Edition 1513
16 February 2019
Edition: 1513

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EU calls on Portugal to modify legislation on car tax

in News · 31-01-2019 10:25:00 · 0 Comments

The European Commission has decided to open an infringement procedure against Portugal for not taking into account the environmental component of the registration tax imposed on used cars imported from other Member States for depreciation purposes.

EU calls on Portugal to modify legislation on car tax

The Commission said in a statement that it considers the Portuguese legislation is not compatible with existing legislation since used cars imported from other Member States are taxed more heavily compared to used cars purchased in the Portuguese market because their depreciation is not fully taken into account.


If Portugal does not act within the next two months, the Commission may send a reasoned opinion to the Portuguese authorities.
In related legal proceedings against Portugal, the European Commission has decided to send a reasoned opinion to Portugal asking it to change restrictive provisions on exit tax for capital gains, bringing it in line with the relevant judgments of the Court of Justice of the EU.


Portugal had taxed capital gains of non-resident taxpayers at a fixed rate of 28%, whereas residents were subject to a progressive income tax. In two cases, (Hollmann vs Pública and Fazenda Pública vs Teixeira) the Court has found this different treatment incompatible with the free movement of capital guaranteed by the European Treaty and by the EEA Agreement. Portugal has introduced an option for non-residents to be treated as residents and have 50 percent of such capital gains from Portuguese sources taxed at progressive income tax rates.


However, EU case law holds that a mere option to be treated as a resident taxpayer does not remedy the infringement if the default taxation still imposes a greater burden on non-resident taxpayers. Once again, if Portugal does not provide satisfactory response within two months, the Commission may decide to bring the case before the Court of Justice of the EU.

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Edition 1513
16 February 2019
Edition: 1513

Read this week's issue online exactly as it appears in print.

Twitter

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