Global

Details

  • Service: Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 12/14/2012

EU - Clarifying EU rules on car taxation 

December 14: The European Commission (EC) today presented a “communication” to clarify EU rules on car taxation and to recommend measures intended to strengthen the single market in this area; reduce issues encountered by citizens and businesses in moving cars between EU Member States; and remove obstacles for cross-border rentals.

Reasons for clarifying the taxation of cars

As noted in today’s EC release (IP/12/1368, 14 December 2012), car registration taxes and circulation taxes are not harmonized in the EU, and this can result in double taxation in certain situations.


Car taxation accounted for approximately 1.9% of all tax revenue across EU Member States in 2010. Each year, more than 13 million new passenger cars are registered in the EU, while over 3 million cars are moved to another EU Member State.


The EC noted that car taxation proposals have already been introduced, and that over 300 infringement procedures against EU Member States related to discrimination in national car registration rules and circulation taxes have been launched.


Yet, despite these efforts and legal proceedings, discrimination and double taxation of cars transferred between EU Member States continues to persist due to the fragmentation of national tax rules. Therefore, the EC is moving to clarify the EU rules for passenger car taxes and identify best practices for EU Member States to implement, including:


  • Providing better information on the application of car taxes in cross-border situations
  • Refunding part of the registration tax for cars that are permanently transferred to another EU Member State
  • Making provisions for the temporary use of vehicles, particularly rental cars, registered in another EU Member State.

What’s next?

The communication will be discussed by the European Parliament, the Economic and Social Committee and the EU's Council of Ministers.




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