The Malta Transport Authority was yesterday ordered to refund more than €30,000 in registration tax and VAT to a man who imported a second-hand Ferrari from the UK.

Stephen Grech brought in the 328 GTB – an 1980s model similar to the one driven by Tom Selleck in US TV series Magnum P.I. – from the UK in 2008, after paying £26,000 including tax for the vehicle.

The court heard that he had paid all taxes due on the car in the UK, including registration tax and VAT, but was forced to pay the authority €25,793.63 to register the car in Malta, with €4,642.85 in VAT.

Mr Grech made this payment under protest, claiming it was unlawful and based on an incorrect interpretation of EU law on freedom of movement of goods.

The payment, he argued, was tantamount to double taxation and unjustified enrichment and he asked the court to order the defendants to refund him €30,448.13.

In yesterday’s judgment, Mr Justice Joseph Zammit McKeon noted the EU Treaty stated that no member state could impose, directly or indirectly, any internal taxation on the products of other member states in excess of that imposed directly or indirectly on similar domestic products. European Court case law held that the aim of this provision was to ensure free movement of goods between EU member states in normal conditions of competition and it applied to registration duty charged on importing used cars.

This meant that the registration tax on a second-hand car of a certain age could not exceed the amount of residual tax that was included in the value of a similar car in the local market.

The court added Mr Grech had also paid 18 per cent in VAT on the registration tax.

This meant that he was paying tax on another tax when this was not due under the terms of the law. No VAT was due, according to the court, on the importation of a second-hand car from another EU state when the car was intended for one’s personal use.

The court ordered the Tran-sport Authority to refund Mr Grech €30,448.13.