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vehicles in class L, car tax is to be paid to vehicle less FIM 4 600. The tax must the State in accordance with that law always, however, be at least 50% of the before registration or bringing into use of taxable value. the vehicle in Finland.

8. Under Paragraph 7, the tax levied in respect of an imported used vehicle is that on an equivalent new vehicle, but reduced 4. Paragraph 3 governs the taxation of in accordance with that provision. vehicles at least 50% of whose parts have been replaced. Imported used vehicles are re-taxed if at least 25% of their parts have been replaced. For vehicles in respect of which the tax is determined on or after 15 January 1999, Paragraph 7 applies in the version of Law 1160/1998. Under the version of Paragraph 7(1) previously in force and applicable to the main proceedings, the tax on the 5. Under Paragraph 4(1), the importer of a equivalent new vehicle was reduced by vehicle or the manufacturer of a vehicle 0.5% for each complete calendar month, manufactured in Finland is liable to pay car calculated from the date on which the tax. vehicle had been registered or in use for six months. The tax was reduced for the first 150 months only.

10. Under Paragraph 11, the basis of the taxable value of an imported vehicle is its acquisition value to the taxpayer less the amounts mentioned in Paragraph 16. All costs directly or indirectly incurred by the taxpayer before taxation in respect of the vehicle in bringing it to Finland or to the taxpayer's first place of storage in Finland, and also customs duty if payable in respect of the vehicle, are to be included in the taxable value.

Paragraph 11 further provides that:

The taxable value of a vehicle manufac- tured in Finland, if the manufacturer is a taxpayer, is the price of the vehicle at the place of manufacture defined on the basis 'The acquisition value of an imported of the costs of manufacture of the vehicle. vehicle is:

Not included in the taxable value, however, are the value of a normal service of the 1. the customs value within the meaning of vehicle for sale or the value of accessories the Customs Code of the European Com- worth a maximum of FIM 500 added to the munity (Council Regulation (EEC) vehicle in that connection. The vehicle's No 2913/92 of 12 October 1992) and registration fee and the fee for registration Commission Regulation (EEC) No 2454/93 plates are not included in the taxable on the implementation of the Customs value.'

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monisation of the laws of the Member 22. Article 28a of the Sixth Directive con- States relating to turnover taxes — Com- tains special provisions for new cars. mon system of value added tax: uniform basis of assessment ('the Sixth Directive'). 2

20. Article 2 of the Sixth Directive pro- 23. Article 28a(1)(b) provides: vides:

'The following shall be subject to value '1. The following shall also be subject to added tax: value added tax:

1. the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such;

2. the importation of goods.' (b) intra-Community acquisitions of new means of transport effected for con- sideration within the country by tax- able persons or non-taxable legal per- sons who qualify for the derogation 21. Since 1 January 1993, it is only the provided for in the second subpara- introduction of goods into the Community, graph of (a) or by any other non-tax- and no longer the introduction from able person.' another Member State, which counts as importation. Similarly, throughout the Community, the acquisition of a used vehicle is no longer subject to the value added tax of the State of destination.

— they have travelled more than 6 000 kilometres in the case of land vehicles, sailed for more than 100 hours in the case of vessels, or flown for more than 40 hours in the case of aircraft. 27. The Helsingin piiritullikamari (Hel- sinki District Customs Office) took the value of a new car of the same type as DEM 41 100 and added DEM 3 880 for the accessories. The result was a value, con- verted into Finnish marks, of FIM 136 851. Member States shall lay down the A flat-rate deduction of FIM 4 600 and a conditions under which the above facts deduction for age of FIM 85 963 were can be regarded as established.' made. The car tax was determined at FIM

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46 288 and the value added tax thereon at used car of the same make and year FIM 10 183. According to Mr Siilin, the list registered in Finland. It therefore quashed price excluding tax was based on the selling the decision as regards the car tax and price of the Finnish official importer. On remitted the case to the District Customs 21 April Mr Siilin paid the entire amount. Office to redetermine the amount.

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IV — The questions referred for a prelimi- amount depending on which commer- nary ruling cial level the importer of the vehicle operates at, that is, whether he oper- ates as a wholesaler, a retailer or a consumer?

