EU clears Malta on car registration tax VAT
The European Commission has closed the infringement procedure that had been brought against Malta over VAT charged on vehicle registration tax under the old car registration tax system.
The Commission said it considered that the issue on which it had opened the infringement proceedings was no longer part of Malta's legislation.
"The current car registration tax which came into effect on 1 January 2009 introduced environmental considerations into the tax system to encourage the use of smaller and environmentally cleaner cars," the Ministry of Finance said in a statement.
"The Maltese Government is pleased to note the positive effects which the current car registration tax has already had since its coming into force namely the reduction of prices for smaller and cleaner cars and the reduction in the average age of second hand cars being imported into Malta."
Earlier today, the European Commission said it has taken Austria to the European Court of Justice for the inclusion of car registration tax in the taxable base on which VAT is calculated (see separate story).
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bernard bruno
Oct 10th 2009, 20:59
well do as i do KEEP MALTA scrap cars on the roads till the eu warm malta about cars that dont comply with eu eg certifcate of comformity so long as it moves keep going heard the latest imagine you just bought your dream car from uk then some idiot with lada smashes into the back of it you exchange details go to the insurance and FIND OUT THAT THE ORTER DRIVER doesent want to open a CLAIM in maltese law this is not ilegal so drive your nice cars middle of the night not on sundays BE WARNED only in malta
Karl S. Grech
Oct 10th 2009, 09:53
@ Kurt Mifsud - Il-Gvernijiet tad-Dinja kollha dejjem jonqsu milli jwettqu xi weghdi , pero' l-partit tieghek jibqa' maghruf ghal zewg weghdi li zgur ma wettaqx. NUMRU l - Fl- 1996 wieghed li se jnehhi il- VAT ( mhux li semplicement jibdlilha isimha ). Din il-weghda saret lil - poplu kollu. NUMRU 2 - It -tieni weghda kienet ghal-laburisti BISS - dik li tibqghu fil-Gvern 5 snin. Nghidlek is-sew, jiena hadt gost li dik il-weghda inkisret ghax bis-sahha ta' hekk gawdejt jien, int u l-poplu Malti kollu. Issa tirrispondini billi tibghatli xi lista listun ta' weghdi li l-PN ma wettaqx. Izda nassigurak li l-effett taghhom zgur ma jipparagunax mat-tnejn li l- PL ma wettaqx. Ghalhekk il- PN huwa differenti, ghax jiddistingwi. Siehbi, ghad baqghalkom x'titghallmu !
Josef Muscat
Oct 10th 2009, 09:32
@ Kurt Mifsud - who said that PN does not want to win the next General Election ? But, at ALL COSTS definitely not. That is why at the end, PN will make it !
Stephen Borg Cardona
Oct 10th 2009, 00:22
I am one of the many Maltese who voted for the present Government only to suffer the daylight robbery of the previous Registration tax. To our honorable ministers a few thousand pounds of illegal taxation may amount to nothing much, to people like me it amounts to extra years of punishing loan repayments. Justice delayed is justice denied !
Kurt Mifsud
Oct 9th 2009, 20:47
@Josef Muscat:
"The Government has already made it clear that whatever the outcome ( re Vat collected from 2004 - 2008 ) it will definitely be adhered to. Other than that is simply not the way to go about it ! Other than that is just " loghba tat-tfal zaghar " - Weghda ohra taghddi mal-bqija din???
PL wants to win the next election AT ALL COSTS - Who doesn't? At least not by fooling people with foolish promises! Need to mention any???
r cutajar
Oct 9th 2009, 19:19
dear Editor/ Sir
could you please enlighten us properly what the govt at the time of negotiations was actually discussing AND EVENTUALLY decided regarding cars' taxes/ registration cause I really hate to comment on what seems to be an out of line reasoning in this whole context of car tax/registration unjust system compared to what the impression being blarred out openly of highly positive benefits if Malta were to join the E U at the time
As far as many I assume where informed "Malta" was never informed that where cars' taxes/ registration were concerned these taxes where to be retained as per present ie taxes and registration on cars are to remain firm even if we do join the E U !!!
