LAW OF EUROPEAN SINGLE MARKET

Free Movement of Goods: Duties, Charges and Taxes

Free Movement of Goods: Duties, Charges and Taxes

Introduction

This study is about the free movement of the goods. This can be carried out in different ways. Protectionism is the most obvious form of protectionism that will be done by the custom duties or charges that have the same impact on the foreign goods more expensive than domestic counterparts. These issues are dealt with the Articles 28-30 TFEU. However, a state can also benefit from domestic goods by taxes that will discriminate against the imports. Articles 110-113 TFEU covers the discriminatory tax provision that can be controversial at times. Under this law a state may discriminate against the imports by applying differential taxes when the goods are within the country.

Discussion

The law articles 110-113 can be controversial at times. The Treaty language makes it essential for the ECJ to make decisions of the difficult issue, for instance if the goods are similar to each other or whether the tax differential is protective for the products in home state. This is also in part as the tax rules can be used in terms to foster the national preferences which relates to issues such as the environment. The ECJ has to determine if these rules are befitting with the Articles 110-113.

The purpose of the article 110

In simple terms the purpose of the Article 110 TFEU is to prevent the objectives of the Articles 28-30 that is prevention from undermined by the discriminatory internal taxation. These articles, 28-30 are designed in order to prevent custom duties from impeding the free movement of goods within the European Union. However, these provisions would be of little use if it were to be open in a state to bias foreign items once they were inside their very own land by applying taxes that are discriminatory, thus putting those imported goods at a disadvantage as they compete with the domestic goods. Article 110 (which has been made to avoid this from happening), it has been acknowledged by the ECJ, that demands absolute neutrality of internal taxation with bearing connection with imported and domestic product.

Direct and Indirect Discrimination

The Article 110(1) does not impose that the member state should adopt any specific internal taxation regime. However, the system chosen should be without discrimination of identical or homogenous products that are imported.

In Commission v Italy, the Italian government imposed reduced taxes on reformed oil than the conventional oil. This was done in for ecological concerns, though the imported regenerated oil did not obtain the same advantage. Italy made an argument that it was nearly impossible to gauge if it is regenerated oil which is imported or otherwise. ECJ denied the argument on the basis that importers should give proof of their oil coming from the relevant category and certificate from the state of export to identify the nature of the oil. Even in Hansen, the ECJ claimed the German rule which was relating to the tax relief for the spirits made from ...