33. On 15 March 2000 the Korkein hal- linto-oikeus decided to make a reference to the Court for a preliminary ruling on the following questions: 2. Under Paragraph 7(1) of the Autove- rolaki the basis of the tax levied on an imported used car is the tax on an equivalent new vehicle, with the reduc- tions as laid down in that provision. Under the old law 1482/1994, the tax charged on an imported second-hand 'Car tax car was the tax on an equivalent new car reduced by 0.5% for every com- plete calendar month calculated from the time when the vehicle had been registered or had been in use for six months, and the tax was reduced for 1. Under Paragraph 11 of the Autovero- only the first 150 months of use. Under laki, in determining the car tax on a the current law 1160/1998, the tax vehicle imported as Community goods, charged on an imported second-hand the basis of the taxable value is the car is the tax on an equivalent new car transaction value of the vehicle for the reduced by 0.6% per month of use for taxable person. The transaction value the first 100 months of use and then for is the customs value within the mean- the next 100 months by 0.9% per ing of the Customs Code and Imple- month of use of the residual value mentation Regulation so far as appli- calculated at the end of each preceding cable. month, and for subsequent months of use by 0.4% of the residual value calculated at the end of each preceding month. Months of use are taken as complete calendar months from when the vehicle was first taken into use or registered. May A r t i c l e 90 EC ( f o r m e r l y Article 95 of the EC Treaty) be inter- preted as meaning that such national legislation relating to the determination of the taxable value for car tax pur- poses is not discriminatory, taking into account in particular that the taxable M a y A r t i c l e 90 EC ( f o r m e r l y value of a vehicle will be a different Article 95 of the EC Treaty) be inter- I - 7498

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V — The questions relating to car tax twice as much tax as a used car which was originally imported when new by an offi- cial importer.

34. The first three questions concern vari- ous aspects of the provisions of the Autove- rolaki applicable to the facts at issue in the main proceedings. They will therefore be examined together. 37. Under Paragraph 7(1) of the Autovero- laki, the tax on an imported used car corresponds to the amount charged on a similar new car, but with reductions in accordance with the provisions of that law. In the case of the importation of a used car by a private individual, the tax payable on a similar new car corresponds to the tax on a vehicle whose basis of assessment includes the seller's margin and other A — Submissions of the parties associated amounts. By contrast, an official importer who imports a new car into Finland pays tax on the purchase price, that is, without his margin and miscel- laneous costs being included. The tax on new cars imported into Finland by an official importer is therefore less than in 35. According to Mr Siilin, the car tax the case of the importation of a new or used discriminates against imported vehicles and car by a private individual. therefore infringes Article 90 EC. He sub- mits that, to ascertain the basis of assess- ment of an imported used car, the tax-free price of a new car is used. In most cases the car tax is greater than the residual amount of tax contained in the value of a similar used car registered in Finland.

38. Mr Siilin takes the view that in those circumstances the monthly reductions laid down in the law have only a slight effect on the residual amount of tax contained in the value of a similar vehicle. The used car and the similar new car imported by an official 36. Application of the Finnish tax system importer have different bases of taxation. leads to a used car imported by a private The percentage reductions do not eliminate individual being burdened with at least the discrimination.

41. Finally, Mr Siilin submits that it fol- lows from the Outokumpu 5 judgment that even tax discrimination which occurs only in certain cases, namely a higher burden on imported products than on products of domestic origin, conflicts with Community law. 43. To ascertain the equivalent products which form the basis for the comparison, in the opinion of the Finnish Government, the economic context must be taken into account, in addition to the essential char- acteristics of the vehicle such as make, model and age. That makes it possible, in 42. The Finnish Government assumes that order to determine the discriminatory effect car tax does not infringe Article 90 EC. of a tax levied on imported used cars, to That article does not prohibit the Member take as the basis of comparison the residual States from taxing goods differently, where amount of tax contained in the value of a vehicle which is already in the Member State and was imported at the same com- 4 — Case C-375/95 Commission v Greece [1997] ECR I-5981, mercial level and with the same character- paragraph 22. istics. Discrimination exists only if the tax 5 — Case C-213/96 Outokumpu [1998] ECR I-1777, paragraph 41. levied on used cars exceeds the residual

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amount contained in the value of a similar 47. According to the Commission, the vehicle which is already on the market and provisions of the Autoverolaki under which was taxed as a new car at the same the tax is to be ascertained on the basis of commercial level. the value of an equivalent new car do not as such infringe Article 90 EC, provided that the new car corresponds to the imported used car in all respects and that the tax thus ascertained does not exceed the residual amount of tax contained in the value of a used car already registered in the Member State.

