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Document 62009CC0402

Opinion of Advocate General Sharpston delivered on 27 January 2011.
Ioan Tatu v Statul român prin Ministerul Finanţelor şi Economiei and Others.
Reference for a preliminary ruling: Tribunalul Sibiu - Romania.
Internal taxation - Article 110 TFEU - Pollution tax charged on first registration of motor vehicles - Neutrality of tax between imported second-hand motor vehicles and similar vehicles already on the domestic market.
Case C-402/09.

European Court Reports 2011 I-02711

ECLI identifier: ECLI:EU:C:2011:32

OPINION OF ADVOCATE GENERAL

SHARPSTON

delivered on 27 January 2011 (1)

Case C‑402/09

Ioan Tatu

v

Statul român prin Ministerul Finanţelor şi Economiei,

Direcţia Generală a Finanţelor Publice Sibiu,

Administraţia Finanţelor Publice Sibiu,

Administraţia Fondului pentru Mediu

and

Ministerul Mediului

(Reference for a preliminary ruling from the Tribunalul Sibiu, Secţia Comercială şi de contencios administrative (Romania))

(Free movement of goods – Pollution tax imposed on the first registration of imported second-hand vehicles – Compatibility with Article 110 TFEU)





1.        By this reference for a preliminary ruling, the Tribunalul Sibiu, Secţia Comercială şi de contencios administrative (Regional Court, Sibiu, Chamber for Commercial and Administrative Proceedings) (Romania), asks the Court to provide guidance on the compatibility with Article 110 TFEU (formerly Article 90 EC) (2) of a tax (described as a pollution tax) on imported second-hand motor cars.

 European Union legislation

2.        Article 110 TFEU provides:

‘No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.’

 Emissions standards

3.        European emissions standards lay down the acceptable limits for exhaust emissions of new motor vehicles sold in the Member States. As regards light duty vehicles under 3.5 tonnes, the first such standard (commonly known as Euro 1) was introduced by Directive 91/441, (3) which came into force on 1 January 1992. Since then, the rules have been tightened progressively, with a view to improving air quality in the European Union.

 National legislation

4.        Article 3 of the Ordonanţă de Urgenţă a Guvernului (‘OUG’) No 50/2008 introduced a tax (termed a ‘pollution tax’) for motor vehicles in categories M1 to M3 and N1 to N3. (4)

5.        By virtue of Article 4(a) of OUG No 50/2008, the tax was payable on the first registration of a motor vehicle in Romania, with the legislation making no distinction between motor vehicles manufactured in Romania and those manufactured abroad, or between new and second-hand vehicles.

6.        Article 6(1) of OUG No 50/2008 laid down the manner in which the tax was to be calculated. It provided:

‘1. The amount of the tax shall be assessed on the basis of the factors laid down in Annexes 1 to 4 and shall be calculated as follows:

(a) for motor vehicles in category M1 and satisfying emissions standard Euro 3, Euro 4, Euro 5 or Euro 6:

1. For motor vehicles satisfying emissions standard Euro 4 or Euro 3, the tax shall be calculated on the basis of the vehicle’s emissions of carbon dioxide (CO2), and the specific tax expressed in euro per gramme of CO2, referred to in Annex 1, together with the pollution class and the specific tax expressed in euro per cubic centimetre referred to in Annex 2, less any reduction as shown in column 2 of Annex 4, in accordance with the following formula:

Amount payable = [(A x B x 30/100) + (C x D x 70/100)] x (100 - E)/100,

where:

A = combined CO2 emissions, expressed in grammes/km;

B = the specific tax, expressed in euro per gramme of CO2, referred to in column 3 of Annex 1;

C = engine size (cubic capacity);

D = the specific tax on engine size referred to in column 3 of Annex 2;

E = the percentage reduction of the tax specified in column 2 of Annex 4;

2. For motor vehicles satisfying emissions standard Euro 5 or Euro 6, the tax shall be calculated on the basis of the formula set out in point 1, at the time of the entry into force of the rules for the application of Council Regulation (EC) No 715/2007 on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information;

(b) for motor vehicles within category M1 and which either do not fall within a specified European pollution class or fall within pollution classes Euro 1 or Euro 2, in accordance with the following formula:

Amount payable =       C x D x (100 - E)/100

where:

C = engine size (cubic capacity);

D = the specific tax on engine size referred to in column 3 of Annex 2;

E = the percentage reduction of the tax specified in column 2 of Annex 4;

…’

7.        Article 6(3) of OUG No 50/2008 concerned the vehicle’s depreciation. It stated:

‘The percentage reduction referred to in Annex 4 has been fixed by reference to the age of the vehicle, its average annual mileage, its mechanical condition and its equipment. On calculation of the tax, a further reduction of the sum fixed shall be granted where the factors on the basis of which the fixed amount was assessed vary from the standard, in accordance with conditions to be laid down in regulations for the implementation of this emergency order.’

