C-228/98

DOUNIAS

OPINION OF ADVOCATE GENERAL JACOBS delivered on 23 September 1999 *

1. In this case the Simvoulio tis Epikratias which has sought guidance from this Court (Greek Council of State) has referred a on the following questions: series of questions concerning the compat- ibility with Community law, and in parti- cular with Articles 30 and 95 of the EC Treaty (now, after amendment, Articles 28 and 90 EC), of national legislation deter- mining the method of calculating the taxable value of imported goods for the '( 1 ) Is the method set out in Law purposes of certain indirect taxes and No 1477/1984, in particular Arti- laying down rules for settling customs cles 1(2), 2(3), 3(3) and 4(3) thereof, disputes in relation to such goods. and Article 16 of Law No 1642/1986 for calculating taxable value for the purposes of the taxes laid clown by those Laws contrary to the provisions governing the European Economic Community, in particular Articles 30 and 95 of the Treaty of Rome?

3. Written observations have been submit- ted by the applicant, the Greek Govern- ment, the Council and the Commission, all of whom were represented at the hearing. (5) If the answer to Question 2 is in the negative, is Article 16 of the Code of Legislation relating to the Customs Tariff (Codifying Decree of 25/30 July 1920), as replaced by Article 1 of Law N o 428/1943, contrary to the provi- sions of the Treaty of Rome and in The national legislation particular Article 30 thereof?

4. The national legislation is set out briefly in the order for reference and more fully in the observations of the Commission and the Greek Government. (6) Is the administrative procedure for settling disputes provided for in Arti- cle 10 of the abovementioned Code of Legislation relating to the Customs Tariff and Article 136 of Presidential Decree N o 636/1977 contrary to the 5. Following its accession to the European provisions of the Treaty of Rome and Economic Community, Greece adopted in particular Article 30 thereof, where Law N o 1477/1984 in order to harmonise a domestic tax is levied on goods the indirect taxes existing at that time with imported from another Member State? the principles of Community law. The first

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chapter of the Law, entitled 'Harmonisa- are deducted, provided that they arc men- tion of taxable amount and rates', governs tioned on the invoice or document eviden- the four indirect taxes at issue, namely cing the sale; if the sale price includes turnover tax, stamp duty, the special con- turnover tax, it is deducted; the value of the sumption tax and the regularising tax, in raw materials, if exempt or already subject Articles 1, 2, 3 and 4 respectively. to turnover tax, is deducted; commissions, brokerage fees, interest and accessory costs, such as transport, installation, assembly, loading, handling, etc., are included, even if payable by the purchaser, as arc the value of services provided for the sale and, in general, for the marketing of the product. ''

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taxes (other than stamp duty), 7 contribu- The special consumption tax tions and other general charges imposed on imported goods. 8

Stamp duty

10. Article 3 of Law No 1477/1984, enti- tled 'Amalgamation of excise duties and luxury goods tax', provides that the special consumption tax (which results from the amalgamation of the two abovementioned taxes) is to be levied at the same rates on 9. Article 2(1) of Law No 1477/1984, enti- goods manufactured or processed on the tled 'Stamp duty', provides that stamp duty national territory and on imported goods; is to be calculated, for imported and the rates are expressed as a percentage of national products sold within the country, the taxable value determined in accordance by application of the same rates on the with Article 3(3) or by net weight. Arti- taxable value defined in accordance with cle 3(3) provides that the taxable value is to Article 2(2). Article 2(2) provides that the be determined for national products on the taxable value is determined on the basis of basis of the manufacturer's or processor's the total sale price, including interest on sale price without any other charge and for credit sales, customs duties, taxes, 9con- imported products on the basis of the tributions and general charges for the customs value for import duty in accor- account of the purchaser. For imported dance with Regulation No 1224/80, plus goods turnover tax is also to be added to buying commission, packing, transport and the taxable value. 10 insurance costs to the place of introduction of the goods into national territory, interest on capital, import duties 11 and any Com- 7 — And other than what appears to be a tax on pharmaceutical munity anti-dumping or countervailing products payable by virtue of Article II(I)(6) of Law charges. No 1316/1983. 8 — Article 1(2)(b). 9 — Other than what appears to be a tax on pharmaceutical products payable by virtue of Article II(I)(6) of Law No 1316/1983. 11 — Including fiscal charges of equivalent effect, agricultural levies and other charges levied in the context of the 10 —Article 1(2)(b). common agricultural policy etc.

