Malta given two months to change rules or face the music

The European Commission on Wednesday warned Malta about three sets of legislation which according to the EU executive are not in line with EU law.

The Commission announced yesterday that it has decided to send Malta three new reasoned opinions, the second-stage of the EU legal proceedings, over the non-conformity of EU directives regarding insurance, employment and VAT on car registration.

Malta has two months to come in line before the Commission decides to proceed with these issues to the European Court of Justice.

The issues are the following.

Employment Equality Directive

Malta has to fully implement EU rules prohibiting discrimination in employment and occupation on the grounds of religion and belief, age, disability and sexual orientation.

Malta's transposition of this directive is not in line as the ban on discrimination does not cover access to self-employment or occupation and the protection against victimisation in the public sector does not cover discrimination on grounds of age or sexual orientation.

A similar reasoned opinion has been sent to another 10 member states.

Internal Market: Fifth Motor Insurance Directive

Malta has failed to implement the Fifth Motor Insurance Directive 2005/14/EC by the agreed date of June 11, 2007. The directive updates and improves the EU legal framework for motor insurance by making it easier to change one's insurer and by upgrading the protection of victims.

In the absence of adequate implementation of the directive, road traffic accident victims as well as policyholders in the member states concerned will not be able to benefit from their new rights.

Reasoned opinions on this issue have also been sent to Belgium, the Czech Republic, Greece and Ireland.

VAT and car registration tax

The European Commission has formally requested Malta to change its legislation over the inclusion of the car registration tax in the amount on which VAT is levied in the case of road vehicles.

The Commission considers that the registration tax should not be included in the taxable amount for VAT purposes.

The Commission warned that if the relevant national laws are not amended within two months in order to comply with the respective reasoned opinion, the Commission may decide to refer the matters to the European Court of Justice.

In the sale of road vehicles, Malta still includes the amount of its taxes on cars in the amount on which VAT is levied. This goes against EU law.

Austria and Finland were also warned over the same issue.

Labour MEP Joseph Muscat yesterday criticised the government for taking too long to make the necessary changes to the car registration system and pointed out that he was ignored when pointing out this issue many months ago.

He said in a statement that the removal of this "tax on tax" should also bring about a reduction in car prices of between €500 (Lm214.65) and €2,000 (Lm858.60).

Dr Muscat said that he is also going to continue lobbying so that all those consumers who paid this tax since Malta's accession to the EU will be given a refund.