Court of Justice of the European Communities (including Court of First Instance Decisions)

(Failure of Member State to fulfil obligations Article 90 EC Registration tax on imported second-hand cars Determination of taxable value Depreciation of vehicles based solely on age Publicising of criteria of calculation Possibility of challenging the application of the fixed method of calculation)

In Case C-74/06,

ACTION for failure to fulfil obligations under Article 226 EC, brought on 8 February 2006,

Commission of the European Communities, represented by D. Triantafyllou, acting as Agent, with an address for service in Luxembourg,

applicant,

Hellenic Republic, represented by P. Mylonopoulos and K. Boskovits, acting as Agents, with an address for service in Luxembourg,

defendant,

composed of K. Lenaerts (Rapporteur), President of Chamber, E. Juhász, G. Arestis, J. Malenovský and T. von Danwitz, Judges,

Advocate General: P. Mengozzi,

Registrar: L. Hewlett, Principal Administrator,

having regard to the written procedure and further to the hearing on 18 April 2007,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

1. By its application, the Commission of the European Communities asks the Court for a declaration that by applying, for the purpose of determining the taxable value of second-hand cars imported into Greek territory from another Member State, a single criterion of depreciation based on the age of the vehicle and by adopting a reduction in value of 7% for vehicles between 6 and 12 months old or of 14% for cars more than 1 year old, which does not ensure that the tax due does not exceed, even if only in certain cases, the amount of the residual tax incorporated in the value of similar second-hand cars already registered on the national territory, while the basis for calculating depreciation is not made known to the public and the examination of vehicles by experts is subject to the payment of a fee of EUR 300, the Hellenic Republic has failed to fulfil its obligations under Article 90 EC.

National law

2. Article 126(1)(a) of Greek Law 2960/2001 on the national customs code (FEK [Greek Official Journal] A' 265), as amended by Greek Law 3156/2003 (FEK A' 157, 'Law 2960/2001'), determines taxable value for the purposes of the registration tax on imported second-hand cars in the following manner:

'...

As regards second-hand passenger vehicles, there shall be taken into account ... the wholesale price of a corresponding vehicle when put into circulation on the international market, that price being reduced, to reflect wear caused by normal use or in any other way, in accordance with the following depreciation percentages:

Between 6 and 12 months from the date when the vehicle is first put into circulation, provided that the vehicle has covered more than 6 000 kilometres, depreciation of 7%.

From 1 to 2 years inclusive 14%
Between 2 and 3 years inclusive 21%
Between 3 and 4 years inclusive 28%
Between 4 and 5 years inclusive 34%
Between 5 and 6 years inclusive 40%
Between 6 and 7 years inclusive 46%
Between 7 and 8 years inclusive 52%
Between 8 and 9 years inclusive 57%
Between 9 and 10 years inclusive 62%
Between 10 and 11 years inclusive 67%
Between 11 and 12 years inclusive 70%
Between 12 and 13 years inclusive 73%
Between 13 and 14 years inclusive 76%
Between 14 and 15 years inclusive 79%
Between 15 and 16 years inclusive 80%.'

3. Article 126(5) of Law 2960/2001 provides that, if the owner of a second-hand passenger vehicle disputes the amount of the registration tax calculated in accordance with the depreciation scale set out in Article 126(1)(a), the taxable value is to be determined by a committee of experts, acting as a complaints commission, in such a way that the registration tax payable is equal to the amount of the residual tax incorporated in the value of a vehicle of the same make, same model, and propulsion system, or failing such a vehicle, of a similar or equivalent vehicle which was put into circulation in Greece in the course of the same year as that in which the vehicle concerned was first put into circulation in another Member State of the European Union. The complaints commissions who examine the actual condition of the vehicles are based at the offices of customs districts and are made up of a representative of the customs district, a representative of the Ministry of Transport and Communications and the vehicle owner or his agent. Before a complaints commission can instruct expert examination of the vehicle, the vehicle owner must pay a fee the amount of which is set at EUR 300.
4. Decree F.112/50 of the State Secretary for Economic Affairs and Finance, of 27 January 2004 (FEK B' 207), sets out the factors to enable the complaints commissions established by Article 126(5) of Law 2960/2001 to assess the actual condition of second-hand passenger vehicles. Article 2(b) and (c) of that Decree provide that the complaints commission is to:

