C-130/92

1. With effect from 1 January 1983 a con- sumption tax on audiovisual and photo- optical products was introduced in Italy. The relevant provisions are found in Article 13 of Decree-Law N o 953 of 30 December 1982, which was subsequently amended and 3. O n 23 March 1983 the Ministero delle became Article 4 of Decree-Law N o 53 Finanze, the defendant in the main proceed- of 28 February 1983 (hereinafter 'Law ings, adopted a regulation implementing Law N o 53'). 1 The tax is levied both on products N o 5 3 . 3 In the seventh paragraph of Arti- manufactured in Italy and on imported cle 2 of that regulation it is provided that in goods. With one exception, the rate of tax the case of imported goods the tax is to be is 16%. 2 In the case of domestic products levied on the customs value within the mean- the tax is payable on the ex-works value ing of Regulation N o 1224/80 plus certain (valore franco fabbrica); as a result, the costs other amounts. Included in those amounts of distribution in the Italian market are not that are to be added to the customs value in taken into account. In the case of imported accordance with that provision are, above all, products, the value of the goods free at the the charges for entry into free circulation national frontier (valore in dogana franco within the Community. 4 frontiera nazionale) is taken as the basis of taxation (second paragraph of Article 4 of Law N o 53). 3 — G U R I N o 83 of 25 March 1983, p. 2326. 4 — The seventh paragraph of Article 2 of the regulation is worded as follows: 'Il valore imponibile dei prodotti impor- tati è costituito dal valore alla frontiera italiana determinato sulla base del valore in dogana ai sensi del regolamento comunitario 1224/80/CEE, aumentato degli eventuali costi * Original language: German. ed oneri per la resa alla frontiera italiana, ivi compresi i diritti 1 — A consolidated version of Law N o 53 is printed in the dovuti per l'immissione in Ubera pratica nella Comunità eco- Official Journal of the Italian Republic (GURI) N o 65 nomica europea e diminuito delle eventuali componenti del of 8 March 1983, p. 1798. prezzo pagato o da pagare che concernono il trasporto e la 2 — The rate of tax is 8% for certain television sets (second para- commercializzazione all'interno del territorio doganale nazi- graph of Article 4 of Law N o 53). onale'.

4. O T O SpA imported from Japan goods 6. O T O SpA appealed in cassation against which fell within the scope of Law N o 53 that judgment. The Corte Suprema di Cas­ and received a demand for payment of con­ sazione (Supreme Court of Cassation) stayed sumption tax from the Italian customs the proceedings and referred the following authority. O T O SpA instituted proceedings question to the Court of Justice for a prelim­ contesting that assessment before the Tribu­ inary ruling: nale (District Court), Rome. The plaintiff claimed that the tax had been wrongly calcu­ lated because the basis of assessment used by the authorities also included the amount of customs duties levied on the importation of On the basis of Article 12 of the EEC Treaty the products into the Community. 5 The — which prohibits the introduction between provision in the above regulation on which the Member States of charges having an the Italian authorities had relied was unlaw­ effect equivalent to customs duties — must a ful because it infringed Article 4 of Law charge having an effect equivalent to a cus­ N o 53. toms duty be understood as meaning only a charge which is imposed by a Member State of the Community on products imported from another Member State or as also including a tax that, albeit not affecting imports directly, makes a product coming from a non-member country de facto eco­ nomically more advantageous than the same type of product coming from a Member 5. The Tribunale Rome allowed the claim. State? Particular regard should be had to the The Ministero delle Finanze appealed against situation where that unfavourable treatment that decision and contended that Article 4 of for the Member State of the Community is Law N o 53 infringed Community law due to the fact that, under the new tax, the because it led to goods that have been value for tax purposes of the product admit­ brought into free circulation in other Mem­ ted into the Community market by the ber States and then exported to Italy being Member State in the case of a product which treated less favourably than goods that had was previously imported from a non- been imported directly from third countries. member country will be increased by the The Corte di Appello (Court of Appeal) charges for that product's entry into free cir­ espoused that view, and came to the conclu­ culation, which will not be the case where sion that the relevant provision in Law the product comes from a non-member N o 53 was not applicable. Since this meant country. that there was nothing to prevent the provi­ sions of the contested regulation being applied, it dismissed the plaintiff's claim.