8.        Article 10 of OUG No 50/2008 allowed a challenge to be brought by a person who sought to claim that the value of the vehicle had depreciated by a percentage which was greater than that indicated by the scale laid down in column 2 of Annex 4. In summary, a valuation of the vehicle would then be carried out by an independent expert, whose fee was to be set according to a standard tariff. On presentation of the expert’s report by the taxpayer, the national authorities would then proceed to re-calculate the tax. If dissatisfied with the result, the taxpayer could bring an action before the courts having jurisdiction in the matter.

9.        Article 14 of OUG No 50/2008 provided for the order to come into force on 1 July 2008. The tax was payable only in relation to motor vehicles registered in Romania for the first time after that date. It did not apply to vehicles previously registered and already in circulation.

10.      The scale set out in Annex 4 was a fixed scale. It contained two columns, the first referring to the age of the vehicle and the second laying down a percentage reduction for each age bracket. For a car that was less than a month old, the reduction to be applied was 3 percent. The maximum reduction, applicable to a car that was over 15 years old, was 95 percent.

11.      The regulations referred to in Article 6(3) of OUG No 50/2008 were set out in the Norma Metodologica de aplicare a Ordonanţei de urgenţă a Guvernului nr. 50/2008 pentru instituirea taxei pe poluare pentru autovehicule (Regulations for the application of OUG No 50/2008) (‘the Regulations’) of 24 June 2008, published in the Monitorul Oficial (Official Journal) on 30 June 2008. Chapter IV of the Regulations (entitled ‘calculation of the tax’) contained provisions amplifying the basis on which the percentage reduction provided for in column 2 of Annex 4 to OUG No 50/2008 was calculated. In particular, it set out the assumptions as to annual mileage, condition and equipment on which the scale was based. No account was taken of the make or model of the car or of the method of propulsion. Chapter V (entitled ‘determination of the actual depreciation of a second-hand vehicle’) covered the situation where the person paying the tax sought to argue that the value of the vehicle had depreciated by more than the percentage specified in column 2 of Annex 4.

12.      OUG No 50/2008 was amended by OUG nr. 208/2008 pentru stabilirea unor măsuri privind taxa pe poluare pentru autovehicule (OUG No 208/2008, implementing certain measures concerning the pollution tax for motor vehicles). Under that order, vehicles having an engine size not exceeding 2000 cc, registered for the first time in Romania or in other Member States of the European Union from 15 December 2008, were exempted from the obligation to pay the pollution tax for motor vehicles provided for under OUG No 50/2008. Those provisions were to remain in force until 31 December 2009.

13.      OUG No 208/2008 was repealed by OUG nr. 218/2008 privind modificarea Ordonanţei de urgenţă a Guvernului nr. 50/2008 pentru instituirea taxei pe poluare pentru autovehicule (OUG No 218/2008 amending OUG No 50/2008 introducing a pollution tax for motor vehicles), which once again amended OUG No 50/2008. That order provided, inter alia, for certain further exemptions in respect of certain categories of motor vehicle registered for the first time (whether in Romania or in other Member States) between 15 December 2008 and 31 December 2009. 

 The main proceedings and the question referred for a preliminary ruling

14.      Mr Tatu, the applicant in the main proceedings, acquired a second-hand Mercedes Benz motor car in Germany in July 2008. The car was manufactured in 1997. It fell within category M1, had an engine size of 2155 cc and satisfied the Euro 2 emissions standard. The purchase price was EUR 6 600.

15.      In accordance with OUG No 50/2008, Mr Tatu paid the pollution tax claimed to the Romanian authorities on 27 October 2008. Mr Tatu’s written observations state that the tax amounted to RON 7 595 (approximately EUR 2 054).

16.      As he considered that the tax in question was contrary to, inter alia, Article 90 EC (now Article 110 TFEU), Mr Tatu brought proceedings before the Tribunalul Sibiu, seeking an order for repayment of the amount of the tax paid. In particular, he argues that the tax at issue discriminates against used vehicles imported from other Member States, since, in the case of imported vehicles, the tax will be charged in full on first registration in Romania, whereas, for those that were registered in Romania prior to the introduction of the tax, the charge to the tax will, effectively, be nil.

17.      The Tribunalul Sibiu decided to refer the following question to the Court of Justice for a preliminary ruling:

‘Are the provisions of OUG No 50/2008, as subsequently amended, contrary to the provisions of [Article 110 TFEU], and do they constitute a measure which is manifestly discriminatory?’

18.      Written observations have been submitted by Mr Tatu, the Czech and Romanian Governments and by the European Commission. At the hearing, Mr Tatu, the Romanian Government and the Commission were represented and made oral submissions.