If the powers did negotiate such a deal behind the Maltese backs then one begs to ask a simple question a heavy weight on the shoulders of who is responsibile to answer why has the maltese citizen been duped ?
E Gatt
Oct 9th 2009, 17:42
This talk of ‘cheating’, and ‘stealing’ is an exaggeration in my opinion. It was a gray area and subject to interpretation. When the EU’s position became clearer, Malta adopted a new system of car registration. Today, the EU Commission cleared Malta on its present tax registration system.
The Government has repeatedly declared that should the Courts decide that a refund is due to individuals who bought their vehicles before 2009, then these refunds will be paid. If the Courts decide that a refund is not due, then the Government will not pay. This is the correct position to take.
The Opposition has declared that it will ignore the Court’s decision if the Court decides that the refunds are not due.
If the refunds are due, or if PL form the next government in 2013, then the taxpayer will have to foot the bill.
Everyone, including our politicians should respect the Court's decision.
Josef Muscat
Oct 9th 2009, 17:35
@ Lawrence Gauci - you said it ! The courts will decide this issue. The Government, whatever the decision has already declared that it will adhere to. In this issue it seems , that politically PN has everything to lose and nothing to gain . On the other hand, PL seems to be playing another game. It is so clear Mr Gauci, PL wants to win the next election AT ALL COSTS.
Ray Gatt
Oct 9th 2009, 16:35
This means that Joseph Muscat was wrong and all those standing in the qeues to put down their name wasted their time. Having said (written) that, I ask Dr. Gonzi - what about the buses and heavy vehicles which are letting out all that polluting exhaust and poisoning us? Action please sooner rather than later. No action - no vote, and not just on this one.
Mike Magri
Oct 9th 2009, 15:56
Mr. Minister and the rest....
Facts are facts, AND THEY REMAIN SO, no matter how much one trives to twist them...
Officialyy, Malta joined the EU, NOT on Jan.2009, but in May of 2004.
Therefore, ALL the EU Laws applicable THEN, were, and still are APPLICABLE to Malta too SINCE the signing of the membership agreement.... Therefore, by very simple reasoning, Malta should have had this patricular law changed BEFORE joinig in 2004, as we had done to many other laws and regulations, and NOT almost 5 YEARS LATER, , .....!!!!
Thus, to me this is nothing else but a Halve-Baked Sentence, which does NOT hinder our LEGAL Claims for the refunds of all the ILLEGAL vat charged on first car registration tax, purchased during May 2004 and December 2008.
Consequently, the EU did NOT clear the Maltese government from the illegal vat collected between May 2004 and Dec. 2008,, but just agreed and confirmed that the government changed the relevant law in Jan. 2009, and closed the books.... BIG DEAL....!!!!!
So Chin Up Guys... This is NOT the end of the story, for us `stolen` citizens of Malta and Gozo.....
Lawrence Gauci
Oct 9th 2009, 13:45
@Mr. Joseph Muscat whilst i do appreciate your views and comments i'd like to comment back maybe i wasn't as clear in my comment as i would have wanted. What i said has already been proven by the EU. Malta was given an ultimatum to change the registration tax system thus making it that Malta was in fact in breech of EU laws. Yes Malta was in breech of EU laws between 2004-2008 however the EU never ordered the Maltese government to reimburse people with what they paid extra and that is were the PL comes in. The PL is fighting on behalf of those people who have been illegally asked to pay VAT on registration tax. It is completely illegal to pay VAT twice within EU member states thus the PL is asking the government to give back to the people what is duly theirs. obviously it is always up to the courts to decide in favor or against one party or the other. ( hopefully i have made my point clearer to you)
M Scerri
Oct 9th 2009, 12:41
@George Caruana
"Tax on Tax is illegal"
Where did you get this from? Smajtha m'ghand tal-grocer?
This is not true.
All countries, for example, have a duty on cigarettes and alcohol, over which there is VAT. That's a clear, legal, case of tax on tax.
