The European Commission has referred Malta [INFR(2018)2362] to the European Court of Justice for taxing used cars imported from other EU member states more highly than used cars purchased on the Maltese market.
In the absence of harmonisation, each Member State is free to set its own tax policies based on its own assessments. Article 110 TFEU, on the other hand, requires each Member State to choose and implement car taxes in such a manner that they do not favor domestic second-hand car sales while discouraging the transfer of similar second-hand cars from other Member States.
Due to a variation in the way the tax is computed in the context of a reorganisation of the automobile taxation system in Malta, cars initially registered in Malta after January 1, 2009 are subject to a usually higher annual circulation tax than cars registered before that date.
The Maltese car taxation system, on the other hand, does not take into consideration the date of the vehicle’s first registration in another Member State, but rather the date of registration in Malta. As a result, cars registered in other Member States prior to 1 January 2009 and imported to Malta after that date are liable to a higher yearly registration tax than equivalent vehicles already registered in Malta.
This discriminatory effect is not compatible with Article 110 TFEU, which prohibits discrimination against imported products.
If you would like to contact us send an email at: [email protected]