 Preliminary remarks

 The proper Treaty basis

19.      Although the question referred relates only to what is now Article 110 TFEU, the referring court’s order also notes observations made by Mr Tatu in the main proceedings relating to other Treaty articles, namely Articles 30 TFEU and 34 TFEU (formerly Articles 25 EC and 28 EC). For the sake of good order, I shall address those articles briefly in the context of their applicability to the dispute in the main proceedings.

20.      It is plain that the tax at issue is not a customs duty in the strict sense. However, where a pecuniary charge (whatever its designation and mode of application) is imposed unilaterally on goods by reason of the fact that they cross a frontier, such a charge will constitute a charge having equivalent effect for the purposes of Articles 28 TFEU and 30 TFEU (formerly Articles 23 EC and 25 EC). (5)

21.      However, a tax such as the tax at issue is not levied by reason of the vehicle crossing the frontier of the Member State imposing the tax but upon first registration of the vehicle in the territory of that State for the purpose of being placed in circulation.

22.      It follows that the tax comes under the general system of internal taxation on goods and must be examined in the light of Article 110 TFEU. (6)

23.      As regards Article 30 TFEU, it is settled case-law that the scope of that article does not extend to obstacles to trade covered by other specific provisions. (7) Given that Article 110 TFEU will apply to the tax at issue, Article 30 TFEU can have no application in this case.

 The formulation of the question referred for a preliminary ruling

24.      As worded, the question referred by the referring court seeks a ruling from the Court of Justice concerning the interpretation of national law, in the form of the provisions of OUG No 50/2008. It is settled case-law that this Court does not have jurisdiction to rule on the compatibility of provisions of national law with Community law in proceedings brought under Article 267 TFEU. The interpretation of national rules is a matter for the national courts alone. (8) It is, however, open to the Court of Justice to supply the national court with all the guidance as to the interpretation of European Union (EU) law necessary to enable that court to rule on the compatibility of the national rules with the provisions of EU law. (9) To that end, it may be necessary to reformulate the question referred. (10)

25.      At the same time, it is apparent from the order for reference that the national legislation that is relevant to the case in the main proceedings is OUG No 50/2008 in its original form, and not in its amended version. It follows that, in considering the issues raised by the order for reference, it is the unamended version of the legislation that the Court should have regard to, and not subsequent versions of it. It follows that the words ‘as subsequently amended’ in the question referred for a preliminary ruling should be disregarded.

26.      Although the question referred for a preliminary ruling uses the expression ‘manifestly discriminatory’, in none of its case-law relating to Article 110 TFEU has the Court held that it is necessary that discrimination be ‘manifest’ in order for that article to be contravened. The test is simply whether discrimination exists. The word ‘manifestly’ should accordingly also be disregarded in answering the question referred.

27.      I would add that there is nothing in the order for reference which indicates that taxation of second-hand motor cars acquired in a Member State other than Romania affords indirect protection to products other than motor vehicles. It is only where there is internal taxation which affords that type of protection that the second paragraph of Article 110 TFEU will apply. (11) That being so, it is clear that it is the first paragraph of that article which is relevant to the case before the referring court.

28.      It thus appears that the referring court is asking whether the first paragraph of Article 110 TFEU precludes national legislation which introduces a new tax, which is imposed on the first registration of second-hand motor vehicles from another Member State, where equivalent vehicles already on the national market before the introduction of the tax do not bear the tax.

29.      I shall address the question on that basis.

 Analysis

 The scope of application of Article 110 TFEU

30.      Article 110 TFEU is designed to guarantee the free movement of goods between Member States in normal conditions of competition, prohibiting any form of protection which may result from the application to goods originating in other Member States of internal taxes of a discriminatory nature. (12) The Court has held that the article must be interpreted widely so as to cover all taxation procedures which directly or indirectly conflict with the principle of equality of treatment between domestic products and imported products. It follows that the prohibition contained in the article must be applied whenever a fiscal levy is likely to discourage imports of goods originating in other Member States to the benefit of domestic production or goods available on the domestic market. (13)

31.      It is well established in the Court’s case-law that Article 110 TFEU has direct effect. (14)

32.      It is not the aim of Article 110 TFEU to impose any particular system of internal taxation on the Member States, which retain a considerable degree of freedom and autonomy as regards the levelling of taxes and duties and the rates charged. What Article 110 TFEU does is to prohibit internal taxation which discriminates, directly or indirectly, against imported products and in favour of domestic products.

33.      The provision is necessary, not because it seeks in any way to harmonise the internal taxation systems of the Member States, but because, without it, the provisions of Articles 28 to 30 TFEU would be rendered meaningless. Were each Member State free to impose discriminatory taxation on imported products once they were within its territory, the rules prohibiting duties imposed as a result of those products crossing an internal border could be easily overridden.