'(b) analyse the mechanical condition of the vehicle by checking the chassis/bodywork, the engine, the battery, the electrical system, the condition of the tyres and assess whether each is in working order, and, as regards the external appearance of the vehicle concerned, check the type and condition of the paintwork;

(c) check the general condition of the vehicle in relation to its use and maintenance, the quality of the internal upholstery and more generally of the interior of the passenger compartment, the mileage recorded on the odometer, the condition of the security belts and the quality of accessories installed in the vehicle, in particular the air-conditioning, radio, computer, alloy wheels, airbags, anti-theft system, opening roof, automatic gearbox, ABS and EBV braking systems, EDS, ASR, ESP drive power and of other accessories essential to determine the commercial value of the vehicle.'

Pre-litigation procedure

5. The Court held in Case C-375/95 Commission v Greece [1997] ECR I-5981 that the Hellenic Republic had failed to fulfil its obligations under Article 95 of the EC Treaty (now, after amendment, Article 90 EC) by determining, for the application of the special consumer tax and the flat-rate added special duty, the taxable value of imported second-hand cars by reducing the price of equivalent new cars by 5% for each year of age of the vehicles concerned, subject, as a rule, to a maximum reduction of 20%.
6. In order to comply with that judgment, in 1999, 2001 and 2003 the Hellenic Republic reformed its system of taxation of the vehicles concerned by replacing the charging of the special consumer tax and flat-rate added special duty with the charging of a registration tax and by revising the method of calculation of the taxable value of such vehicles. In 2003, complaints commissions were established to hear any disputes arising out of the application of that legislation.
7. The Commission, however, considered that, as thus amended, the Greek legislation applies a scale which is based on a single criterion of vehicle depreciation (how long the vehicle had been in use at the taxable date) which does not reflect the actual depreciation with sufficient precision to avoid any risk of imported second-hand vehicles being subject to a tax which exceeds the amount of the residual tax incorporated in the value of similar second-hand vehicles already registered in Greece. The Commission considers that that scale, which entails, even if only in certain cases, the charging of a higher tax on imported vehicles, is contrary to Article 90 EC.
8. A letter of formal notice criticising that legislation was sent by the Commission to the Hellenic Republic on 24 April 2004, and that was followed, on 9 July 2004, by a complementary letter of formal notice which took account of the setting up of the complaints commissions. On 13 July 2005, following the Member State's response, the Commission issued a reasoned opinion. The Commission considered that the response of the Hellenic Republic to that opinion was not satisfactory, and decided to bring the present proceedings.