52. Finally, the car tax is discriminatory because it places dealers in other Member States at a disadvantage.

50. Article 90 EC further precludes a provision under which a linear reduction of 0.5% a month is carried out without taking the vehicle's real depreciation into consideration. The Commission considers that it is not possible to take account of B — Opinion depreciation in a general way, since it depends on numerous factors such as the country, type or model. The Finnish Gov- ernment has indeed produced a study of depreciation from 1998, but the Commis- sion has no information available as to 53. The first three questions concern vari- what depreciation in 1998 actually was. In ous aspects of the Finnish Autoverolaki in Commission v Greece the Court stated that the version applicable to the main proceed- annual depreciation is normally greater ings. The aspects addressed in the questions than 5% and that depreciation is greater all fall within the scope of Article 90 EC, in the first few years in particular. which according to the Court's settled case-law 6covers not only the rate of tax but also the details of how the tax is levied and the basis of assessment.

54. The Finnish provision concerning the tax treatment of repairs and the question whether that provision is discriminatory, 51. The Commission adds that a tax system in which individual features are not taken into account infringes Article 90 EC if the 6 — See only Case 74/76 lannelli v Meroni [1977] ECR 557 and Case C-47/88 Commission v Denmark (1990) ECR I-4509, result is that the tax levied on an imported paragraph 18.

1. Commercial level of the purchaser 56. Moreover, it is settled case-law 9that, in assessing tax provisions such as those at issue in the main proceedings, it must be taken into account that the upper limit for taxes is the residual amount contained in the value of the goods being taxed. With a used car, that corresponds to the residue of the tax which was levied on its registration 59. The problem of the commercial level, as a new car and is still contained in its addressed in the first question referred, value as a used car. This residual amount is essentially relates to the question whether directly proportional to the depreciation, 10 Article 90 EC permits taking into account in that it decreases in the same proportion the commercial level of the goods to be as the value of the car. taxed. That constitutes a point of law in that the basis of assessment may vary in size according to the commercial level. 7 — Commission v Denmark, cited in note 6, paragraph 22. 8 — Nunes Tadeu, cited in note 3, paragraph 20, and Case C-393/98 Gomes Valente [20011 ECR I-1327, paragraph 23. 11 — As Advocate General Jacobs said in his Opinion in Nunes 9 — Commission v Denmark, cited in note 6, paragraph 20. Tadeu, cited in note 3, point 17; see also the recent 10 — Gomes Valente, cited in note 8, paragraph 41. judgment in Gomes Valente, cited in note 8, paragraph 43.

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That, however, leads to different amounts the characteristics of the goods and must of tax, so that taking the commercial level actually thus necessarily be taken into into account could ultimately be discrimi- account. natory.

62. (b) The question then arises whether 13 — Case C-265/99 Commission v france [2001] ECR I-2305, the commercial level of the goods is once of paragraph 41. 14 — Commission v france, cited in note 13, paragraph 42, and Case C-421/97 Tarantik [1999] ECR I-3633, paragraph 28. 12 — Case C-228/98 Dounias [2000] ECR I-577, paragraph 45. 15 — Dounias, cited in note 12, paragraph 48.

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account for domestic used cars or to on the domestic market, even that would provide for no possibility of deduction for not be permitted. Under the Finnish system imported used cars as opposed to domestic that would be the case, for example, if a used cars. 16 higher basis of assessment were used than for an equivalent domestic used car.

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2. Valuation criteria (b) Reduction only after six months

69. The second question concerns certain 72. It should be noted to begin with that aspects of the criteria for valuing used cars. the old legal position, that is, the position The answer should be confined to those before 15 January 1999, governs the pres- circumstances, provisions of national law ent case. in particular, which are of importance for deciding the main proceedings.

