The court ruled that Portugal discriminated against used vehicles as regards the devaluation tables it uses.
“Portugal applies the same tax on used vehicles under one year old at the same rate as new vehicles and on vehicles over four years old the rate is 52 percent regardless of their real state”, the court said.
Associations here have since said that the recommendation will only be beneficial to people purchasing cars younger than one year and older than five, with the Finance Ministry also stating that the EU ruling will only affect a small percentage of imported cars.
The EU judgement comes after the European Commission formally requested Portugal to amend its legislation on the taxation of imported second-hand vehicles, arguing that vehicles produced elsewhere in the European Union are being discriminated against as a result of the country’s current legislation.
The EC argued back in 2014 before lodging a complaint with EU courts that the calculation of the taxable value of second-hand vehicles introduced into Portugal from another Member State does not take into account the real value of the vehicle,
The Commission said that “no depreciation is taken into consideration before the vehicle is one year old and no further depreciation is taken into account in the case of vehicles older than five years.”
It explained that this may result in higher taxation than that applied to domestically purchased vehicles.
Currently a brand new car or one that is 11 months old is charged the same tax. Only after a car is a year old is a 20 percent discount awarded on vehicle tax (ISV).
There is then a progressive increase in the discount to be awarded, but after reaching five years, the depreciation stagnates at 52 percent.