The action

Arguments of the parties

9. According to the Commission, the Hellenic Republic has failed to fulfil its obligations under Article 90 EC by applying, for the purpose of determining the taxable value of imported second-hand cars, a single criterion of depreciation based on age. The system is not such as to exclude any possibility, even if only in certain cases, of imported products being taxed more heavily than national products.
10. Although the depreciation scale established by the Greek legislation as amended in 2003 allows a closer approximation of the actual value of second-hand cars, the scale nevertheless cannot be considered to provide the necessary degree of precision. In practically all cases, it is not a realistic approach to the actual loss in value to take into consideration depreciation of 7% for vehicles the age of which varies between 6 and 12 months or 14% for vehicles more than 1 year old. The scale should be based on more rapid depreciation covering all vehicles. It is not obvious from the Greek legislation in question that criteria other than age, such as those proposed in the case-law of the Court, are taken into account.
11. In addition, the Greek legislation is not in conformity with the case-law of the Court to the effect that, where a Member State applies to second-hand vehicles imported from other Member States a system of taxation under which the actual depreciation of the vehicles is defined in a general and abstract way on the basis of criteria laid down by national law, the first paragraph of Article 90 EC requires that system of taxation to be structured in such a way, making allowance for the reasonable approximations inherent in any system of that type, as to exclude any discriminatory effect.
12. It is evident from the case-law that it is essential to publicise the criteria on which the fixed method of calculating vehicle depreciation is based in order to mitigate the lack of transparency in the taxation system in question. The Greek Government has officially refused to divulge to the Greek Union of Automobile Traders and Importers any information as to the taxable values currently adopted. In that regard, it is not sufficient to publish the general criteria, linked to age; it is also necessary that there be made public the tables of fixed values which are established in accordance with those criteria. The lack of such publicity entails a risk that the authorities may set the taxable value arbitrarily. The Commission considers moreover that, in the same way that legislation attaches objective values to real estate, it would be appropriate to set up a similar system for vehicles. On that point, the Commission refers to the prices published in the magazines of automobile clubs to illustrate the possibility of establishing reference tables for the value of second-hand vehicles.
13. The Commission adds that it has not at any time insisted that prices charged by a particular distributor be made public and accordingly dismisses the contention that sale prices are protected by professional and administrative confidentiality or that it is theoretically possible that a private citizen might ask the competent authorities to inform him of the sale prices.
14. Further, while the Commission states that it approves of the setting up of complaints commissions, the Commission claims, first, that as long as the method of calculation of taxable value, based on a scale using a single criterion, remains unchanged, the procedure before those commissions does not enable the defects of that method of calculation to be remedied and makes no contribution to meeting the requirement that the amount of the tax should not, even if only in certain cases, exceed the amount of the residual tax incorporated in the value of similar vehicles already registered in Greece. Recourse to the complaints commissions should be limited to cases where marginal errors in applying a properly designed system can, exceptionally, be corrected, and should not be a substitute for a defective system. Secondly, the Commission claims that the obligation to pay a fee amounting to EUR 300 is likely to deter persons liable to tax from resorting to the complaints procedure. As a consequence of the lack of transparency in the system set up by the legislation which determines the amount of tax and of the fee to be paid in order to initiate the complaints procedure, the latter is, in practice, unproductive and ineffective, as is evidenced by the small number of complaints submitted.
15. The Hellenic Republic disputes that its system of taxation of imported second-hand vehicles constitutes a failure to fulfil its obligations under Article 90 EC.
16. First, the system does incorporate the greater part of the criteria required by the case-law. In order to determine the condition as affected by age and, consequently, the depreciation of the vehicle to be adopted for the purpose of establishing its taxable value, account is taken, first, of wear caused by normal use or in any other way together with, as regards vehicles the age of which varies between 6 and 12 months, the number of kilometres covered and, secondly, of the type of vehicle, since the wholesale price used as the basis of calculation is determined by the lists of prices submitted to the customs authorities by the official distributors of vehicles, which are worked out according to engine capacity and make.
17. In the view of the Hellenic Republic, the Commission's position is based on the requirement that there should be a number of criteria, but beyond that there is no specification as to how those criteria should appropriately be combined and no account is taken of the fact that no legislatively-defined criterion can have any absolutely precise correspondence with the actual depreciation of a vehicle. Further, that requirement might lead to the application of complicated systems of calculation which would be likely to hinder the importation of second-hand vehicles.
18. The Hellenic Republic submits further that the present system has encouraged the importation of second-hand vehicles, the numbers having trebled between 2002 and 2005, which shows that the system is a realistic and objective approach to the depreciation of such vehicles.
19. As regards, secondly, the alleged failure to publicise the criteria by which the taxable value is established, the Hellenic Republic contends, first of all, that the information to be found in customs documents is covered by administrative confidentiality and that to make known to third parties the lists of wholesale prices submitted by automobile distributors would infringe both administrative and business confidentiality. Further, the criteria of depreciation of second-hand vehicles and the factors which enable the complaints commissions to assess their actual condition are published and are accessible to the public in full. Before customs clearance of an imported vehicle, the owner may request the Ministry of Finance to inform him of all the factors influencing the determination of the taxable value of that vehicle.
20. Moreover, retail prices published in magazines are indicative only, and cannot therefore represent a reliable, fixed point of reference. Those prices could, however, be taken into account by a complaints commission in the event that a vehicle owner claimed that there was a substantial difference between those prices and the value adopted on customs clearance.
21. The Hellenic Republic challenges the relevance of the Commission's proposal that reference tables of values be published, by analogy with the fixed values established for real estate. In the latter case, those values do not reflect the average prices as defined by the market but legislation which refers to taxable values established following evaluations carried out by the competent tax authorities. Moreover, the Commission is urging the Member State to make public an average of the market prices set by retail traders, when the Greek system is based on the wholesale price.
22. Thirdly, in relation to the possibility of challenging the application of the fixed method of calculation before the complaints commissions, the Hellenic Republic contends that the setting up of those commissions, in conjunction with the application of an objective scale of depreciation, is intended to avoid, in all cases, the charging of a registration tax which infringes Article 90 EC. The Greek legislation is consistent with the case-law, according to which the fact that the owner of an imported vehicle has the possibility of challenging the application of the fixed scale to his vehicle, by demonstrating that it leads to taxation higher than the amount of the residual tax incorporated in the value of similar second-hand vehicles already registered in the national territory, will prevent any possible discriminatory effects of a system of taxation based on such a scale. The setting up of the complaints commissions is a response, moreover, to the requirements set out by the Commission in its Proposal for a directive on passenger car related taxes (COM(2005) 261 final), in particular to the conditions specified in Article 10(3) of that proposed directive on scales of values.
23. Lastly, as regards the fee of EUR 300 charged by the authorities for the expert examination of a vehicle to be carried out by a complaints commission, that fee will not deter any person liable to tax from bringing a complaint before such a commission to support his claim that his vehicle should be assessed as subject to higher depreciation if that person has genuine reason to think that the vehicle's value has been overestimated by the customs authorities. The small number of cases brought before the complaints commissions demonstrates that the Greek legislation enables the objectives laid down by the case-law of the Court to be achieved.

