Opinion of Advocate General Tesauro

Mr President,

Members of the Court,

1. In these proceedings the Commission seeks a declaration from the Court that, by applying differentiated tax rules to motor vehicles, and in particular by using different rules to calculate the basis of assessment for the special consumption tax, so that imported vehicles are more heavily taxed than those assembled in Greece, the Hellenic Republic has failed to fulfil its obligations under Article 95 of the EEC Treaty.

2. Law No 363/1976, as supplemented and amended by Laws Nos 1003/1979 and 1591/1986, introduced in Greece a special consumption tax on passenger vehicles which are imported or manufactured (assembled) in Greece (hereinafter the tax).

3. The Commission, in its criticism of the legislation described above, states in particular that such a differentiated system for calculation of the taxable basis favours motor vehicles assembled in Greece, at the expense of those imported from other Member States, thus infringing the prohibition of discriminatory taxation laid down by Article 95 of the EEC Treaty.

4. The Greek Government contends, on the other hand, that its taxation system does not favour Greek products to the detriment of those imported from other Member States.

5. Let me point out immediately that the Court of Justice has consistently held that within the system of the Treaty, Article 93(1) and (2) supplement the provisions on the abolition of customs duties and charges having equivalent effect. The aim of those provisions is to ensure the free movement of goods between the Member States under normal conditions of competition by the elimination of all forms of protection which may result from the imposition of internal taxation which discriminates against products from other Member States. Article 95 is intended to guarantee the absolute neutrality of internal taxation as regards competition between domestic and imported products.

6. The foregoing principles must therefore be applied in considering whether the legislation at issue is compatible with Article 95 of the Treaty.

7. The foregoing considerations seem to me to show with sufficient clarity that the different systems of calculating the basis of assessment used in Greece for domestic products and imported products mean that the latter are taxed more heavily than similar domestic products and that in any event the system is so devised that discriminatory effects on imported products cannot be ruled out.

8. As regards the defendant's further contention that the detailed rules for calculation of the basis of assessment which I have described are needed in order to obviate the risk of fraud by traders, which is particularly serious because of the high rates of consumption tax, I would point out in the first place that, as laid down in the case-law of the Court, disparate treatment as between the imported product, which is taxed at a flat rate, and products produced locally, on which the tax is levied according to a sliding scale, cannot be justified on the ground that the investigations which would be necessary in the former case cannot be carried out;secondly, Article 95 of the Treaty is applicable even if, in order to eliminate the obstacle created by the internal tax, that tax would have to be abolished.

9. In view of the foregoing considerations, therefore, I suggest that the Court uphold the Commission's application and order the defendant to pay the costs.

1 Original language: Italian.

2 See in particular the judgments in Case 168/78 Commission v France [1980] ECR 347, paragraph 4, Case 169/78 Commission v Italy [1980] ECR 385, paragraph 4, and Case 171/78 Commission v Denmark [1980] ECR 447, paragraph 4.

3 Judgments in Case C-47/88 Commission v Denmark [1990] ECR I-4509, paragraph 18, Case 55/79 Commission v Ireland [1980] ECR 481, paragraph 8, and Case 74/76 lannelli & Volpi v Meroni [1977] ECR 557, paragraph 21.

4 Judgment in Case 45/75 REWE v Hauptzoüamt Landau [1976] ECR 181, paragraph 16.

5 Judgment in Case 20/76 Schüttle v Finanzamt Freudenstadt [1977] ECR 247, paragraph 22.

6 Judgments in Case C-152/89 Commission v Luxembourg [1991] ECR I-3141, Case C-153/89 Commission v Belgium [1991] ECR I-3171, and Case 45/75, cited above, paragraph 15.

7 Cited above, paragraphs 24 and 25.

8 Cited above, paragraphs 15 and 16. See also, with reference to Article 96 of the Treaty, the judgment in Case 45/64 Commission v Italy [1965] ECR 857.

9 The Commission points out that until 1986 the addition in question was only 10%.

10 Case 45/75, cited above, paragraph 15.

11 Case 20/76, cited above, paragraph 22.