Brussels closes infringement on registration tax levied on used cars
New registration system replaced discriminatory used car registration tax.
The European Commission has formally adopted its decision to close infringement proceedings against Malta concerning the old registration tax on second hand vehicles that originate from other Member States.
The EC said that the registration tax applied in Malta is in line with EU law.
During this infringement procedure, the Commission concluded that the new registration tax legislation, introduced in 2009 for private vehicles and 2010 for commercial vehicles, was fully in line with EU legal principles as it takes the actual value of a vehicle fully into account at the moment of registration, applying depreciation in a transparent manner.
The new registration tax system is levied on cars according to their size and their emission levels, replacing the old system that levied a mark-up on the cost-insurance-freight value according the engine capacity.
The old system was believed to have discriminatory effect with respect to motor vehicles coming from the other Member States. This was because the value of a used car import was not determined by the cost-insurance-freight value but by value determined by the Maltese authorities.
Differently from new motor vehicles, there was a minimum amount of tax fixed only for used cars. Even if the application of the tax rate to the taxable value determined by the authorities resulted in a smaller amount than the fixed minimum, the latter prevailed.