Findings of the Court

24. In relation to the taxation of imported second-hand vehicles, the Court has held that Article 90 EC seeks to ensure the complete neutrality of internal taxation as regards competition between products already on the domestic market and imported products (see, inter alia, Case C-387/01 Weigel [2004] ECR I-4981, paragraph 66; Joined Cases C-290/05 and C-333/05 Nádasdi and Németh [2000] ECR I-10115, paragraph 46; and Case C-313/05 Brzeziński [2007] ECR I-0000, paragraph 28).
25. It is settled case-law that the first paragraph of Article 90 EC is infringed where the taxation on the imported product and that on the similar domestic product are calculated in a different manner on the basis of different criteria which lead, even if only in certain cases, to higher taxation being imposed on the imported product (see, inter alia, Commission v Greece, paragraph 20, and the case-law cited there; Case C-393/98 Gomes Valente [2001] ECR I-1327, paragraph 21; and Case C-101/00 Tulliasiamies and Siilin [2002] ECR I-7487, paragraph 53).
26. The Court has thus held that the first paragraph of Article 90 EC is infringed when a Member State charges on second-hand vehicles from another Member State a tax the amount of which, calculated without taking the vehicle's actual depreciation into account, exceeds the amount of the residual tax incorporated in the value of similar second-hand vehicles already registered in the national territory (Case C-345/93 Nunes Tadeu [1995] ECR I-479 paragraph 20, and Gomes Valente, paragraph 23).
27. In applying Article 90 EC, and in particular when comparing the taxes applicable to imported second-hand cars with those applicable to second-hand cars purchased at home, which are similar or competing products, it is necessary to have regard not only to the rate of direct or indirect internal taxation on domestic or imported products but also to the basis of assessment and the detailed rules for levying the tax in question (see Case 74/76 Iannelli & Volpi [1977] ECR 557, paragraph 21; Case C-47/88 Commission v Denmark [1990] ECR I-4509 paragraph 18; and Nunes Tadeu, paragraph 12).
28. More specifically, a Member State may not charge tax on imported second-hand motor vehicles based on a value which is higher than the real value of the vehicle with the result that they are taxed more heavily than similar second-hand cars on the domestic market (see, to that effect, Commission v Denmark, paragraph 22). The taxable value imputed to the imported second-hand vehicle by the revenue authorities should faithfully reflect the value of a similar second-hand vehicle already registered on the domestic market (see, inter alia, Weigel, paragraph 71).
29. In that regard, the Court has held that the taking into account of the actual depreciation of the vehicles need not necessarily involve an assessment or expert examination of each of them. To avoid the administrative burden inherent in such a system, a Member State may establish, by means of fixed scales determined by statute, regulation or administrative provision and calculated on the basis of criteria such as a vehicle's age, mileage, general condition, propulsion method, make or model, a value for second-hand vehicles which, as a general rule, would be very close to their actual value (Gomes Valente, paragraph 24, and Weigel, paragraph 73).
30. Such scales must, in any case, take account of the fact that the annual depreciation in the value of cars is in general considerably more than 5%, that that depreciation is not linear, especially in the first years when it is much more marked than subsequently, and that vehicles continue to depreciate more than four years after being put into circulation. Moreover, a vehicle starts to depreciate as soon as it is purchased or brought into use (see, to that effect, Commission v Greece, paragraph 22, and Tulliasiamies and Siilin, paragraph 78).
31. According to settled case-law, in order for a system of taxation of imported second-hand cars which takes into account the actual depreciation of the vehicles on the basis of general criteria to be compatible with Article 90 EC, it must be structured in such a way, making allowance for the reasonable approximations inherent in any system of that type, as to exclude any discriminatory effect (Gomes Valente, paragraph 26; see also, to that effect, Commission v Greece paragraph 29, and Brzeziński, paragraph 40).
32. In the present case, it must be observed, first, that the Greek system of registration tax on imported vehicles is based on the wholesale price of the vehicle corresponding to the vehicle concerned current at the time when the latter was put into circulation on the international market. That price is reduced, to take account of wear caused by normal usage or in any other way, by the application of a depreciation percentage which varies according to the age of the vehicle. Mileage is taken into account only as concerns vehicles between 6 and 12 months old, insofar as only vehicles which have covered more than 6 000 kilometres have depreciation of 7% applied to them.
