Free Movement of Goods - Art 110

Question 1

Article 110 TFEU

Answer 1

Discriminatory Internal Taxation - Fiscal

Question 2

What does Art 110 say (roughly)?

Answer 2

“no Member State shall impose directly/ indirectly, internal taxation on similar domestic products of other Member States”

Question 3

Case 90/79 EC v France

Answer 3

A genuine internal tax is a general system of internal dues applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products.
If internal tax does not comply, it will be prohibited

Question 4

Case 27/67 Fink-Frucht

Answer 4

ECJ provided goods would be ‘similar’ if they came within the same tax classification, but they do not need to be the ‘same’ product

Question 5

Case 170/78 Commission v UK

Answer 5

Appropriate test = whether or not a consumer might substitute one product for the purpose he had in might

Question 6

Case 168/78 Commission v France

Answer 6

Characteristics for the test were considered to be things such as composition, physical characteristics and consumer usage

Question 7

Article 110(1)

Answer 7

Discrimination against similar foreign goods - there cannot be discriminatory taxation of similar products

Question 8

Commission v France [2002]

Answer 8

Art 110(1) looks at the criteria of necessity and proportionality.
- here, petroleum products were of fundamental importance to French existence and the survival of inhabitants heavily depended upon them

Question 9

Commission v Italy (Bananas) 184/85

Answer 9

Art 110(1)

• CJ had to determine whether bananas were ‘similar’ fruit
• took into account the objective characteristics of bananas and other fruit
• looked at extent to which they could satisfy the sane consumer need
• not similar

Question 10

Michel Humblot 112/84

Answer 10

Art 110(1)

• different car tax levels due to the power of the vehicle
• if went over 16CV then would be a 5000£ charge but no French car produced power over this level
• this would therefore only happen to imported cars
• indirectly discriminatory

Question 11

Article 110(2)

Answer 11

Discrimination against competing foreign goods - outlaws internal taxes that grant indirect protection to domestic goods

Question 12

2 part test for Article 110(2) to apply

Answer 12

1) relevant products must be in a competitive relationship - concerns substitutability
2) if products compete with each other, the tax may not protect the domestic product

Question 13

Case 170/78 Commission v UK - pt 1

Answer 13

concerning 110(2) pt 1:

• tax imposed on wine was more than 4 x higher than tax on beer
• wine and beer not similar enough to fall under 110(1), but were SUBSTITUTABLE enough for consumers to be in competition with each other in the meaning of Art 110(2) as consumers can switch from beer to wine

Question 14

Case 170/78 Commission v UK - pt 2

Answer 14

concerning 110(2) pt 2:
- the much higher taxes on wine did protect the domestic beer, and was therefore prohibited under 110(2) as tax difference was so high that it affected consumer choices and the tax difference could not be objectively justified on any ground

Question 15

For Art 110(2) to apply

Answer 15

a real protective effect must be shown, the mere existence of a difference in tax rate is not enough as M/S can differentiate their taxes on different products with an objective criteria