The Malta Independent 26 June 2022, Sunday

Car taxation: EC refers Malta to European Court of Justice on legislation on annual circulation tax

Thursday, 19 May 2022, 12:15 Last update: about 2 months ago

The European Commission today decided to refer Malta to the Court of Justice of the European Union for taxing used cars imported from other Member States more heavily than used cars purchased on the Maltese market, a commission statement said.

In the absence of harmonisation of car taxes, each Member State can arrange its tax measures in accordance with its own assessments. However, Article 110 TFEU requires each Member State to select and arrange car taxes in such a way that they do not have the effect of promoting sales of domestic second-hand cars and so discourage the transfer of similar second-hand cars from other Member States.


Currently, cars first registered in Malta since 1 January 2009 are subject to a generally higher annual circulation tax than those registered before that date, due to a difference in the way the tax is calculated, in the context of a reorganisation of the car taxation system in Malta.

However, the Maltese car taxation system does not take into account the date of the first registration of the vehicle, where registration took place in another Member State, but rather the date of registration in Malta. As a result, vehicles registered in other Member States before 1 January 2009 and brought to Malta after that date are subject to a higher annual registration tax than similar vehicles already registered in Malta before that date.  

This discriminatory effect is not compatible with Article 110 TFEU, which prohibits discrimination against imported products.


The Commission sent a reasoned opinion to the Maltese Authorities on 9 June 2021 formally requesting them to amend, within two months, this legislation.

The response given by Malta to this reasoned opinion was not considered satisfactory, the commission said.

Other infringements 

Fight against cybercrime: Commission calls on Hungary, Latvia and Malta to comply with the EU Cybercrime Directive

The European Commission decided today to open infringement procedures by sending letters of formal notice to Hungary, Latvia and Malta  for the incorrect implementation of certain provisions of the Directive on Attacks against Information Systems.

The Directive is an essential part of the EU's legal framework in the fight against cybercrime and requires Member States to strengthen national cybercrime laws and introduce tougher criminal sanctions, including for large-scale cyber-attacks. Member States are also obliged to designate points of contact, available 24 hours a day, 7 days a week, to ensure improved cooperation between national authorities.

The Commission said in a statement that it considers that Hungary, Latvia and Malta have incorrectly transposed the measures set out in the Directive into their national laws, in particular when it comes to the provisions regarding certain offences, required penalty levels, and jurisdiction. Hungary, Latvia and Malta now have two months to respond to the arguments raised by the Commission. Otherwise, the Commission may decide to send a reasoned opinion.  

Fight against fraud: Commission urges Estonia, Hungary, Malta and The Netherlands to transpose EU rules to fight fraud against the Union's budget

Today, the Commission has decided to send a letter of formal notice to Estonia, Hungary, Malta and The Netherlands because they did not correctly transpose the EU rules on the fight against fraud on the Union's financial interests by means of criminal law.

These rules, which are part of the Commission's broader anti-fraud strategy, protect the EU's budget by harmonising the definitions, sanctions, jurisdiction rules and limitation periods related to fraud and other offences affecting the EU's financial interests. The issues identified mainly relate to the transposition of the Directive's provisions on the definition of criminal offences (fraud, corruption and misappropriation), sanctions and limitation periods. A proper transposition of these rules by Member States is necessary to enable the European Public Prosecutor's Office to conduct effective investigations and prosecutions.

The deadline to transpose the Directive into national law expired on 6 July 2019. Today's decision follows other letters of formal notice sent to Croatia, Finland, Greece, Latvia, Luxemburg, Portugal, Romania and Spain in December 2021; and Belgium, Cyprus, Slovakia, Slovenia and Sweden in February 2022 for non-conformity with the Directive. In addition, the Commission has also decided to close the infringement case opened against Austria in September 2019 for having failed to properly communicate the transposition measures for this Directive.

These four Member States now have two months to reply to the arguments raised by the Commission. In the absence of a satisfactory response, the Commission may decide to send a reasoned opinion, the commission said.


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