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Cyprus must change discriminatory rules on second-hand cars.

THE EUROPEAN Commission yesterday formally requested Cyprus to change the way in which it levies registration tax on second-hand motor vehicles brought in from other member states.

Under Cypriot law, the full amount of registration tax on the transfer and registration of a second-hand motor vehicle from another member state is applied, regardless of the age or the mileage of the vehicle. It is levied on the basis of the category of the vehicle, engine capacity and carbon dioxide emissions. Cypriot rules do not, however, take into account the depreciation of the value of second-hand vehicles when they are registered in Cyprus.

The Court of Justice ruled that the tax on a second-hand car from another member state cannot be higher than the "residual tax" incorporated in the value of a similar vehicle registered nationally. In addition, Cypriot rules do not allow taxpayers to challenge the specific assessment of the registration tax made by the tax authorities. Both features of Cypriot legislation are contrary to EU rules and infringe the principle of non-discrimination as interpreted by the Court.

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Publication:Cyprus Mail (Cyprus)
Date:Jun 1, 2012
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