C-93/88

2. In the Netherlands, a special tax, the 'Bijzondere Verbruiksbelasting van personenauto's' (special consumption tax on 3. As the Commission has rightly pointed passenger cars, hereinafter referred to as out, the special tax is not a registration tax 'the special tax') is applied, whose main since the chargeable event is the supply in characteristics are as follows: the chargeable the Netherlands by the manufacturer or the events are the supply of passenger cars in importation and not the registration of the the Netherlands by manufacturers and the car. In any event, the special tax is not importation into the Netherlands of such charged on secondhand cars resold within cars; the taxable amount is the list price, net the Netherlands. of value-added tax, applying at the time of the issue of the registration certificate; list price means the price recommended by the manufacturer or importer to his retailers for sales to the final consumer; in the case of secondhand cars, the taxable amount corre­ sponds to a certain percentage of that price. At present, the special tax amounts to 4. As for the circumstances in which a 18.2% for the part of the list price which is dispute arose between Wisselink and less than or equal to HFL 10 000 and Abemij, on the one hand, and the 27.3% for the part of the list price in excess Netherlands Secretary of State for Finance of HFL 10 000. There is a zero rate for on the other, I refer to the Report for the new cars manufactured in the Netherlands Hearing.

* Original language: French

OPINION OF MR MISCHO — JOINED CASES 93/88 AND 94/88

6. The first question submitted by the Hoge 9. In order to offset the difference between Raad, which is the same in both cases, is the fiscal burden borne by passenger cars worded as follows: before 1 January 1969 and the value-added tax rate of 12%, the Netherlands Government proposed that Parliament introduce, in a provision of the same draft law, an 'equalization' tax on supplies by the manufacturer and imports of passengers 'Do the provisions of the First, Second and cars, to be imposed alongside value-added Sixth Directives preclude the levying of a tax. As a result of certain observations made special consumption tax on passenger cars by members of Parliament who were as described in the reference for a uncertain about the compatibility of that tax preliminary ruling?' with the system of value-added tax, the

WISSELINK AND OTHERS v STAATSSECRETARIS VAN FINANCIËN

However, alongside that legislative amendment, Belgium also subjected new cars to a registration tax which was charged on the list price. The rate at which those two taxes were levied 10. In response to that argument, however, was identical and the amount paid by way it must be stated, as the United Kingdom of value-added tax was deducted from the points out in its observations, that the amount to be paid by way of registration reasons for and the circumstances tax. In fresh proceedings instituted by the surrounding the introduction of the special Commission against Belgium for failure to tax are of no assistance in determining the fulfil its obligations, the Court pointed out objective nature of that tax. Its nature does in its judgment of 4 February 1988 (in Case not depend either on its designation or on 391/85 ECR 579) that the Belgian legis the national legislative measures by which it lation established a direct link between that was introduced.

The that, by introducing that tax in that manner, Court came to the conclusion that the new the Netherlands have failed to fulfil their tax, as far as its amount or even its very obligations under the directives on existence was concerned, did not constitute value-added tax. an independent tax but depended on the value-added tax payable on the same car. Elsewhere in the judgment, the Court pointed out that there was an inseparable 2 and complementary relationship between value-added tax and the registration tax.

OPINION OF MR MISCHO — JOINED CASES 93/88 AND 94/88

13. The Court therefore took the view that, 16. As for the second directive adopted by by retaining in practice, under its legislation, the Council on the same date, it defines the the list price as the basis for the taxation of structure and the detailed rules of new cars, Belgium had failed to take the application of the common system of measures necessary to comply with the value-added tax (Official Journal, English Court's previous judgment and had failed to Special Edition 1967, p. 16) and it is fulfil its obligations under the Treaty. therefore irrelevant in the circumstances of this case. Moreover, it was replaced by the Sixth Council Directive of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes, 14. It would seem, however, that there is no which was cited above. link between value-added tax and the Netherlands' special tax which is comparable to that established in connection with the Belgian taxes. Value-added tax and 17. However, the plaintiffs also claim that the special tax are genuinely independent of the special tax is contrary to the ratio legis each other and are never offset against one of the system of value-added tax and that it another. It should also be borne in mind is incompatible with the intention expressed that the special tax is not mentioned on the by the Council to make further progress in invoice but forms part of the cost of the car the effective removal of restrictions on the and that value-added tax is charged on the movement of persons, goods, services and total sum represented by the price of the car capital and the integration of national and the special tax. In those circumstances economies (third recital in the preamble to the Court's reasoning in Case 391/85 the Sixth Directive). I shall therefore cannot be applied in this case. consider the special tax from that angle.