 The Court’s case-law concerning imported second-hand motor vehicles

34.      It is abundantly clear from the Court’s case-law that the rules against discrimination laid down in Article 110 TFEU are capable of applying to imported second-hand motor cars in a Member State, where the result of the imposition of the tax concerned is to render the importation of such vehicles less attractive than acquiring a domestic product. Equally, it is plain that not every internal tax or duty which has the effect of increasing the cost of imported second-hand cars will infringe that article.

35.      In my Opinion in Nádasdi, (15) I reviewed the Court’s case-law dating from Commission v Denmark (16) in 1990 to Weigel (17) in 2004. I refer to that Opinion for the sake of brevity and shall not repeat that analysis here. Since Weigel, the Court has delivered four further judgments in cases involving imported second-hand cars. (18) These confirmed the previous case-law and developed it to some extent.

36.      I draw the following conclusions from the Court’s case-law in relation to the issues which arise in the main proceedings.

37.      First, there is no rule of EU law which prevents Member States from introducing a general system of internal taxes charged in accordance with objective criteria on a particular category of goods, such as motor vehicles. (19) However, where a Member State imposes a tax on imported second-hand motor cars, Article 110 TFEU will mean that the tax regime in question must not discriminate against those vehicles by favouring, directly or indirectly, vehicles from that Member State. (20) That is the overriding principle, from which all other considerations flow. (21)

38.      Second, where the tax concerned is discriminatory in nature, the fact that the purpose of and reason for the tax may be environmental in nature or seek to reduce pollution has no bearing on any finding of infringement. Measures to improve environmental conditions are, of course, to be encouraged. But they must not be enacted in a way which gives rise to discrimination against imported products. (22)

39.      Third, in determining whether a tax on imported second-hand motor cars is discriminatory, it is necessary to have regard, not only to the rate of the tax, but also to the basis of assessment and the detailed rules for levying the tax. (23) Where consideration of those factors leads to the conclusion that the tax imposed on imported vehicles is higher than the tax charged on equivalent domestic vehicles, the tax in question will be discriminatory and thus will contravene Article 110 TFEU. (24)

40.      Fourth, where there is a single charge to tax, based on first registration, it is also necessary, in assessing discrimination, to have regard to the residue of the tax incorporated in the value of second-hand vehicles on the domestic market which have already borne the tax. The residual value of that tax will diminish proportionately with the vehicle’s depreciation. It follows that the tax charged on equivalent imported motor cars must take actual depreciation into account. (25)

41.      Fifth, in determining the value of the imported second-hand vehicle for the purposes of the tax, it is not the price paid for the car by the importer or its value in the exporting State that will be relevant. Rather, it is the value of the car in the State of importation that must be taken into account, since only on that basis can it be said that there will be no discrimination as between imported second-hand vehicles and similar vehicles on the domestic market. (26) It is for this reason that the question of any tax paid in the exporting State is irrelevant. The residual value of such a tax will no longer be incorporated in the value of the vehicle on its arrival in the State of importation.

42.      Sixth, in assessing that depreciation, it is not necessary for there to be an assessment or expert examination of every imported vehicle covered by the tax. The administrative burden on the competent authorities of the Member States, if they had to do that, would be considerable. It is therefore open to those authorities to apply fixed scales, based on criteria such as age, mileage, general condition, method of propulsion and make or model (27) in order to establish a value for second-hand models – a value which, as a general rule, will be very close to their actual value. Those criteria are not exhaustive. (28) There may be other methods which achieve an adequate result. (29) Such a system would, however, have to be arranged, making allowance for the reasonable approximations inherent in any system of that type, so as to exclude any discriminatory effect. (30)

43.      Seventh, the requirement that the system be arranged so as to exclude any discriminatory effect means that the criteria on which the method of depreciation is based must be made known to the public and that the owner of a second-hand vehicle imported from another Member State must be able to challenge the application of a flat-rate method of calculation to that vehicle. (31) It is open to the national authorities to charge a fee for the use of the relevant complaints procedure, provided that that fee is not set at a level which operates as a disincentive to lodging a compliant. (32)

44.      Lastly, where the tax at issue is a new one, the fact that there may already be vehicles in circulation in the Member State levying the tax which have not been subject to it, with the result that the residual amount of that tax is not incorporated in their second-hand value, is irrelevant and does not constitute discrimination. (33)

 Application to the case in the main proceedings

45.      As regards the case in the main proceedings, it will be for the referring court to determine whether or not the provisions of OUG No 50/2008 satisfy the principles set out above.

46.      However, in order to give a useful answer to the referring court, I would make the following observations, all of which are based on, and only on, the material made available to the Court in the proceedings before it.

47.      First, the test to be applied for the purposes of Article 110 TFEU is an objective one. Does the tax in question discriminate, in fact, against imported products? Only if it does, will it contravene that provision. It follows, in my view, that arguments, such as those put forward on Mr Tatu’s behalf at the hearing (and which were not accepted by the Romanian Government) seeking to demonstrate that the underlying objective was to protect the national motor industry are not relevant.