13. Law No 1642/1986, referred to in the national court's first and fourth questions, introduced value added tax into Greece pursuant to the Sixth Directive 14 with effect from 1 January 1987. Article 16 12. Article 4 of Law No 1477/1984 pro- concerns the taxable value of imported vides that, to compensate for the reduction goods. Since Law No 1642/1986 entered in the bases of assessment and rates, a into force after the events which gave rise regularising tax is imposed on imported to the main proceedings, its provisions are goods, irrespective of their country of not relevant to the case before the Court origin, at a percentage of the taxable value and I will not consider them further. determined in accordance with Arti- cle 4(3). Article 4(3) provides that the taxable value is based on the customs value 1 3 — Including fiscal charges of equivalent effect, agricultural levies and other charges levied in the context of the common agricultural policy etc. 14 — Sixth Council Directive (77/388/ E EC) of 17 May 1977 on the harmonisation of the laws of the Member States 12 — Act concerning the conditions of accession of the Hellenic relating to turnover taxes — Common system of value Republic and the adjustments to the Treaties (OJ 1979 added tax: uniform basis of assessment, OJ 1977 1. 145, L 2 9 1 , p. 17). p. 1.

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Collection of tax and settlement of disputes in the event of a customs dispute the goods shall not be released to the consignee unless he pays such customs duties as are required by the customs authorities.

15. Article 16 1 8 of the Code of Legislation relating to the Customs Tariff provides that

17. Article 1(2)(8) of Law N o 1406/1983 15 —Article 11(4) of Decree-Law No 660/1937 on turnover tax; Articles 3(5)(b) and 7(1) of Law No 1477/1984 and provides that proceedings concerning State Article 55(1) of Law No 1642/1986. liability for compensation are within the 16 — As replaced by Article 33 of Mandatory Decree 1805/1951 and supplemented by Article 3 of Decree-Law jurisdiction of the ordinary administrative No 2680/1953. courts. Article 4 refers to Articles 50 to 65 17 — Royal Decree of 25 July 1920, as substituted by Article 33 of Law No 1805/1951. of Presidential Decree N o 341/1987 but 18 — As replaced by Article 1 of Law No 428/1943. not to Article 49 thereof. It follows that in

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such proceedings the parties may not actually paid or payable for the imported adduce witness evidence before the admin- goods: istrative court, although the court may of its own motion or at the request of a party order witnesses to be heard in exceptional cases.

(a) the following, to the extent that they are incurred by the buyer but are not included in the price actually paid or payable for the goods:

value has not been included in the price (d) the value of any part of the proceeds of actually paid or payable: any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller;

(i) materials, components, parts and similar items incorporated in the imported goods, (e) (i) the cost of transport and insurance of the imported goods, and

(ii) tools, dies, moulds and similar items used in the production of the imported goods, (ii) loading and handling charges asso- ciated with the transport of the imported goods

(iii) materials consumed in the produc- tion of the imported goods, to the place of introduction of the goods into the customs territory of the Community.'

(iv) engineering, development, art- work, design work, and plans and sketches undertaken elsewhere than in the Community and neces- sary for the production of the 20. Article 11 provides: imported goods;

(c) royalties and licence fees related to the 'If, in the course of determining the cus- goods being valued that the buyer must toms value of imported goods, it becomes pay, either directly or indirectly, as a necessary to delay the final determination condition of sale of the goods being of such customs value, the importer shall valued, to the extent that such royalties nevertheless be able to withdraw his goods and fees are not included in the price from customs if, where so required, he actually paid or payable; provides sufficient guarantee in the form of I-588

