The European Commission will soon close an infringement procedure launched against Malta in 2009 after the introduction of a new car registration regime based on more environment-friendly criteria.

Following numerous meetings with the Maltese authorities and clarifications obtained on some pending technical issues in the new law, the EU executive is now satisfied that Maltese law conforms to current EU rules, Commission sources confirmed.

“We have cleared all the issues and expect to formally close the infringement procedures in a few weeks, most probably in July,” the sources told The Sunday Times.

Asked why it has taken such a long time to clear the differences over this law with the Maltese authorities, the sources said the Commission wanted to respond to the many complaints it received from Maltese individuals following the introduction of the new regime before bringing the issue to a close.

“We are now individually informing all those who sent us their complaints on the new Maltese car registration regime that we are satisfied with the Maltese law. As soon as this process is over, in just a few more weeks, we will be in a position to close the issue with the Maltese government once and for all,” the sources said.

Malta’s car taxation regime was substantially overhauled since EU accession in 2004.

Following pressure by Brussels, in 2009 Malta introduced new car registration legislation based on emissions, engine power and vehicle size.

Before, Malta’s law in this area was designed on an ‘ad hoc’ system where the car price, as valued by the Maltese authorities, was the main criterion used to evaluate taxation upon registration.

Though the new regime was introduced more than two years ago, Brussels retained infringement procedures on this issue as it wanted to have more clarifications on certain aspects of the new law, particularly the method used to calculate car depreciation when it comes to the importation of second hand cars. This has now been cleared.

The new system, introduced by the Finance Ministry, has been beneficial to Maltese clients since the price of certain new cars, particularly those with low emissions and small engines, has gone down substantially during the past two years.

The importation of second-hand luxury cars from the UK has also flourished as taxes paid on registration were substantially reduced.

Consequently, this impacted importers of new cars who have seen their orders drop. Some new car suppliers have had no option but to also start importing second-hand vehicles themselves.