seq.; P. Farmer and R. Lyal, EC Tax Law,

(199) 4, p. 132 et seq.

(32) Point 16 of the present Opinion.

(33) I would point out that the sense of the Court's judgments interpreting Article 33 would not have been different in the absence of a criterion relating to deductibility. Thus, this situation would not have altered the classification of a tax such as the fiscal contribution described in Dansk Denkavit and Pouhen Trading, cited above, since the other conditions permitting it to be classified as a turnover tax were satisfied. Likewise, if this criterion had not been required, that would not have altered the content of the judgments holding that certain taxes were not turnover taxes, in so far as all those decisions, in so far as I am aware, were based on the finding that at least one condition other than that relating to deductibility had not been satisfied.

(34) Opinion of Advocate General Tesauro in Dansk Denkavit and Poulsen Trading, cited above, point 8.

(35) Ibid.

(36) Point 44 of the present Opinion.

(37) Point 16 of the present Opinion.

(38) Point 12 of the French translation of the written observations.