Josef Muscat
Oct 9th 2009, 11:33
@ Lawrence Gauci - what you are saying has to be declared by the EU. The Government has already made it clear that whatever the outcome ( re Vat collected from 2004 - 2008 ) it will definitely be adhered to. Other than that is simply not the way to go about it ! Other than that is just " loghba tat-tfal zaghar " !
r ferriggi
Oct 9th 2009, 10:42
can anyone kindly inform me FROM WHERE can one get factual, honest, clear and accurate information if one wants to import a secof hand care from abroad??
my feeling is that the authorities are doing all this on purpose.
when i tried to get information,,, i was always misled and misguided. why? i dont know.
Keith Tanti
Oct 9th 2009, 08:58
@ I Camilleri
Mr Camilleri, i think you might want to set your figures right as you might have been misinformed... the maximum you pay of an over 2000cc diesel engined vehicle which is more than 19 years old is Eur555 - in your case, a honda del sol has a petrol engine, is 17 years old and correct me if i am wrong, but i would imagine has an engine of less than 1800cc - so the amount you shall be paying in road tax should not be more than Eur400 or less...unless you just imported a honda del sol - which is crazy - because if you just bought a vehicle from abroad and thus are paying under the new tax regime, you should have checked how much you are going to pay in road tax before you bought that vehicle - plus - you should have bought a cleaner, not so old, vehicle.
I suggest you check your figures.
Keith
Stefan Engelbert
Oct 9th 2009, 08:44
Well, they closed the book but they did not clear Malta. In fact if you follow the case with Austria you clearly see that tax on tax is illegal in the EU.
Lawrence Gauci
Oct 9th 2009, 08:26
@ Mark zahra @ Edwin Cachia @ R Spiteri
The EU have just closed the infringement procedures against Malta with regards car registration tax because as of 1st January 2009 Malta adopted a system that was in line with EU regulations however prior to that date Malta was in breech of EU laws and that is why the in my opinion the PL was right in suing the government.
Well done Joseph Muscat and Anglu Farrugia for the courage and determination, i really do hope that justice prevails and the people of Malta get back what is rightfully theirs.
Nadine Vassallo
Oct 8th 2009, 23:56
"The Maltese Government is pleased to note the positive effects which the current car registration tax has already had since its coming into force namely the reduction of prices for smaller and CLEANER cars"
It is exactly the opposite what we found out earlier this year when we were shopping around for a car. We know for a fact that CLEANER Honda Hybrid's price increased and will continue to increase - we were so told by the salesmand in the showroom, and the price of the CLEANER Toyota Prius does not seem to have gone down either.
Is the Ministry of Finance part of the Government of Malta or of another country? Honestly now....
Sally Falzon
Oct 8th 2009, 21:58
Sorry to sound a bit naive but i don't quite get it, are the people some 14,000 or so going to be reimbursed or not. from 2004-2008. i am for one who paid VAT on a second hand small Japanese motor car. Will be interesting to hear your views.
JF Bartolo
Oct 8th 2009, 20:27
Forza The Labour Party * Forza Muscat at least he has got the guts to push ahead and do what he believe is just for the Maltese people that were illegally conned.
I. Camilleri
Oct 8th 2009, 20:19
am i the only person who thinks that 1,460 euros a year on road licence on a 92 vehicle is a rip off? (for those wondering the vehicle is a honda del sol)
Joe Fenech
Oct 8th 2009, 20:02
Dave Pulis :
YES!!!
The EU is a joke and is there only to serve businesses who want to relocate easily to cheaper countries in the Union!!!
Albert Bezzina
Oct 8th 2009, 19:04
This is only ONE of the infringement procedures which was opened by the European Commission against Malta as regards car taxation. The other infringement procedure, refering to compliance with Article 90EC as regards importation of used cars from other EU member states, has still not been closed. Presumably the EC is still examining the implications of having a much increased annual ciculation fee relative to cars already in circulation in Malta before 2009.
The politically rhetoric statement by Minister Fenech is nothing more than a typical response to obfuscate the fact that applying VAT on registration tax between 2004 and 2008 was not legal and that makes it illegal. Only a case carried to the ECJ to specifically going to force a refund.
I am 49, I can wait for the rest of my life, I have patience, but ultimatly Justice, European Justice, will be given - with interest please eg 1% per month as the IRD!