73. Starting from the principle that the real depreciation is what matters, it appears (a) Reference: equivalent new car doubtful whether reducing the value of a new car, for the purpose of ascertaining the value of a used car, only after six months from when it is brought into use or regis- tered complies with the requirements of Article 90 EC.

70. A national provision under which the starting point for ascertaining the basis of assessment is the value of a new car is permissible under certain conditions. Thus only an equivalent vehicle may be used as reference vehicle. 74. Moreover, such a delayed reduction also does not correspond with the results of the study cited by the Finnish Government.

77. As may be seen from the case-law, however, the real depreciation of used cars 'is not linear'. 19 Such an inflexible rule 80. It is still, however, a condition of such must therefore conflict with the principle an — abstract — calculation of value that that the actual depreciation should be taken it may not be discriminatory. 21 The into account. amount of tax resulting from this calcu- lation may not therefore be greater than the 18 — Commission v Greece, cited in note 4, paragraph 22; see also Advocate General La Pergola, in point 5 of his Opinion, who assumes that experience contradicts putting 20 — See Gomes Valente, cited in note 8, paragraphs 24, 25 and a limit of 5% on depreciation. 28. 19 — Commission v Greece, cited in note 4, paragraph 22. 21 — Gomes Valente, cited in note 8, paragraph 26.

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residual amount contained in the value of — the taxable value is determined in such the similar vehicle already registered in the a way that all the essential character- country. istics of the used car are — at least abstractly — taken into account,

81. The transparency or accessibility — referred to by the parties — of such tables in particular and the question whether the unless this leads to the amount of tax practice in this respect at the material time exceeding the amount contained in the satisfied the requirements of Community value of a used car already taxed and on law are not the subject of these proceed- the domestic market, and to the actual ings, as they are not mentioned in the depreciation not being taken into account. questions referred for a preliminary ruling. In this respect I will merely refer to the judgment in Gomes Valente, according to which the criteria on which the table is based must be made public. 22

charged on car tax, namely whether it is to 86. It says that the value added tax charged be classified as value added tax within the on car tax is levied in addition to and meaning of the Sixth Directive and whether independently of value added tax. More- it is compatible with Article 33 of the Sixth over, it is also levied in a case which does Directive and with Article 90 EC. 23 not constitute an acquisition subject to value added tax, namely the purchase of a used car by a consumer in another Member State.

A — Submissions of the parties

87. The Finnish Government further refers to the case-law of the Court on Article 33 84. With respect to the value added tax of the Sixth Directive defining the essential charged on car tax, Mr Siilin takes the view characteristics of value added tax. In that it is value added tax within the contrast to value added tax, the chargeable meaning of the Sixth Directive and conflicts event of the tax on car tax is exclusively the with that directive. Classification as value payment of the car tax. Moreover, the tax added tax is supported by the fact that it is is not charged on the sale of goods or on deductible under Paragraph 102(1)(4) of imports or intra-Community acquisitions. the Arvonlisäverolaki and is a general tax. Finally, it is charged once only. In view of the answer to be given to the fourth question, there is no need to answer the fifth and sixth questions.

85. According to the Finnish Government, the value added tax charged on car tax, 88. On the fifth question, the Finnish despite its name, is neither value added tax Government submits that the tax men- within the meaning of the Sixth Directive tioned in Paragraph 5 of the Autoverolaki nor a turnover tax prohibited under does not fulfil the essential characteristics Article 33 of the Sixth Directive. of value added tax and does not hinder the functioning of the value added tax system applicable within the Community. Rather, 23 — The question raised by the Commission of compatibility it is a tax permitted under Article 33 of the with Articles 23 EC and 25 EC need not therefore be considered further. Sixth Directive.

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B — Opinion Finnish provisions admittedly provide for a possibility of deduction, but the effect of the system is not — as required for value added tax 24 — that the added value is taxed; instead the entire value is taxed. 97. The tax on car tax must be examined in the light of the aspects of Community law raised by the national court.

1. Classification as value added tax within the meaning of the Sixth Directive 101. (b) Next, it is doubtful whether the tax charged on car tax 'applies generally to transactions relating to goods or ser- vices'. 25

98. To begin with, the assessment of the tax charged on car tax cannot depend on the name given to that tax in the Member State in question. Nor is it decisive which law the relevant provision was included in, in this case in the value added tax provi- sions in Law 1501/1993.

