Brussels, 22/07/2004 (Agence Europe) - The European Commission has launched a consultation on registration and road fund taxes for private vehicles. After this consultation, which is due to end on 10 September, tax harmonisation in this field may be proposed.
In a communication presented in September 2002, the Commission proposed the phasing out (over a period of 5 to 10 years) of registration taxes applied in ten Member States, and to bring in a new tax structure linked to CO2 emissions. In order to ensure budgetary neutrality, the registration text could be postponed towards the road tax, it said.
As an interim measure, it has suggested bringing in a tax reimbursement system between the Member States, for vehicles registered in one State and exported or definitively transferred to another. Its aim is to avoid double taxation whilst encouraging people to buy cars which pollute less.
According to figures put forward by the Commission at the time, registration tax varies from 267 EUR in Italy to 1,565 in Denmark, and annual road tax between 30 EUR in Italy and 463 in Denmark.
The Commission is currently putting four options to public opinion: 1) the status quo, leaving it up to the Court of Justice to establish jurisprudence; 2) bringing in a system of reimbursement between the States; 3) phasing out registration tax and bringing in a CO2 emissions tax; 4) reducing registration tax to a level no higher than 10% of the price of the car before tax.
The European Parliament and car builders are in favour of harmonisation, but several Member States are reluctant. A proposal dating from 1998 to remove double taxation is still on the Council's table. If no progress can be made on the dossier in the political arena, the Commission has brought several double taxation cases before the Court of Justice. The European judges, however, have just ruled that it is in the wrong, stating that Finland is entitled to impose a car tax related not to the import of a good, but to its use in the country (see EUROPE of 21 July, p.17).
The consultation documents are available on the Commission's website at: http: //europa.eu.int/comm/taxation_customs/taxation/consultations/car_taxations_en.htm.