E.Psaila
Oct 8th 2009, 18:35
No case for EU as long as there are no birds involved. Next time we should let the birds vote in the EU parliament elections...
Jason Coleiro
Oct 8th 2009, 18:13
No Mr. Pulis they don't care and they never did and they will NEVER do. I hope that someday the responsible people for this will get what they have to like they do abroad. Listen to this: im trying to import a 1960 chevrolet belair coupe from the UK registered and everything, classic vintage historic all original and intact just because its my hobby. This car i will pay the hefty road tax and insurance and maybe it will go out once a year.In the UK they are considered historic and you dont pay that much if its still in the original condition. Im asked a price of 27000euros and surprise surprise to register it here they want 25000euros. ADT vultures thats what they are, thank you ministers for ripping us people even of our hobby. People are getting tired of your lies totally.
George Casha
Oct 8th 2009, 17:53
What positive effects ? We still have junkyard vehicles on our roads belching poisonous fumes including the notorious buses. New vehicles are still being imported without any old bangers being taken off the roads and obviously add to the already overcrowded, pathetic roads we have.
What a load of BS. The only positive effect this tax is having is us paying more taxes to fill the Government's ever increasing financial crater and nothing else. This is another sick joke just like the ADT one urging people to send an sms to report diesel smoke. They think they can fool all of the people all of the time but they will soon wake up to reality.
laurence schembri
Oct 8th 2009, 17:44
The European Union don`t give a toss about some 400,000 thousand citizens, Malta and Maltese are the least of their problems. Repeated referendums is what is a prtiority with this (un)democratic so called EU.
Mark Zahra
Oct 8th 2009, 17:24
It does not mean the EU does not care but if has found NOTHING illegal. Otherwise it would have taken Malta in front of the ECJ as it did with many other countries
George Caruana
Oct 8th 2009, 17:10
What about mobile-phone users under contract? It must be noted that monthly bills contain the 18% VAT charge on a 3.5% Excise Tax, in addition to the net amount of the phone bill. This is surely against the law. VAT should be paid on consumption not on any tax. Tax on Tax is illegal.
Edwin Cachia
Oct 8th 2009, 17:06
@ Dave Pulis
Dave..min iddecieda li l-VAT fuq ir-registration tax hija ' illegal tax ' ? Hemm xi sentenza tal-Qorti ? L-European Commission ? Jew Joseph Muscat ?
Il-Commission illum habbret li mhux ser tiehu passi kontra Malta..nahseb irridu noqghodu attenti qabel niddeciedu u nfajjru x'inhu illegali jew le.
Billi jghid li hija llegali Joseph Muscat, ma nahsibx li huwa l-persuna ideali biex jitkellem u jtina l-pariri fuq l-EU. Ghallinqas jien meta niftakar il-parir ta' Mucat x kien fuq l-EU jaqbadni t-tkexkix. Imnalla ma smajtx minnhu, jien u hafna ohrajn.
V. Borg
Oct 8th 2009, 16:58
Which means that we are second class citizens.
Josef Muscat
Oct 8th 2009, 16:50
@ Dave Pulis - it means that promising other than the EU ruling is abusive. Very simple !
Joseph Sciberras
Oct 8th 2009, 16:46
It would be extremely unfair on taxpayers like me and many others who did not buy a car between 2004-7 if the government refunds VAT. The money to pay for resfund would have to be collected from all taxpayers, and this is certainly not right.
R spiteri
Oct 8th 2009, 16:44
so it was a waste of time and a political bluff to queue outside labour headquarters.
Muscat. Pat
Oct 8th 2009, 16:43
The double speak of the Government nearly suggests that we must thank the Minister for getting rid of the whip that lashed us with in the first place!
Dave Pulis
Oct 8th 2009, 16:33
Does this mean the E.U does not care about the illegal tax charged by the Maltese authorities between 2004 and 2009?
A Farrugia
Oct 8th 2009, 16:30
The European Commission is right. The issue on which it had opened the infringement proceedings is no longer part of Malta's legislation. The Government was wrong in introducing it in the first place and must give the money back to all the consumers who bought a car between 2004 and January 2009. The Labour Party, on behalf of thousands of Maltese consumers is taking the case to our national courts.