Free Movement of Goods - Taxation Flashcards
Two provisions in Art 110 TFEU
- Cannot impose internal taxation in excess of that imposed on similar domestic products.
- Cannot impose internal taxation to afford INDIRECT protection to other products.
When is Art 110(1) and (2) applied
(1) - similar products
(2) - not similar but in competition
Original test for whether products are similar (case)
Fink-Frucht - if they came within same tax classification.
Initial attitude toward the distinction between Art 110(1) and (2) (case)
Commission v France - did not feel it necessary.
Focus was on whether tax was discriminatory/protective.
Why is distinction between Art 110(1) and (2) important?
Response required is different - breach of (1) requires equalisation of Taxes, while (2) requires removing protective effect of taxes.
Commission v Denmark (facts and law)
fruit wine vs grape wine
TWO STAGE TEST FOR SIMILARITY
- Objective characteristics:
(a) origin
(b) method of manufacture
(c) organoleptic properties - Are they equally capable of meeting the same need from perspective of consumers?
Facts in Johnnie Walker
Whiskey v Fruit liqueur wines
Alc content and manufacturing processes were different - failed Comm v Denmark
Apply 110(2)
How does fiscal autonomy work into the equation for Art 110? (name two cases)
Tax is compatible with Art 110 as long as it excludes ‘any possibility’ of preferential taxation for domestic products. (Dounias)
Tax arrangements based on objective criteria are allowed (Johnnie Walker)
Examples of Direct Discrimination for 110(1)
Comm v Italy - lower taxes on one type of oil domestically but not imported.
Comm v Ireland - domestic procedures were more lenient as regards payment. procedures for domestic and non domestic goods must also be equal
Can MS provide justification for direct discriminatory breach? (case)
No (Tobacco)
Example of indirect discrimination (case)
Humblot - car tax for cars above 16CV, and no French cars were rated above it.
Commission v Greece facts and law
Imposed higher tax on higher cylinder capacity cars for valid environmental reason. Only discriminatory if discouraged customers from buying imported cars.
Chemical Farmaceutici facts
Taxed synthetic alcohol more than fermented alcohol.
Wanted to preserve ethylene for more important economic uses both internally and externally. Held valid justification.
Two conditions for justification for indirect discriminatory breach of Art 110(1)
- Legitimate objective
2. Completed in proportionate manner
Beer and Wine case (110(2))
TEST for products in competition - cross-elasticity of demand:
If one product’s price changes, would consumers switch to the other?
Consumer needs identified - Quench thirst and accompany a meal. Interchangeable, and satisfied the test.