21. By its first question, the national court essentially asks whether the method set out in Law No 1477/1984 (the law to harmo- 24. It is settled law that obstacles to trade nise indirect taxes) for calculating taxable which are of a fiscal nature do not in value for the purposes of turnover tax general fall within the prohibition in Arti- (Article 1(2)), stamp duty (Article 2(3)), cle 30 on quantitative restrictions on the special consumption tax (Article 3(3)) imports and measures having equivalent and the regularising tax (Article 4(3)) is effect but fall to be assessed by reference to contrary to Community law, in particular Articles 9 to 12 (now, after amendment, Articles 30 and 95 of the EC Treaty (now, Articles 23 to 25 EC) or Article 95 of the after amendment, Articles 28 and 90 EC). EC Treaty depending on whether they are on the one hand customs duties or charges having equivalent effect or on the other hand financial charges within a general system of internal taxation. 20 It is clear that the turnover tax, stamp duty and the consumption tax, which are imposed on 22. I would note at the outset that, both imported and domestic products, are although the Court has no jurisdiction part of a general system of internal taxation under Article 177 of the Treaty (now of goods; I will consider the correct cate- Article 234 EC) to rule on the question gorisation of the regularising tax after I whether provisions of national legislation have considered the compatibility with are compatible with the Treaty, it may Article 95 of those three taxes. provide the national court with all such criteria for the interpretation of Commu- nity law which may enable it to answer that 20 — Case 74/76 Iannelli v Meroni [1977] ECR 557, paragraph question. 19 9 of the judgment; see also Case 252/86 Bergandi v Directeur-Général des Impôts [1988] ECR 1343, Joined Cases 317/86, 48/87, 49/87, 285/87 and 363/87 to 367/87, 65/88 and 78/88 to 80/88 Lambert and Others v Directeur des Services Fiscaux de L'Orne and Others [1989] ECR 19 — Case 97/83 Melkunie [1984] ECR 2367, paragraph 7 of 787 and Joined Cases C-78/90 to C-83/90 Compagnie the judgment. Commerciale de l'Ouest and Others [1992] ECR I-1847.

27. First, as I stated in my Opinion in Haahr Petroleum, 23 the mere fact that at a given moment there happens to be no domestic production of a particular pro- duct does not mean that a Member State 29. Since the national legislation expressly may lay down tax rules which expressly distinguishes between imported and domes- provide for heavier taxation of imports tic goods in determining the taxable value for the purpose of turnover tax, stamp duty and the special consumption tax, and 21 — Case C-68/96 [1998] ECR 1-3775. expressly imposes the regularising tax on 22 — Case 57/65 Liitticke v Hauptzollami Saarlouis [1966] ECR 205. 23 — Case C-90/94 Haahr Petroleum v Åbenrå Havn and Others [1997] ECR I-4085, paragraphs 85 to 89 of the 24 — Case C-47/88 [1990] ECR I-4509, paragraph 17 of the Opinion. judgment.

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imported goods alone, and since the goods a better position to assess the effect of in question are in any event used goods, I detailed legislation of the type at issue and shall accordingly proceed on the basis that thus to determine the comparative weight Article 95 is in principle applicable. of the respective tax burdens.

32. The position with regard to stamp duty will be the same if turnover tax is included in the sale price for the purposes of taxable 30. As the Commission notes, the national value in the case of both national and court's first question requires a comparison imported goods. It is not clear from the of the national provisions concerning the documents before the court whether that is taxation of imported and of domestic so; it must thus be verified by the national goods in order to determine whether in court. practice the fiscal burden on imported goods is heavier than that on national goods.

levied explicitly and solely on imported The second and third questions goods, is inherently discriminatory and contrary either to Article 95 25 or to Arti- cles 9 to 12 of the EC Treaty. Those latter provisions prohibit customs duties and charges having equivalent effect, which the Court has defined as 'any pecuniary charge, however small and whatever its designation and mode of application, 35. By its second question, the national which is imposed unilaterally on ... foreign court asks whether Regulation No 1224/80 goods by reason of the fact that they cross a is directly applicable where a tax provided frontier, and which is not a customs duty in for under the legislation of a Member State the strict sense'. 26 It is clear that a given applies to goods imported from another levy cannot be both a charge having an Member State. By its third question, which equivalent effect under Articles 9 to 12 and arises only in the event of an affirmative internal taxation under Article 95. 27 Since reply to the second question, the national in this case nothing turns on whether the court asks whether Article 11 of that tax is regarded as contrary to Article 95 or Regulation is contrary to the EC Treaty to Articles 9 to 12 (in either event it will be and in particular Article 30. unlawful in toto), I do not consider it necessary or appropriate to analyse further which categorisation would be more appro- priate. The distinction might, however, have been relevant had the facts occurred earlier, since between 1 January 1981 and 1 January 1986 transitional provisions governing the accession of Greece permit- ted the continuation of charges having 36. It is clear that Regulation No 1224/80, equivalent effect to customs duties on as is apparent from its title, its preamble imports on a reducing scale. 28 and the wording of its provisions, applies only to the import into a Member State of goods originating in third countries. That view is shared by the applicant, the Greek Government, the Council and the Commis- sion.