22. Only cars which have been imported 20. With the former cumulative multi-stage and re-exported without having been used taxes it was not possible to ascertain qualify for reimbursement of the special tax precisely what tax burden was actually and that reimbursement is identical to the borne by goods which had been through a amount of the tax. It does not therefore number of manufacturing or distribution include any flat-rate sum which may be stages. The Member States had therefore regarded as a aid to exports. Conversely, a provided for flat-rate remissions of tax on car manufactured in another Member State exportation which could entail a subsidy will bear, upon importation into the element and countervailing taxes on Netherlands, the same special tax as that importation which were liable to bear more borne by domestically manufactured cars. heavily upon imported products than upon Accordingly, that taxation does not give rise domestically manufactured products. The to any protective effect and is not therefore system of value-added tax eliminates that contrary to Article 95 of the Treaty. problem by rendering the taxation borne by each product transparent. It leads to neutrality in competition, inasmuch as within each country similar goods bear the same tax burden, whatever the length of the production and distribution chain. Since it is 23. However, the plaintiffs in the main now possible to ascertain the amount of the proceedings claim that secondhand cars burden borne by goods of domestic origin, which Netherlands owners may wish to sell an exact equalization of that burden is in another Member State are at a possible with regard to imports and exports. competitive disadvantage because the special Imported goods are subject to the same rate tax, which is paid when those cars are of value-added tax as goods manufactured purchased, cannot be reimbursed under the in the importing Member States and Netherlands legislation. Furthermore, since value-added tax on exported goods is it is not value-added tax, the tax authorities remitted exactly up to the amount of tax of the importing country are not obliged to which they have borne. take account of the special tax still contained in the selling price of a car of that 3 kind.

26. The plaintiffs also claim that persons That is manifestly not the case with the who engage in the Netherlands in the special tax. renting-out of vehicles to foreign tourists are also exposed to distortions of compe­ tition. As a result of the special tax, Netherlands rental firms have much higher costs than rental firms in other Member States. That difference becomes apparent primarily when rental firms in different 25. The Court's judgment in Statens Member States operate on the same market, Kontrol is likewise of interest in that in particular the United States market. 5 connection. Finally, I would recall that, so Inclusive travel arrangements in Europe, far as importation is concerned, that is to which are offered to tourists or United say the reverse situation of that which is at States businessmen and which include the issue here, the Court stated in its judgment rental of a passenger car or a motorized 6 in Peureux that: caravan (on which the special tax on passenger cars is also levied) are far cheaper when they originate in other Member States than when they emanate from the Netherlands, which constitutes a disruption in the free movement of goods and services resulting solely from the levying of the 'Although Article 95 prohibits any Member special tax on passenger cars. State from imposing internal taxation on products imported from other Member States in excess of that on national products, it does not prohibit the imposition on national products of internal taxation in excess of that on imported products. Disparities of this kind do not come within 27. The only answer to that argument is the scope of Article 95, but result from that it is another inevitable consequence of special features of national laws which have the differences in national legislation. not been harmonized in spheres for which Furthermore, the differences between the the Member States are responsible'. rates of value-added tax applied by the Member States on cars, which vary from 5 — Judgment of 26 lune 1978 in Case 142/77 Steilem Kontrol 12% in Luxembourg to 38% in Italy, are Med Ædle Metatíerv Larsen [1978] ECR 1543. themselves liable to give rise to distortions 6 — Judgment of 13 March 1979 in Case 86/78 Peureux v Services fiscaux de la Haute-Saône at du territoire de Belfort of competition of the same type with regard [1979] ECR 897. to car rentals.

'Community harmonization relates at 30. The political institutions of the present only to turnover tax. Other indirect Community will therefore still be faced in consumer taxes fall within the Member that respect with a problem of harmon­ States' sovereign powers in so far as there ization which will be all the more difficult are no specific provisions of Community since three-quarters of the Member States law'. do not impose taxes of that kind. However, that problem cannot affect the proper assessment of the legal nature of the special tax. It constitutes an obstacle to the 34. With the framework of Council attainment of the internal market, similar to Directive 83/183/EEC of 28 March 1983 that resulting from differences between the on tax exemptions applicable to permanent rates of excise duty, but it is not an obstacle imports from a Member State of the to the normal functioning of the system of personal property of individuals (Official value-added tax. Journal 1983, L 105, p. 64), the Community legislature itself provided for the cumulative imposition of value-added tax with other taxes since the tax exemption 31. It is therefore possible to conclude that applicable to permanent imports of personal the special tax does not conflict either with property by an individual introduced by that

OPINION OF MR MISCHO — JOINED CASES 93/88 AND 94/88

directive does not cover certain duties and D. The question whether or not the special taxes including tax constitutes an excise duty

