New start for a standard passenger vehicle taxation in the EU

13 million new vehicles are registered in the European Union every year. Nevertheless the registration tax and the vehicle tax are not harmonized within the EU. The EU commission recognizes the danger that there could be a double vehicle taxation of citizens and companies due to lack of harmonization. In order to prevent this, the commission presented regulations for passenger vehicle taxation in a notification on December 14, 2012 and recommended proceedings for implementation to the member countries.

Algirdas Šemeta, EU Commissioner for Taxes and Customs Union, said: 'In view of the fact that three million vehicles are transferred from one member country to another every year, the amount of currently existing tax burdens is simply not acceptable.' The commission initiated already more than 300 infringement procedures against member countries due to discriminating national registration taxes and vehicle taxes. Since the member countries could not agree for standard passenger vehicle taxation, the EU commission derived its proposals from the decisions of the European Court of Justice (ECJ).

In particular, the notification concerns better information with regard to vehicle taxation in borderline cases, the reimbursement of parts of the registration tax for vehicles which are transferred permanently into another member country, as well as the adoption of regulations for the temporary use of vehicles, in particular rented vehicles which are registered in another member country. Overall this concerns a tax relief potential of 1.5 billion euro per year. As a next step, the notification of the commission will be discussed in the EU parliament, in the EU Council of Ministers and in the Economic Committee and the Welfare Committee.