48.      Second, Article 6(1)(b) of OUG No 50/2008 provided that the tax applying to cars in the same category as Mr Tatu’s vehicle fell to be calculated by reference to the relevant vehicle category (in that case, M1), the European exhaust emissions standard (Euro 2), the vehicle’s engine size, the number of cylinders and its age. All of these appear to me to be factors meeting the requirement as to objectivity referred to in point 37 above. (34)

49.      Third, to the extent that the challenge to the tax at issue is based on the argument that the tax is discriminatory (because second-hand vehicles imported from other Member States will bear the tax following its introduction, whereas equivalent vehicles sold on the national market that were first registered prior to the introduction of the tax will not), the claim cannot succeed for the reasons set out in point 44 above.

50.      I should add, in this context, that, at the hearing, Mr Tatu’s counsel argued that the number of new vehicle registrations in Romania was very low, with annual registrations in aggregate amounting to some 5 percent of the total number of vehicles in the country. It might thus be several years before true comparators, in the form of second-hand cars on the domestic market that had borne the tax, would become available. In the meantime, there would, one imagines, be a surfeit of equivalent second-hand cars on that market that had not borne the tax, and such cars would, for obvious reasons, be likely to be preferred by buyers to the detriment of imported vehicles.

51.      Is the principle that Member States have the power to introduce new taxes having the characteristics of the tax at issue an absolute one? May there be circumstances in which that principle must be disapplied, having regard to the practical consequences of introducing the tax? The Court has held, after all, (35) that second-hand vehicles already on the national market and those acquired in another Member State are ‘similar’ products. However, while such domestic vehicles may be similar, they cannot serve as comparators and are thus not ‘comparable’.

52.      It is clear that applying the principle may, in such circumstances, create situations which are prima facie discriminatory. Thus, I have some sympathy with the line of argument advanced on Mr Tatu’s behalf.

53.      However, I do not think that the proposal can be accepted.

54.      For it to succeed, it would be necessary either to persuade the Court that it should reconsider its case-law on the introduction of new taxes, as laid down in Nádasdi and Németh, or to establish a credible and workable basis for applying exceptions to that case-law. As regards the first of these, I can see no basis on which such a change to the case-law might be justified. The Member States continue to retain a considerable degree of autonomy in the field of taxation generally. Nothing has happened since delivery of the Court’s judgment in 2006 to alter the position.

55.      As regards the second, it would be necessary to determine parameters for the application of the exception that were both credible, in the sense of justifying the exception, and workable, in the sense that it would be clear when they applied. The former may be relatively easy to specify. It would be sufficient to establish that the imposition of the tax in question resulted in a significant discrepancy between the price of imported second-hand vehicles and similar used vehicles on the domestic market. The second would be considerably more difficult and, in my view, would be likely to prove impossible. It would be necessary to show that the tax, as introduced, gave rise to such discrepancies, not on a short-term basis (which would, if the Court’s case-law is not to be fatally undermined, be permissible), but on a long-term basis (which would not). Even more problematically, it would be necessary to demonstrate with adequate certainty that such long-term discrepancies were inherent in the taxing system at the time the tax in question was introduced.

56.      In my view, there are simply too many uncertainties for the test of workability to be satisfied. The impact a tax may have on the market for the assets it affects will frequently be hard, if not impossible, to measure with anything approaching precision. It seems to me that such a proposal would put the Member States and, indeed, the judicature, when asked to rule on what one imagines would be likely to be a multiplicity of challenges, in an impossible position.

57.      I therefore conclude, though not without some reluctance, that the rule whereby Member States are free to introduce new taxes having the characteristics of the tax at issue must be regarded as an absolute one.

58.      Fourth, Mr Tatu acquired the vehicle in the month in which the tax was introduced, that is to say July 2008, and presented it for registration in Romania shortly thereafter. (36) In such circumstances, it is possible, and may even be likely, that there will have been insufficient equivalent second-hand vehicles on the domestic market that had borne the same tax for a comparison based on actual values to be undertaken.

59.      In such a case, the national court must make a theoretical projection forwards over time, and determine whether in that light there is discriminatory taxation of second-hand vehicles from other Member States. (37)

60.      In other words, it is necessary to compare a vehicle taxed when new in Romania after the introduction of the tax and subsequently sold second-hand in Romania with a vehicle of the same age and type bought second-hand in another Member State and introduced into Romania, assuming both transactions to take place at the same (future) time. The point of comparison will be the residual amount of the tax in the value of the first vehicle, and the amount of tax imposed on the second. If the latter is higher, there will be discrimination.