wants to discover whether it is compatible the order for reference. As I have already with Community law for a provision to treat mentioned, this case concerns the question goods from non-member countries that are whether the charges for clearance into free exported directly to Italy more favourably circulation in the Community are to be than goods from non-member countries that taken into account. However, such charges reach Italy via another Member State. only arise if the product in question comes from a country which is not a member of the Community. On the other hand, as is well known, no customs duties or charges having equivalent effect can be levied on goods manufactured in a Member State and exported to Italy (cf. Article 12 of the EEC That difference in treatment results from the Treaty). O n the basis of the facts presently fact that, under the second paragraph of before the Court, it is not apparent how the Article 4 of Law No 53, the Italian con- Italian provision examined here could treat sumption tax is calculated, in the case of products manufactured in other Member goods from non-member countries imported States less favourably than products directly from non-member countries, on the imported from non-member countries. basis of an amount which excludes import duty, whereas that is not so in the case of similar goods imported via another Member State. 6 Article 12 of the EEC Treaty

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uct whilst the second is imposed on both was also valid for the other consumption imported and domestic products'. taxes levied in Italy:

10. According to the case-law of the Court, 'A tax on consumption of the type at issue in a charge which is borne by imported goods the main proceedings does form part of a can be regarded even as internal taxation, general system of internal dues. The 19 taxes when there are no identical or similar on consumption are governed by common domestic products. However, this presup- tax rules and are charged on categories of poses that the charge in question products irrespective of their origin in accor- dance with an objective criterion, namely the fact that the product falls into a specific cat- egory of goods.' n

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sent a charge having an effect equivalent to a The documents before the Court provide no customs duty if the proceeds of that charge basis for concluding that the court of refer- have the sole purpose of financing activities ence only wanted to ask about the interpre- 'for the specific advantage of the taxed tation of Article 12 of the EEC Treaty. 14 domestic products, so as to make good, wholly (...), the fiscal charge imposed upon them'. 12 There is no indication that the pro- ceeds from the consumption tax are to be used for such a purpose in the present case.

14. Article 95 of the EEC Treaty applies also to goods from non-member countries which are in free circulation within the Communi- Article 95 of the EEC Treaty ty. 15 Under Article 10(1) of the EEC Treaty such goods from non-member countries are considered to be in free circulation in a Member State when the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied. Arti- 13. Only Article 12 of the EEC Treaty is cle 95 can therefore be applied to those mentioned in the question referred to the goods only when the charges for their entry Court for a preliminary ruling. However it into free circulation have been paid. should be remembered that the Court has the duty

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from non-member countries, that customs imported from non-member countries; how- value also includes the costs of entry into ever, at the same time it indicated that any free circulation is not the result of any dis- treaty provisions in force between the Com- crimination by Italian law but is the logical munity and the country of origin of the consequence of the principle laid down in goods remain unaffected. 18 There are how- Article 10(1) of the EEC Treaty. ever no treaties which would forbid goods imported (directly) from non-member coun- tries from being treated more favourably than — particular — goods that are in free circulation within the Community.

