European Commission to take Malta to court over ‘discriminatory’ car registration fee

Malta’s defence of the registration fee it levies on second hand vehicles imported from the European Union has fallen flat with the European Commission (EC), which deemed the country’s reply as “not satisfactory” and said it would now be referring the case to the Court of Justice.

The fee, which is higher for used cars imported from other EU member states than for those purchased from the local market, has long been a point of contention.

Introduced in 2008 to protect local car importers, the EC has long held that the fee is discriminatory against European businesses and therefore incompatible with the provisions prohibiting discrimination against imported products contained in the Treaty on the Functioning of the European Union (TFEU).

The Maltese car registration system does not take into account the date of first registration of the vehicle where registration took place in another member state.

Although car taxation is not harmonised across the EU, with each state able to arrange its own tax measures, the TFEU binds member states to ensure that any system they use does 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.