61.      Fifth, the national legislation at issue in the main proceedings takes as its basis for valuing an imported second-hand motor car a fixed scale. Such a basis is, of itself, unobjectionable. (38)

62.      However, the scale in question must reflect the value of the imported vehicle and there must be an effective right of challenge. (39)

63.      As regards the first of these, the scale set out in Annex 4 to OUG No 50/2008 is based on, and only on, the age of the vehicle. However, Article 6(3) of OUG No 50/2008 states that the percentage reduction provided for in that scale was fixed in such a way as to allow not only for age but also for the average annual mileage, the mechanical condition and the equipment of the vehicles it applies to. (40) Further provisions reflecting those aspects are contained, not in OUG No 50/2008 itself, but in the Regulations. (41)

64.      Are those parameters sufficient having regard to the requirements laid down under the Court’s case-law? (42)

65.      In my opinion, they are not.

66.      The list set out in Gomes Valente (43) also includes the method of propulsion and the make or model of the vehicle among the factors to be taken into account. I have already indicated that I do not consider that list to be exhaustive. (44) It may well be possible to add other points of reference and/or to change those points of reference by replacing them with others and remain compliant with the overriding requirement that the indicators used reflect (so far as it is ever possible to do so by the use of a fixed scale) the actual value of the imported vehicle.

67.      It seems to me that without a reference to the method of propulsion and the make and/or model of the vehicle, or a satisfactory equivalent thereto, the fixed scale here cannot provide a satisfactorily close approximation of the actual value of the imported second-hand vehicle in question.

68.      Where the national legislation makes reference to a scale which does not satisfy the overriding requirement that the scale must provide a satisfactorily close approximation of the value of the imported second-hand vehicle, it seems to me that the fact that provision is made for a right of challenge will not suffice to render the legislation compliant with EU law. (45)

69.      The case-law requires there to be a right of challenge to the results produced by applying the scale. It does so because it is inherent in any such arrangement that the results it produces will be approximations of the true value. (46) A buyer who is dissatisfied with the application of the scale in his particular case must be able to initiate the procedures necessary in order to ensure that the correct outcome is achieved. But, to approach matters from the opposite end of the spectrum and to argue that, since a right of challenge exists, it does not matter that the scale is based on criteria which are only partially complete seems to me to be intrinsically misconceived.

70.      As regards the procedure for mounting a challenge to the amount fixed by the fixed scale, and, in particular, whether it allows for all relevant factors to be taken into account, this is a matter for the national court to determine.

71.      I therefore consider that national legislation introducing a new tax which is imposed on the first registration of second-hand motor vehicles introduced from another Member State does not infringe Article 110 TFEU on the sole ground that equivalent vehicles already on the national market before the introduction of the tax do not bear the tax.

72.      Such a tax is, however, prohibited by Article 110 TFEU if the amount of the tax imposed on an imported second-hand vehicle exceeds the residual amount of the tax included in the sale price of an equivalent second-hand vehicle which bore the tax when first registered as new.

73.      In order to ensure that there is no such excess charge, the amount of the tax levied on vehicles first registered as second-hand must diminish, as closely as possible, in parallel with the depreciation of the price of the vehicle as new. Any fixed scale of depreciation which is based solely on the age of the vehicle, without taking account of mileage or other factors affecting depreciation, is likely to be insufficient for that purpose.

 Final observations

74.      Although the national court does not specifically raise this question in the order for reference, I would add, in order to provide a complete answer, that, should the tax at issue be held to be discriminatory, the Court’s case-law provides that individuals are entitled to reimbursement of national charges levied in breach of EU law. (47) It is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing these matters. (48)

75.      Lastly, I would observe that, while this Opinion deals only with the proceedings brought by Mr Tatu to challenge the tax imposed on the second-hand motor car imported by him from Germany, it is impossible to be unaware of the large number of references for a preliminary ruling made by the Romanian courts involving the same question. Had the tax been levied at a lower rate, less controversy and less litigation might perhaps have arisen. In the case at issue, the tax, amounting as it would appear to do to some 30 percent of the value of the imported vehicle, has undeniably been set at a significant level. However, the rates at which national taxes are set are entirely a matter for the Member State concerned. Since Article 110 TFEU accordingly does not provide a basis for censuring the excessiveness of levels of taxation that Member States might adopt for particular products, that is not a point which can have any bearing on the conclusions set out above. (49)

 Conclusion

76.      In the light of all the above considerations, I am of the opinion that the Court should give the following answer to the question referred for a preliminary ruling by the Tribunalul Sibiu, Secţia Comercială şi de contencios administrative:

(1)      National legislation introducing a new tax which is imposed on the first registration of second-hand motor vehicles introduced from another Member State does not infringe Article 110 TFEU on the sole ground that equivalent vehicles already on the national market before the introduction of the tax do not bear the tax.