15. As I have already mentioned, there are no grounds for concluding that goods from other Member States (whether manufactured there or brought into free circulation there) are being treated less advantageously than The common customs tariff (Articles 18 to 29 products manufactured in Italy. 16 of the EEC Treaty) and the provisions on the common commercial policy (Articles 110 to 116 of the EEC Treaty)

16. Admittedly, goods from non-member countries that are brought into free circula- tion in other Member States, and then exported to Italy, are treated less favourably than products exported directly to Italy from 18. In its written observations — admittedly the non-member country concerned. How- without going into more detail regarding the ever, the Court has consistently held that the questions being examined here — the Com- provisions of Article 95 are not applicable to mission adopted the view that the provisions (direct) imports from non-member coun- concerning the common customs tariff are tries. 17 irrelevant to the present case. I am not able to espouse that view.

results in goods originating in a non-member therefore, in my opinion, not compatible country being treated differently depending with the principles of the common customs on whether they are exported from the non- tariff and the common commercial policy. member country directly to Italy, or reach The common customs tariff Italy via another Member State. The amount of consumption tax that is levied on directly imported goods is less than the amount charged in respect of goods first brought into free circulation in another Member State and then exported to Italy. 'is intended to achieve an equalization of customs charges levied at the frontiers of the Community on products imported from third countries, in order to avoid any deflec- This means that it is more advantageous for a tion of trade in relations with those countries manufacturer in a non-member country to and any distortion of free internal circulation export his goods directly to Italy. If, for or of competitive conditions'. 20 example, the Italian market had until now been supplied by a distributor in another Member State, there now exists an incentive to deliver to Italian customers by means of direct exports to Italy. If one takes into account the fact that the audiovisual and photo-optical equipment subject to the tax As I believe I have shown, the Italian provi- are products with a not inconsiderable com- sion gives rise to the risk of such deflections mercial value, the savings which could be or distortions of trade. made in this manner ought to be by no means insignificant. Since, under the eighth paragraph of Article 4 of Law N o 53, the Italian consumption tax is not levied (or is refunded) for products exported from Italy, the direct effects of that tax are admittedly limited to goods destined for the Italian mar- 21. It is certainly true that the customs duty ket. 19 laid down in the common customs tariff for the product concerned is levied at the same rate both for products from non-member countries exported directly to Italy and for products from non-member countries which 20. The form that the Italian consumption reach Italy via another Member State. The difference in the fiscal burden is instead the tax has adopted pursuant to Law N o 53 is result of the application of the Italian con-

sumption tax. However, the Court of Justice Commission, referring to the judgment in has stated that even 'charges other than cus- Simba, holds the view that a charge cannot toms duties as such' can infringe Commu- be classified at the same time as internal tax- nity law. 21 Although the provisions regard- ation within the meaning of Article 95 of the ing the setting up of the common customs EEC Treaty and as a charge having an effect tariff (Article 18 et seq. of the EEC Treaty) equivalent to a customs duty within the — in distinction to the provisions of Arti- meaning of Article 9 of the EEC Treaty. It cles 12 to 17 of the EEC Treaty — do not was indeed for that reason that the Court mention charges having an effect equivalent declined, in the above decision, to examine to customs duties, it is clear from the objec- the compatibility with the common customs tive of those provisions tariff of the Italian consumption tax on fresh bananas. 23

21 — Judgment in Joined Cases 37/73 and 38/73 Diamant Arbeiders, cited above, (footnote 20), paragraph 13. 22 — Judgment in Joined Cases 37/73 and 38/73 Diamant 23 — Judgment in Joined Cases C-228/90, C-229/90 etc., Simba, Arbeiders, cited above, (footnote 20), paragraphs 13 and 14. cited above, (footnote 10), at paragraph 25.

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countries, after being brought into free circu- that impon duties and other charges are lation, are treated in exactly the same manner included in the taxable amount also when as products from the Member States. In this calculating value added tax unJer the Sixth context it may perhaps also be pointed out Directive. 26

C — Conclusion

27. I therefore propose that the Court give the following answer to the question submitted by the Corte Suprema di Cassazione:

(1) A charge that applies to both imported and domestic products is not a charge having an effect equivalent to a customs duty within the meaning of Article 12 of the EEC Treaty if it relates to a general system of internal dues applied sys- tematically to categories of products in accordance with objective criteria irre- spective of the origin of the products. Consequently it is in the nature of inter- nal taxation within the meaning of Article 95 of the EEC Treaty.