33. As regards, first, the basis for calculation of the taxable value, the Court considers that while, as suggested by the Commission, the authorities of a Member State may refer to a guide indicating the average prices of second-hand vehicles in the national market or to a list of average current prices used as a reference in the sector (Gomes Valente, paragraph 25, and Weigel, paragraph 74), the Hellenic Republic cannot be criticised for taking as a basis the wholesale price of the corresponding vehicle current at the time when the imported vehicle was put into circulation on the international market.
34. The Court has held, in the context of assessing the compatibility of national legislation with Article 90 EC, that national legislation may take the value of a new vehicle as the basis for determining the taxable value of an imported second-hand vehicle, provided that the vehicle used as a reference for calculating the tax on an imported second-hand car is a similar vehicle, which implies that account must be taken of the model, type and other characteristics such as propulsion method and equipment (see, to that effect, Tulliasiamies and Siilin, paragraphs 73 to 76).
35. It is common ground that the wholesale prices of motor cars are determined by automobile manufacturers and are to be found in the official catalogues distributed by them. The Hellenic Republic stated at the hearing, and was not contradicted by the Commission, that those prices take account of engine capacity and the make of the vehicle concerned and also certain technical features, such as propulsion method, engine power, number of cylinders and number of car doors.
36. As regards, secondly, the depreciation scale, as stated in paragraph 30 of this judgment, the depreciation of a vehicle starts as soon as it is purchased or put into use. Moreover, the Court has held that the charging on imported second-hand vehicles of a registration tax for which the basis of assessment is at least 90% of the value of the vehicle when new constitutes generally manifest overtaxation of those vehicles in comparison with the residual registration tax in the case of previously-registered second-hand cars bought on the national market, whatever their age or condition (see, to that effect, Commission v Denmark, paragraph 20).
37. As observed in paragraph 29 of this judgment, the Court has set out, without intending the list to be exhaustive or obligatory, the objective criteria on which a fixed scale may be based. The Court has thus referred to the age of the vehicle, but also to its mileage, its general condition, its propulsion method, its make or model.
38. In the present case, it is common ground that the Greek legislation makes provision for depreciation only from when the vehicle is six months old and has covered more than 6 000 kilometres. It follows, first, that the Hellenic Republic applies to second-hand cars imported from another Member State a system of taxation under which the tax due is equal to the tax chargeable on a similar new vehicle for the first six months counting from the date when those cars are put into circulation, whatever the number of kilometres covered. The same is true for imported second-hand cars between 6 and 12 months old which have covered less than 6 000 kilometres.
39. Second, although the wholesale price which serves as the basis for the evaluation of imported second-hand cars does take account of the type of the vehicle, that is to say, of engine capacity, model and other technical features such as propulsion method, it is nevertheless clear that the scale of depreciation which is then applied in order to determine the taxable value is based on a single criterion, namely the age of the vehicle. Just because there is a condition that the vehicle should have covered more than 6 000 kilometres if it is between 6 and 12 months old does not mean that the scale should be regarded as taking the mileage of a vehicle into account, especially since that represents a threshold of use below which no depreciation is applied if the vehicle is less than a year old.
40. However, where a vehicle is used intensively in its first few years, wear and, accordingly, depreciation will be much more significant than where the vehicle is subject to so'called 'normal' use. Since the legislation at issue does not take mileage into account in the calculation of depreciation of such a vehicle, the rate of depreciation corresponding to its age will be applied to it. In that event, the value of the vehicle concerned, which is the basis of the registration tax, will obviously be set at an overly high level, and that will lead to the charging of a tax the amount of which, calculated without taking into account the actual depreciation of the vehicle, will exceed the amount of the residual tax incorporated in the value of similar second-hand vehicles already registered on national territory.
41. Contrary to the Hellenic Republic's assertion, the fact that, in such cases of intensive use of a vehicle, it is open to the owner to challenge the application of the fixed scale is not sufficient to prevent a system of taxation from contravening Article 90 EC.
