The Finance Ministry said today that a case decided yesterday where a couple were refunded VAT and registration tax paid on an imported second hand vehicle had nothing to do with the wider issue over registration tax.

"The opposition is mixing different cases. The case decided in court yesterday has nothing to do with the pending cases on VAT paid on registration tax" the ministry said.

It explained that the case decided yesterday was about a couple who bought a vehicle abroad and personally drove it from another EU member state to Malta before 2008. The vehicle was registered by the person who drove the car to Malta and not by an agent or dealer. The court found that since this person had personally driven the vehicle to Malta, the transaction technically took place in the UK and therefore this was not a transaction which was taxable in Malta for VAT purposes. 

The court had dismissed the arguments of the VAT Department that VAT had to be imposed in order to avoid  distortion of competition.

"The fact that the court did not find the government responsible but found Transport Malta responsible for the application of the law shows that the court affirmed the duty to charge VAT on registration tax when a vehicle is imported by a dealer," the government said.

It said it therefore deplored the Opposition's efforts to mislead the public by trying to link this particular case to the case where it was contesting the principle of charging VAT on registration tax.

The ministry also recalled that the European Court had decided in a case against Poland, which had a similar tax system as Malta's, that Poland had a duty to charge VAT on registration tax.

The government insisted that it had always conformed to the domestic and EU law and every decision by the courts should be respected.