102. The tax at issue is general in so far as acquisitions by operators subject to value added tax and acquisitions by final con- sumers are both subject to it. However, the 99. The assessment depends rather on tax on car tax is not payable on goods of all whether the tax at issue displays the char- kinds, but only on certain vehicles. It is thus acteristics worked out in the Court's case- a tax levied on certain goods only, which law. according to the Court's case-law 26 is not to be regarded as a general tax.

103. According to the case-law, taxes under Paragraph 5 of the Autoverolaki — which do not apply to 'all economic trans- only — on the occasion of levying car tax. actions' are also not to be classified as general taxes. 27 That is the case with the tax at issue in so far as it applies only to the charging of the tax levied on the regis- tration of a vehicle. It is thus a tax which depends on the amount owed by the taxable person, namely the car tax pay- 106. (c) Finally, it must be examined able. 28 whether the tax on car tax is, as required for a value added tax, proportional to the value of the goods, that is, the price of the vehicle. 30 In this respect, on the one hand, the Finnish Government is right in so far as not the value of the goods but the car tax forms the basis of taxation, but it is also correct, on the other hand, that the car tax for its part is calculated on the basis of the value of the goods. The tax on car tax is thus based at least indirectly on the value of the goods. 104. In addition, the tax on car tax is due neither on the basis of a supply of goods or services nor on the basis of an importation within the meaning of Article 2 of the Sixth Directive. 107. The tax on car tax therefore in any case does not display all the essential characteristics of a value added tax.

2. Assessment in the light of Article 33 of the Sixth Directive 105. Moreover, the tax on car tax is also not payable — as required for value added tax — at every stage of production and distribution. 29 Rather, the tax is levied

27 — Beaulande, cited in note 24, paragraph 16, and Case C-130/96 Solisnor-Estaleiros Navais [1997] ECR I-5053, 108. It follows from Article 33 of the Sixth paragraph 17. Directive that Community law permits 28 — On the assessment of such a tax, see Case C-318/96 SPAR [1998] ECR I-785, paragraph 25. 29 — On this point, see only Case 295/84 Rousseau Wilmot [19851 ECR 3759, paragraph 15, Case C-437/97 EKW 30 — Rousseau Wilmot, cited in note 29, paragraph 15, Case and Wein Sc Co. [2000] ECR I-1157, paragraph 49, and 252/86 Bergandi [1988] ECR 1343, paragraph 15, and Bozzi, cited in note 24, paragraph 12. Bozzi, cited in note 24, paragraph 12.

31 — Settled case-law since Case 73/85 Kerrutt [1986] ECR 2219. 32 — Giant, cited in note 26, paragraph 9; see also the earlier case Rousseau Wilmot, cited in note 29, paragraph 16. 113. The answer to the fourth and fifth 33 — Bozzi, cited in note 24, paragraph 10. questions is therefore that the Sixth Direc-

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tive is to be interpreted as meaning that a 114. The answer to the sixth question is tax called value added tax such as that at that Article 90 EC is to be interpreted as issue in the main proceedings may not be meaning that the tax called value added tax regarded as value added tax within the is discriminatory as stated in that article in meaning of that directive but as a tax, duty so far as the amount of tax exceeds the or charge which is permitted under amount contained in the value of a used car Article 33 of the directive. present on the domestic market and already taxed.

V I I— Conclusion

115. In conclusion, I propose that the Court answer the questions as follows:

Article 90 EC is further to be interpreted as precluding a national tax provision under which, to determine the taxable value of a used car for the purpose of assessing car tax, the commercial level is to be taken into account, the taxable value is reduced only after six months have elapsed, and the reduction is made in linear fashion in the way applicable in the main proceedings.

(2) The answer to the fourth and fifth questions is that the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment — is to be interpreted as meaning that a tax called value added tax such as that at issue in the main proceedings may not be regarded as value added tax within the meaning of that directive but as a tax, duty or charge which is permitted under Article 33 of that directive.

The answer to the sixth question is that Article 90 EC is to be interpreted as meaning that a tax called value added tax such as that at issue in the main proceedings is discriminatory as stated in that article in so far as the amount of tax exceeds the amount contained in the value of a used car present on the domestic market and already taxed. I - 7516