42. As is clear from paragraph 29 of this judgment, while a Member State may avoid the administrative burden of an assessment system based on the expert examination of each vehicle by resorting to a fixed scale, such a scale must nevertheless enable a value to be established for second-hand vehicles that will, as a general rule, be very close to their actual value.
43. It follows from the foregoing that, given the failure to take account of mileage, the scale adopted by the legislation at issue does not, as a general rule, lead to a reasonable approximation of the actual value of imported second-hand vehicles.
44. In such circumstances the argument put forward by the Hellenic Republic to the effect that the increase in the number of imported second-hand passenger vehicles proves that the legislation at issue has not had a deterrent effect on imports cannot be accepted. That increase does not establish that the taxation system at issue enables, in accordance with the case-law cited in paragraph 29 of this judgment, a value to be established for second-hand vehicles that will, as a general rule, be very close to their actual value.
45. Moreover, regardless of the case of vehicles which have been subject to intensive use in their first years in circulation, the Commission argues that the way in which certain aspects of the Greek taxation system are structured does not ensure the absence of any discriminatory effect.
46. In that regard, firstly, for such a system to be compatible with the first paragraph of Article 90 EC, the criteria on which the fixed method of calculating the depreciation of vehicles is based must be made known to the public (Tulliasiamies and Siilin, paragraph 87).
47. In the present case, it must be pointed out that the criteria for calculating the depreciation of second-hand passenger vehicles are mentioned in Article 126(1) of Law 2960/2001 and the factors to enable the complaints commissions to assess the actual condition of the vehicles presented to them are set out in Article 2 of Decree F.112/50 of the State Secretary for Economic Affairs and Finance of 27 January 2004.
48. Further, even if, as the Hellenic Republic argues, divulging to third parties the wholesale price lists submitted to the customs authorities by automobile distributors would infringe administrative and business confidentiality, it is clear from the replies to questions put by the Court at the hearing that, in accordance with Article 5(2) of Law 2960/1999 establishing the Code of Administrative Procedure, any person who has a legitimate interest may, on request, be given access to private documents held by the public authorities relating to a case involving that person which is pending before, or which has been dealt with by, those authorities. Thus, a person may obtain from the competent authorities the wholesale price which will serve as the basis for the determination of the value of the vehicle.
49. Since the wholesale price must be regarded as being brought to the knowledge of the public in that way, the Commission's argument that it should be replaced by the prices published in the magazines of automobile clubs cannot succeed. In that regard, as stated by the Hellenic Republic, without being challenged by the Commission, in the event that a person liable to tax notes a substantial difference between the indicative retail sale prices to be found in such magazines and the value adopted during the customs clearance of his vehicle, and appeals to the complaints commission, the prices published in the press will be taken into account so that, in accordance with the Greek legislative provisions, the registration tax due will not be higher than the amount of the residual tax incorporated in the value of similar vehicles already registered on Greek territory.
50. Secondly, the compatibility with Article 90 EC of a system of taxation of imported second-hand vehicles which takes account of the actual depreciation of the vehicles on the basis of general criteria presupposes that the owner of such a vehicle is able to challenge the application of such a fixed method of calculation to the vehicle in order to demonstrate that it leads to taxation exceeding the amount of the residual tax incorporated in the value of similar used vehicles already registered in the national territory (Tulliasiamies and Siilin, paragraph 88).
51. In setting up the complaints commissions the Greek legislature intended to comply with the case'law of the Court.
52. The Commission claims however that the complaints procedure does not provide a real possibility of challenging the fixed method of calculation, since the person liable to the tax must pay a fee of EUR 300, an amount which, with regard to the tax due, is likely to be a disincentive to appealing to a complaints commission.
53. It must be held that such a fee is likely to deter a car owner from appealing to a complaints commission only if it represents a significant proportion of the amount of the registration tax challenged.
