EC Proposes to end Car Registration Tax

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Fri 8 Jul 2005 10:08
EC Proposes to end Car Registration Tax - Robbie
I noticed that the EC is making proposals to end car registration tax throughout the Union.

More money out of our pockets? See below.

"The EU executive Commission is proposing a restructure of EU car tax systems which would lead to the eventual abolition of car registration tax in the European Union.
The main aim of the Commission proposal for a directive is to remove existing tax obstacles to the transfer of passenger cars from one Member State to another.
It is also looking to ensure an environmental element to car taxation by restructuring the tax base of both registration taxes and annual circulation taxes so as to include elements directly related to carbon dioxide emissions of passenger cars.
The Commission stresses that it only wishes to establish an EU structure for passenger car taxes. It is not looking to harmonise tax rates or oblige Member States to introduce new taxes.
The Commission's passenger car tax proposal contains three elements:
Abolition of car registration taxes over a transitional period of five to ten years. The Member States' revenues would not be affected if the gradual abolition of registration taxes is accompanied by a parallel increase of annual circulation taxes and, if necessary, other taxes. A gradual change would protect car owners from dramatic devaluations of their cars. The transitional period would also allow those Member States applying high registration taxes to make the necessary structural changes to their car tax systems.
A system whereby a Member State would be required to refund a portion of registration tax, pending its abolition, where a passenger car that is registered in that Member State is subsequently exported or permanently transferred to another Member State. This measure would aim both to prevent the double taxation that occurs at present and to make this kind of taxes fairer by relating them to the actual use of the car in the Member State concerned. A similar refund system would be introduced for annual circulation taxes.
The introduction of a CO2 element into the tax base of both annual circulation taxes and registration taxes. This would mean a tax differentiation on the basis of the number of grams of carbon dioxide emitted per kilometre by a car. By 31 December 2008, at least 25% of the total tax revenue from registration and annual circulation taxes should derive from the CO2 based element of the taxes and this figure should rise to 50% by 2010."

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