European Commission - Press release

Car Taxation: Commission requests Cyprus to change registration tax rules on second-hand vehicles

Brussels, 31 May 2012 - The European Commission has today formally requested Cyprus to change the way in which it levies registration tax on second-hand motor vehicles transferred from other Member States.

Under Cypriot law, the full amount of registration tax on the transfer and registration of a second-hand motor vehicle from another Member State is applied, regardless of the age or the mileage of the vehicle. It is levied on the basis of the category of the vehicle, engine capacity and carbon dioxide emissions. Cypriot rules do not, however, take into account the depreciation of the value of second-hand vehicles when they are registered in Cyprus. The Court of Justice ruled that the tax on a second-hand car from another Member State cannot be higher than the "residual tax" incorporated in the value of a similar vehicle registered nationally (Article 110 of the Treaty on the Functioning of the European Union).

In addition, Cypriot rules do not allow taxpayers to challenge the specific assessment of the registration tax made by the tax authorities. The Court of Justice has ruled in previous cases that Member States' judicial systems should offer the possibility to challenge the statutory scales in their individual case.

Both features of Cypriot legislation are contrary to EU rules and infringe the principle of non-discrimination as interpreted by the Court.

The Commission's request takes the form of a reasoned opinion (second step of EU infringement proceedings). In the absence of a satisfactory response within two months, the Commission may refer Cyprus to the Court of Justice of the European Union.


A Member State may levy a registration tax on vehicles transferred from another Member State provided EU rules are respected and in particular the non-discrimination principle in Article 110 TFEU. The EU's Court of Justice has stated in this respect that the depreciated value of a motor vehicle must be taken into account when it is registered in a Member State. This may be done for example by means of depreciation scales. These should, however, guarantee that the tax due does not exceed the tax value of similar vehicles already registered in the national territory. The EU's Court of Justice has also stated that Member States are obliged to provide means of redress if the taxpayer wishes to challenge the specific assessment of the registration tax.

For the press releases issued on infringement proceedings in the area of taxation or customs see:

For more information on EU infringement procedures, see MEMO/12/387.

For the most up-to-date general information on the infringement proceedings initiated against Member States, see: .htm

Contacts :

Emer Traynor (+32 2 292 15 48)

Natasja Bohez Rubiano (+32 2 296 64 70)

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