Opinion of Mr Advocate General Darmon

Mr President,

Members of the Court,

1. By the present actions the Commission is seeking declarations that the Netherlands and Ireland have failed to fulfil their obligations under the Sixth Council Directive of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (Official Journal, L 145 of 13 June 1977, p. 1). The Commission complains that after the entry into force of that directive they retained unaltered a tax system, applicable to transactions involving the sale of new goods where secondhand goods of the same kind are accepted in part exchange, whose effect is to reduce by an amount equal to the value of the goods accepted in part exchange the amount by reference to which VAT is charged on the sale of the new goods.

2. Those two provisions thus have the same tax effect, namely to reduce the amount on which VAT is payable in respect of the sale of the new goods by the value of the goods taken in part exchange by the taxable person.

3. In relation to secondhand goods, the first paragraph of Article 32 of the Sixth Directive provides for the adoption by the Council of a taxation system to be applied to used goods, works of art, antiques and collectors' items. The basic elements and principles of such a system were the subject of proposals made by the Commission both in the course of the adoption of the Sixth Directive itself (Proposal for a Sixth Directive, Doc. COM(73)950 final of 20 June 1973) and subsequently with a view to the adoption of the system referred to in that article (Proposal for a Seventh Directive, submitted to the Council on 11 January 1978, Official Journal, C 26 of 26 February 1978, p. 2). Since the Council did not set up that system by the date provided for, namely 31 December 1977, the matter is still governed, transitionally, by the second paragraph of Article 32, which provides :

4. Before considering the substance of the case, it is necessary to deal with the submission put forward by the Netherlands in Case 16/84 that the Commission's action is inadmissible.

5. According to the Commission, in providing that the taxable amount for new goods is to be arrived at after deducting the value of secondhand goods taken in part exchange, the aforesaid national provisions conflict with the definition contained in Article 11 A of the Sixth Directive, which is as follows:

6. In contrast to the Commission, the Member States concerned maintain that there is no need to inquire whether the system of deduction provided for by their legislation is compatible with the aforementioned provisions of Article 11 of the Sixth Directive.

7. In view of the complexity of the arguments put forward by the parties, I shall endeavour, by repeating certain points, to define more precisely the issues raised in this case.

8. The need for special taxation treatment of secondhand goods arises from the special nature of the sales history of such goods. To describe the different stages thereof I shall take the case of a secondhand vehicle sold by its owner to a garage on the purchase of a new vehicle.

9. I must therefore undertake a comparative analysis of those three methods and compare them further with the situation which would result from a straightforward application of the Sixth Directive in the absence of a special system within the meaning of Article 32.

10. Thus, compared with the two systems recommended by the Commission, the method applied by the two Member States affects neither the sale price of the new vehicle (IRL 11000) nor the resale price of the secondhand vehicle (IRL 6160) nor, therefore, the distribution of the tax burden between the purchaser of the new vehicle and the purchaser of the secondhand vehicle nor, finally, the total amount of VAT (IRL 1060) collected for the State by the taxable person. It is therefore completely neutral.

11. In view of all those considerations my opinion is:

1 Translated from the French.