The European Commission has formally closed infringement proceedings against Malta concerning the registration tax on second hand vehicles that originate from other Member States.

Well over half of new vehicle registrations in Malta involve imported used cars.

"Following a thorough analysis of the legal issues at stake in this case, and on the basis of all the information it had gathered, the Commission has found that the registration tax applied in Malta is in line with EU law," the Department of Information quoted the Commission as saying.

During this infringement procedure, the Commission focused on principles of EU tax law, and concluded that the new registration tax legislation, introduced in 2009 for private vehicles and 2010 for commercial vehicles, is fully in line with EU legal principles as it takes the actual value of a vehicle fully into account at the moment of registration, applying depreciation in a transparent manner.

The new registration tax system also informs the taxpayer and the general public of the criteria used for the determination of the taxable value of vehicles, providing the public with the opportunity to challenge the registration tax due when an individual disagrees with the authorities on the assessment of the value of used vehicles.

It is pertinent to note, the DOI said, that after the closure by the European Commission of the infringement related to the inclusion of the motor vehicles registration tax in the VAT base on 1 October 2009, there remain no outstanding infringements related to the taxation of vehicles in Malta.