Judgment_paragraph 1.7. · 42/83

1.7.As regards more specifically the incompatibility of the Danish rules with Article 95 of the EEC Treaty by reason of its discriminatory effects to the detriment of imported products, Dansk Denkavit observes:That Article 95 is immediately applicable and creates direct effects for the nationals of Member States, according to the decision of the Court in Case 74/76 (Iannelli v Meroni, [1977] ECR 557), so that nationals are entitled to require that national law be disregarded in so far as its provisions are contrary to Article 95 of the Treaty;That import VAT is an internal tax (judgment of the Court in Case 15/81, Gaston Schul, [1982] ECR 1409), the lawfulness of which depends on its compatibility with Article 95 of the Treaty;That, as regards the assessment, in the light of Article 95, of the incidence of a tax on domestic products and on imported products, the decisive criterion, according to the decisions of the Court (judgments in Case 171/78, Commission v Denmark, [1980] ECR 447, Case 74/76, Iannelli v Meroni, cited above, Case 55/79 Commission v Ireland, [1980] ECR 481 and Case 15/81, Gaston Schul, cited above) is the actual effect of the contested tax, that is to say not only the nominal amount of the tax but also the period of credit granted to the trader before he must account for the tax. Dansk Denkavit also draws attention to the fact that the Commission, in its Proposal for a Fourteenth Directive on the harmonization of the laws of the Member States on turnover taxes — Deferred payment of the tax payable on importation by taxable persons (Official Journal C 201 of 5. 8. 1982 and Document COM(82) 402 of 5. 7. 1982), seeks to ensure that import VAT appears simultaneously in the general return for VAT under the internal system.Dansk Denkavit points out in that connection that the system proposed by the Commission, whereby import VAT should be charged when it is entered in the tax return, is the only system by which, in the terms of the explanatory memorandum to the Commission's Proposal for a Fourteenth Tax Directive, “the tax imbalance working to the disadvantage of imports can be corrected”.Dansk Denkavit also observes that the incompabtibility of the Danish legislation with Article 95 of the Treaty cannot be contested on the ground that any harmonization of the tax periods and of the time-limits for payment would entail as a preliminary more extensive harmonization under Article 99 of the EEC Treaty. It observes that the scope and the respective objectives of Articles 95 and 99 of the Treaty are distinct, which led the Court to state in its judgment in Case 171/78 (Commission v Denmark, cited above) that “the implementation of the programme of harmonization laid down by Article 99 of the EEC Treaty cannot constitute a preliminary to the application of Article 95”.In that regard, Dansk Denkavit observes that the categorical prohibition laid down in Article 95 leaves the Member States the responsibility of complying therewith, and they may not plead, in order to resist the direct effect of the provision in question, that the Community institutions have failed wholly or in part to adopt the directives provided for by the Treaty concerning the prohibition of discrimination in question (judgment in Case 11/77, Patrick, [1977] ECR 1199).As regards the question whether the national system of accounting periods and time-limits for the payment of VAT is compatible with the provisions of the Sixth Directive, Dansk Denkavit observes in the first place that a directive cannot render lawful a situation which is contrary to the provisions of the Treaty, as the Court held in Joined Cases 80 and 81/77 (Commissionnaires réunis, [1978] ECR 927) and in Case 15/81 (Gaston Schul, cited above).Dansk Denkavit observes further that in any event, although the directive in question does not formally prohibit the grant of periods of credit under the import VAT system which are different from those granted under the internal VAT system, neither does it require that the periods should differ. It considers that the directive's silence on this point cannot be construed as authorizing the Member States to adopt a system which is contrary to the Treaty (judgment of the Court in Gaston Schul) merely because, with regard to the time of payment of the VAT, it imposes certain limitations on the options open to the Member States with respect to payment of the internal tax payable (Article 22), whilst it does not expressly place any limits on the options available regarding the payment of import VAT (Article 23).Finally, Dansk Denkavit claims, in the alternative, that, in the event of the directive in question being interpreted differently on that point, that is to say as allowing import VAT to be charged on a discriminatory basis, it should not be applied because it would necessarily be held to be contrary to Article 95 of the EEC Treaty and therefore to be invalid.