36. Finally, in its judgment of 8 July 1986 38. Nor, moreover, is the special tax an in Case 73/85 Kerrutt v Finanzamt excise duty in the substantive sense of the Mönchengladbach-Mitte [1986] ECR 2219, word. Excise duty can be levied only on the Court stated quite clearly that it follows non-durable consumer goods and the from Article 33 of the Sixth Directive that method of levying the special tax (ad Community law as it now stands does not valorem duty) differs from the method of contain any specific provision excluding or levying excise duties (specific duty). limiting the power of Member States to introduce taxes other than turnover taxes and thus permits such taxes to be levied even where the charging of such taxes on a transaction which is already subject to 39. The Commission, the Netherlands value-added tax may result in the double Government and the United Kingdom taxation of that transaction. Since, maintain, on the other hand, that although therefore, the principle of cumulative the majority of excise duties are effectively taxation cannot be called in question, levied on goods which are consumables (for everything depends on the question of instance, beer, other alcoholic beverages, whether the tax in question, in view of its sugar, petrol and toiletries) and although specific characteristics, may be regarded as their rate is generally calculated by one of the types of tax listed in Article 33 of reference to the quantity or weight of the the Sixth Directive which Member States goods or its alcoholic strength, there are are still permitted to maintain or introduce. also excise duties comprising at least in part

43. The expression 'excise duties' in Article 33 cannot be regarded as referring to any 41. The Netherlands Government and the tax classified as such by the national law of United Kingdom consider, therefore, that a Member State. It can refer only to excise the Netherlands special tax can be treated as duties which Community law treats as such an excise duty. by reason of their intrinsic nature. To my knowledge, no such definition exists yet.

E. The legal nature of the 'special tax'

50. The conclusion can therefore be drawn that neither the number of marketing stages taxed nor the existence or absence of a right 47. The Lexique des termes juridiques of deduction, nor the scope of a tax have published by Dalloz (1988, p. 440) contains any effect on the question whether or not the following definition of turnover taxes: the tax may be classified as a turnover tax.

'Generic name designating, in the broad sense, a number of indirect taxes, or 51. As the special tax is calculated as a parafiscal charges, whose common feature is percentage of the price of the cars supplied that they are calculated as a percentage of by a manufacturer or by an importer and is the price of the products and services taxed. therefore linked to the latter's turnover, it Value-added tax is by far the most constitutes, in my view, a turnover tax in important. Employed in the singular, the the sense generally given to that expression. term is sometimes used in business circles as a synonym for value-added tax itself'.

52. The question remains whether Article 33 of the Sixth Directive refers to all taxes 48. The history of indirect taxation in which may be classified as turnover taxes or 8 France preceding the introduction of whether it gives a more restricted meaning value-added tax in 1954-55 also demon­ to that expression. In Case 295/84 Rousseau strates eloquently that turnover tax may Wilmots the Court had to decide whether take a variety of forms. It may be levied on levies, such as the solidarity levy and the

53. It therefore analysed the principle of that system stating (in paragraph 15 of the 55. I suggest that the Court take the same judgment) that by virtue of Article 2 of the approach in this case and ascertain whether First Directive that principle consists in the the special tax exhibits the characteristics application to goods and services of a specified in the two aforesaid judgments. 0 general· tax on consumption which is exactly proportional to the price of the goods and services, irrespective of the number of transactions which take place in 56. It must be stated that although the the production and distribution process special tax is proportional to the price of the before the stage at which the tax is charged. cars, it does not constitute a general tax After referring to the procedure for since it is charged on only two categories of deduction, the Court concluded in products, namely passenger cars and motor paragraph 16 of the judgment that: cycles. Nor can it be said that it is levied on the movement of goods and services and charged on commercial transactions in a way comparable to value-added tax since it is applied once only, at the time of supply 'In leaving the Member States free to by the manufacturer or of importation. maintain or introduce certain indirect taxes Secondhand cars, other than those which such an excise duties on the condition that are imported, are not subject to the special they are not taxes which can be "charac­ tax. We have seen, moreover, that the terized as turnover taxes", Article 33 of the special tax does not compromise the func­ Sixth Directive seeks to prevent the func- tioning of the common system of tioning of the common system of value-added value-added tax. tax from being compromised by fiscal measures of a Member State levied on the 10 — Noi emphasized in the original.

60. Since I have suggested that the Court should give a negative answer to the first question, the second question in each case is necessarily devoid of purpose.

61. If, on the other hand, the Court should answer the first question in the affirmative, it would follow that a tax exhibiting the characteristics of the Netherlands special tax would be contrary to Community law since it would be caught by the prohibition laid down in Article 33 of the Sixth Directive.

WISSELINK AND OTHERS v STAATSSECRETARIS VAN FINANCIËN

62. In that case, the answer to the second question submitted in Case 94/88 (Abemij and Others) would have to be that this kind of tax may not be levied at all. If it could not be levied at all, the problem of its deduction, raised in the second question in Case 93/88 (Wisselink), would no longer arise.

63. In view of the substantial financial consequences which a declaration that this kind of tax is unlawful might have in the Netherlands and perhaps in other Member States, it would be advisable for the Court to hold that such illegality could not be relied upon in order to claim reimbursement of taxes paid before the date of the judgment, except by persons who instituted proceedings prior to that date.