38. By its fourth question, which is put only in the event that the second question 41. The national court's fifth, sixth and is, as I propose, answered in the negative, seventh questions concern the compatibility the national court asks whether the refer- with the EC Treaty, and in particular ence in national legislation such as Laws Article 30, of certain national rules of Nos 1477/1984 and 1642/1986 to Regula- procedure. The fifth question concerns a tion No 1224/80 is contrary to the EC requirement that imported goods be Treaty and in particular Article 30. retained by the customs authorities in the event of a customs dispute unless the consignee pays such customs duties as are required by the customs authorities. The sixth question concerns a requirement that customs disputes be resolved by an admin- istrative procedure rather than by the administrative courts. The seventh and 39. I have already indicated that in my final question concerns the restriction of view the compatibility with the Treaty of witness evidence in proceedings before an essentially fiscal provisions falls to be administrative court concerning State lia- assessed by reference to Article 95 (or, if bility for damage resulting from a breach of relevant, Articles 9 to 12) of the Treaty and Community law. not by reference to Article 30.

4 3 . It is settled law that, although it is for which is checked later, namely after release the domestic legal system of each Member of the goods, whereas for imported pro- State to designate the courts and tribunals ducts the taxpayer is required to have having jurisdiction and to lay down the recourse to the administrative complaints detailed procedural rules governing actions procedure if he disputes the basis of for safeguarding rights which individuals assessment; until the end of that procedure derive from the direct effect of Community the goods may not be released unless the law, those rules must fulfil two require- taxpayer agrees to pay the amount of tax ments: they must not be less favourable demanded. If the Commission's exposition than those governing similar domestic of the equivalent procedure for national actions nor render virtually impossible or products is correct — a matter for the excessively difficult the exercise of rights national court to determine — it is clear conferred by Community law. 30 National that the rules relating to disputes regarding rules of evidence are of course subject to turnover tax in respect of imported goods the same principle. 3 1 are less favourable than those governing similar domestic actions. The rules are accordingly contrary to Community law.

The fifth question — the retention of imported goods until payment in full

46. Even, however, if there is no corre- The sixth question — resolution of customs sponding procedure for similar domestic disputes by administrative procedure claims, or even if the corresponding proce- dure is equivalent in all respects, that will not necessarily mean that the procedure at issue is compatible with Community law. It is clear that the second limb of the principle laid down by the Court, namely that domestic procedural rules must not make it impossible in practice or excessively 47. For the reasons given above in the difficult to exercise Community law rights, context of the fifth question, a national will preclude rules the effect of which is to provision requiring that disputes concern- make it excessively difficult for the tax- ing the levying of taxes on imported goods payer to bring and pursue an action be resolved by an administrative rather disputing the validity, as a matter of than a judicial procedure will infringe Community law, of taxes imposed on Community law if that procedure is less imported goods, even if the same treatment favourable than that governing similar is extended to taxpayers who have similar domestic actions or renders virtually claims arising from an infringement of impossible or excessively difficult the exer- national tax law. 32 If the effect of the cise of rights conferred by Community law. national rules is to make it impossible in If therefore the procedure at issue works to practice or excessively difficult to dispute the disadvantage of importers of goods the validity of charges levied contrary to from other Member States, the national Community law, those rules are unlawful. rule will be contrary to Community law on A rule such as that at issue in the national the basis of the case-law referred to in the court's fifth question may well have that context of the fifth question. If however the effect on a small-scale importer, who will procedure applicable in the case of disputes be required to pay the entire amount of tax concerning tax on imported goods is the same as that applicable in the case of disputes concerning tax on domestic goods, 32 — Amministrazione delle Finanze dello State v San Giorgio, cited in note 31, paragraph 17 of the judgment. there will be no infringement of Commu-

33 — Case 222/86 UNECTEF v Heylens [1987] ECR 4097, paragraph 14 of the judgment. 34 — See note 30.

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that that is the result. If the effect of the ings in which such evidence is critical to the national rule at issue is — as appears to be claimant's case, the rule does not satisfy the case — that in practice national courts that requirement and is accordingly con- restrict the calling of witnesses in proceed- trary to Community law.

Conclusion

5 1 . I accordingly conclude that the questions referred by the Simvoulio tis Epikratias (Greek Council of State) should be answered as follows:

(5) Legislation of a Member State which provides that customs disputes are to be resolved by an administrative rather than a judicial procedure is contrary to Community law if that procedure is less favourable than the procedure applicable to disputes concerning taxes on domestic goods or if it could put at a disadvantage imports from other Member States or if there is no judicial remedy available against an administrative decision.

(6) Legislation of a Member State which restricts the type of evidence which may be adduced is contrary to Community law if it renders impossible in practice or excessively difficult the exercise of rights conferred by Community law.

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