(2)      Such a tax is, however, prohibited by Article 110 TFEU if the amount of the tax imposed on an imported second-hand vehicle exceeds the residual amount of the tax included in the sale price of an equivalent second-hand vehicle which bore the tax when first registered as new.

(3)      In order to ensure that there is no such excess charge, the amount of the tax levied on vehicles first registered as second-hand must diminish, as closely as possible, in parallel with the depreciation of the price of the vehicle as new. Any fixed scale of depreciation which is based solely on the age of the vehicle, without taking account of mileage or other factors affecting depreciation, is likely to be insufficient for that purpose.


1 – Original language: English.


2 – Although the events in the main proceedings took place prior to the renumbering of the Treaty articles with the coming into force of the Treaty of Lisbon on 1 December 2009, I have used the current numbering throughout for ease of reference.


3 – The regulations are complex and I do not propose to set out a full summary here. As regards the particular vehicle at issue in the main proceedings, the Euro 2 standard was introduced with effect from 1 January 1996 by Council Directive 91/441/EEC of 26 June 1991 amending Directive 70/220/EEC on the approximation of the laws of the Member States relating to measures to be taken against air pollution by emissions from motor vehicles (OJ 1991 L 242, p. 1). Subsequent legislation has introduced new standards, the current applicable standard being known as ‘Euro 5’, with the new ‘Euro 6’ standard being due to come into force in 2014 (see Regulation (EC) No 715/2007 of the European Parliament and of the Council of 20 June 2007 on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information (OJ 2007 L 171, p. 1)). See also Regulation (EC) No 443/2009 of the European Parliament and of the Council of 23 April 2009 setting emission performance standards for new passenger cars as part of the Community’s integrated approach to reduce CO2 emissions from light-duty vehicles (OJ 2009 L 140, p. 1).


4 –       Category ‘M’ comprises ‘motor vehicles with at least four wheels designed and constructed for the carriage of passengers’. Category ‘N’ comprises ‘motor vehicles with at least four wheels designed and constructed for the carriage of goods’. See Annex II to Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (Framework Directive) (OJ 2007 L 263, p. 1). Those categories are further subdivided as regards the number of seats and maximum mass (Category M) and the maximum mass only (Category N).


5 – See, inter alia, Case C‑213/96 Outokumpu [1998] ECR I‑1777, paragraph 20.


6 – See Joined Cases C‑290/05 and C‑333/05 Nádasdi and Németh [2006] ECR I‑10115, paragraph 41.


7 – See Case C‑313/05 Brzeziński [2007] ECR I‑513, paragraph 50.


8 – See, inter alia, Case C‑130/93 Lamaire [1994] ECR I‑3215, paragraph 10, and Case C‑37/92 Vanacker and Lesage [1993] ECR I‑4947, paragraph 7.


9 – See, inter alia, Lamaire, cited in footnote 8 above, paragraph 10.


10 – See, for example, Case C‑62/00 Marks & Spencer [2002] ECR I‑6325, paragraph 32.


11 – See, inter alia, Brzeziński, cited in footnote 7 above, paragraph 30.


12 – See the Opinion of Advocate General Tizzano in Joined Cases C‑393/04 and C‑41/05 Air Liquide Industries Belgium [2006] ECR I‑5293, point 86.


13 –      See, to that effect, Case 252/86 Bergandi [1988] ECR 1343, paragraph 25.


14 – See, inter alia, Case 57/65 Lütticke [1966] ECR 205, 212, and Case C‑393/98 Gomes Valente [2001] ECR I‑1327, paragraph 33.


15 – Case C‑290/05, Opinion at [2006] ECR I‑10118. See points 4 to 22.


16 – Case C‑47/88 [1990] ECR I‑4509.


17 – Case C‑387/01 [2004] ECR I‑4981.


18 –      See Nádasdi and Németh, cited in footnote 7 above, Brzeziński, cited in footnote 8 above, Case C‑74/06 Commission v Greece [2007] ECR I‑7585 and Case C‑2/09 Kalinchev [2010] ECR I‑0000.


19 – See, inter alia, Case C‑345/93 Nunes Tadeu [1995] ECR I‑479, paragraph 11.


20 – See, to that effect, Commission v Denmark, cited in footnote 16 above, paragraph 9.


21 – This reflects the general principle laid down in the Court’s case-law regarding Article 110 TFEU, namely that ‘the aim of Article [110 TFEU] as a whole is to ensure free movement of goods between the Member States in normal conditions of competition by the elimination of all forms of protection which may result from the application of internal taxation that discriminates against products from other Member States’ (see Commission v Denmark, cited in footnote 16 above, paragraph 9).


22 – See paragraph 53 of Nádasdi and Németh, cited in footnote 6 above. See also point 66 of my Opinion in Nádasdi, cited in footnote 15 above.


23 – See, inter alia, Commission v Denmark, cited in footnote 16 above, paragraph 18.