54. In that regard, the Hellenic Republic stated at the hearing that the rate of registration tax varies according to the engine capacity of the vehicle in question. Thus, the registration tax equals 20% of the taxable base for a vehicle with a capacity from 1 000 up to 1 600 cm³, 30% for a vehicle with a capacity from 1 601 up to 1 800 cm³, 40% for a vehicle with a capacity from 1 801 up to 2 000 cm³ and 50% for a vehicle with a capacity above 2 000 cm³.
55. The Hellenic Republic has further stated, without being contradicted by the Commission, that the majority of imported second-hand vehicles are large-engined vehicles (2 000 cm³ and above), the value of which is quite high and on which, consequently, the amount of the registration tax is relatively high.
56. In those circumstances, it is clear that the fee in question generally represents only an insignificant amount in comparison with the amount of registration tax claimed.
57. Further, as stated by the Hellenic Republic at the hearing, without being challenged by the Commission, the fee in question is of an amount which on the whole is equivalent to, if not often less than, the cost of a private technical expert examination.
58. It must be held, therefore, that the Commission has not established that the fee is likely to deter a car owner from appealing to a complaints commission to ensure that the tax applied to his vehicle in accordance with the scale established by the Greek legislation is not higher than the amount of the residual tax incorporated in the value of a similar second-hand vehicle already registered in Greece.
59. In those circumstances, the complaint relating to the obligations of the Hellenic Republic under Article 90 EC is upheld in that the system of calculating the registration tax of second-hand vehicles imported into that Member State is based on a single criterion of depreciation, namely the age of the vehicles, which does not ensure that the value of those vehicles is established at an amount that, as a general rule, is very close to their actual value. Accordingly that method of taxation does not exclude the possibility that, in certain cases, imported second-hand vehicles might be subject to tax of an amount which is higher than that of the residual tax incorporated in the value of similar second-hand vehicles already registered on Greek territory.
60. On the other hand, the failure of the Member State to fulfil its obligations is not established as regards the arrangements relating to the taxation system which are required if that system provides for a fixed method of calculation of the amount of the tax, namely the publicising of the criteria for calculation of the tax and the possibility of challenging the application of the fixed method of calculation in order to exclude any discriminatory effect.
61. In the light of all of the foregoing, it must be held that, by applying a single criterion of depreciation, based on the age of the vehicles, for the purpose of determining the taxable value of second-hand vehicles imported from another Member State into Greek territory in order to establish the registration tax, and by adopting a reduction in value of 7% for vehicles between 6 and 12 months old or 14% for vehicles more than a year old, which does not ensure that the tax due does not exceed, even if only in certain cases, the amount of the residual tax incorporated in the value of similar second-hand vehicles already registered in the national territory, the Hellenic Republic has failed to fulfil its obligations under Article 90 EC.
62. The remainder of the action must be dismissed.

Costs

63. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Under the first subparagraph of Article 69(3) of the Rules of Procedure, the Court may order that the costs be shared or that the parties bear their own costs if the parties are each unsuccessful on one or more heads of claim.
64. In the present case, since the Commission and the Hellenic Republic have each been unsuccessful in respect of certain heads of claim, each party must be ordered to bear its own costs.

On those grounds, the Court (Fourth Chamber) hereby:

1. Declares that, by applying a single criterion of depreciation, based on the age of the vehicles, for the purpose of determining the taxable value of second-hand vehicles imported from another Member State into Greek territory in order to establish the registration tax, and by adopting a reduction in value of 7% for vehicles between 6 and 12 months old or 14% for vehicles more than a year old, which does not ensure that the tax due does not exceed, even if only in certain cases, the amount of the residual tax incorporated in the value of similar second-hand vehicles already registered in the national territory, the Hellenic Republic has failed to fulfil its obligations under Article 90 EC;

2. Dismisses the remainder of the action;

3. Orders the Hellenic Republic and the Commission to bear their own costs.

[Signatures]

---

* Language of the case: Greek.