The European Commission is still not in position to say whether the new car registration tax in Malta is fully compliant with EU laws - more than a year after its introduction.

The Commission said it was expecting more information from the Maltese authorities in order to assess the situation before giving the green light.

The government implemented a series of changes to the local vehicle registration rules at the start of 2009 following infringement procedures initiated against Malta three years ago. However, the EU executive appears to be reluctant to give the go-ahead until some issues are resolved, such as the way valuations on imported cars are carried out.

Replying to a parliamentary question by MEP Simon Busuttil, EU Taxation Commissioner Algirdas Semeta said: "The Commission is waiting for further explanation from the Maltese authorities concerning the vehicle registration tax system, in order to assess whether the amendments are in line with EU law as interpreted by the (European) Court."

The new motor vehicle registration tax system for passenger vehicles was provisionally introduced based on criteria such as CO2 emission, particulates emission, the length of vehicle, as well as reference to the registration value.

Following concerns about the registration value, Malta once again amended its laws with new provisions introduced at the beginning of this year. The original changes to the car registration scheme had to be introduced after Brussels said the old regime was in breach of EU law particularly with regard to the importation of second-hand cars which were being subjected to high taxes as well as additional VAT.

Though legal procedures against Malta on this issue are still ongoing, many Maltese have been undeterred from importing second-hand luxury cars from the UK due to lower registration tax and weak Sterling.

Car dealers and agents have also started importing second-hand cars directly as demand had risen dramatically. This has had a negative effect on the sale of new cars.