24 – See, to that effect, Commission v Denmark, cited in footnote 16 above, paragraph 21.


25 – See, to that effect, Nunes Tadeu, cited in footnote 19 above, paragraph 12 et seq. See also point 14 of the Opinion of Advocate General Jacobs in that case, where he stated: ‘it is clear from Commission v Denmark that the tax charged on an imported used car must not exceed the residual tax incorporated in the value of a domestic used car of the same characteristics. In order to calculate the residual tax incorporated in the value of a domestic used car it is necessary to look at its market value, the assumption being that the amount of residual tax declines in direct proportion to the value of the car. Thus if the value of a new car placed on the market in Portugal in 1987 was ESC 1 000 000 including car tax of ESC 200 000, and if in 1990 the value of the car was ESC 600 000, the residual tax incorporated in that value amounts to ESC 120 000 ...’. The residual tax, seen as a part of the capital value of the vehicle concerned, remains constant as a proportion of that value after depreciation (see my Opinion in Brzeziński, cited in footnote 7 above, point 41).


26 – See, to that effect, the Opinion of Advocate General Jacobs in Nunes Tadeu, cited in footnote 19 above, point 18. In so far as that Opinion suggests that a revaluation in the State of importation may be merely optional, I would respectfully disagree, unless, of course, it could be shown that the values of second-hand vehicles in the exporting State and the State of importation are so close as to be identical for working purposes.


27 – See Gomes Valente, cited in footnote 14 above, paragraph 28. I understand the criterion established by the reference to a ‘fixed’ scale to refer to a scale of values established on the basis of a series of values which are fixed in a manner which does not vary according to individual circumstances but is to be applied consistently in all cases of the same kind.


28 – See Commission v Greece, cited in footnote 18 above, paragraph 37.


29 – See my Opinion in Brzeziński, cited in footnote 7 above, point 44.


30 – See Gomes Valente, cited in footnote 14 above, paragraphs 24 and 26.


31 – See Case C‑101/00 Tulliasiamies and Siilin [2002] ECR I‑7487, paragraphs 87 and 88.


32 – See Commission v Greece, cited in footnote 18 above, paragraph 52 et seq.


33 – See Nádasdi and Németh, cited in footnote 6 above, paragraph 49. See also point 51 and footnote 25 of my Opinion in Nádasdi, cited in footnote 15 above, where I observed that differences arising from the introduction of a new tax are unavoidable and that, given the sovereignty of the Member States in this field, the test in EU law must be whether each successive (rate of) tax is discriminatory in itself. If imported second-hand cars were to be regarded as comparable to second-hand vehicles already on the road in the Member State before the tax was introduced, it would never be possible for a Member State to introduce a tax such as the tax at issue.


34 – I am conscious that there may be an argument that to provide, in what purports to be a pollution tax, for the amount of the tax to be reduced by reason of a vehicle’s age may be difficult to reconcile with the notion that, the older the vehicle is, the more it is likely to pollute the environment. While that argument is not without force, it is hard to see how the Romanian legislature could have enacted the legislation otherwise, given the clear requirement laid down in the Court’s case-law that account be taken of a vehicle’s depreciation. The age of the vehicle will, of necessity, be a relevant factor in that context.


35 – See, for example, Brzeziński, cited in footnote 7 above, paragraph 30.


36 – The order for reference does not disclose the precise date on which the application for registration was made. According to the written observations lodged by the Romanian Government, the date in question was 27 October 2008.


37 – See my Opinion in Nádasdi, cited in footnote 15 above, point 51.


38 – See point 42 above.


39 – See point 43 above.


40 –      It is not entirely clear how this result is arrived at. I assume that what is meant is that the calculation of the percentage reduction in column 2 of Annex 4 takes account of the mechanical condition and the equipment that are usual in vehicles of the same age as the vehicle in question. It is, of course, for the referring court to construe the national legislation and to determine the proper construction of this provision.


41 – See point 11 above.


42 – See point 42 above.


43 – Cited in footnote 14 above.


44 – See point 42 above.


45 – See, to that effect, Commission v Greece, cited in footnote 18 above, paragraph 43.


46 –      See, to that effect, Tulliasiamies and Siilin, cited in footnote 31 above, paragraph 89. See also, inter alia, Commission v Greece, cited in footnote 18 above, which refers to the aim of a fixed scale as being to produce a result which ‘as a general rule, would be very close to [the vehicle’s] actual value’ (paragraph 29).


47 – See, to that effect, inter alia, Marks and Spencer, cited in footnote 10 above, paragraph 30.


48 – Ibid., paragraph 34. For further observations in this regard, see the Opinion of Advocate General Jacobs in Nunes Tadeu, cited in footnote 19 above, point 23.


49 – See, to that effect, Commission v Denmark, cited in footnote 16 above, paragraph 10.

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