EC: Romania Should Lift Car Tax For Used Cars Registered In EU Until Dec 2009

The EC formulated its views based on a draft government decree that set forth a temporary exemption from the pollution tax on motor vehicles registered anywhere in the EU during the period of Dec 15, 2008 to Dec 31, 2009 provided they meet objective criteria, namely they comply with Euro 4 pollution norms and their cylinder capacity does not exceed 2,000 cubic centimeters.

"It has to be noted that tax differentiation is compatible with EU law when it is based on objective criteria. It would seem that cars brought during the same period from other member states into Romania that meet the set standard also benefit from the exemption and therefore it does not seem that the exemption breaches Article 90 of the EC Treaty. The "technical" problem referred is that the Commission estimates that used cars, which were registered anywhere in the EU during the set period and which meet the two criteria set above, should be granted the same exemption when brought into Romania after the period of exemption,” official sources told MEDIAFAX Tuesday.

The commission highlighted it formulated its views based on a draft ordinance and requested Romanian authorities to communicate recently adopted legislation.

The Romanian government decided about three weeks ago to exempt new vehicles from the pollution tax for one year and later decided to triple the value of the tax.

The government requested the European Commission’s view on the exemption alone.

Maria Assimakopoulou, spokeswoman for EU Commissioner for Taxation and Customs Union, said Friday the Commission had not been officially informed on the further car tax measures decided. She added member states are free to set their own taxation level on cars provided they observe the principle of non-discrimination and tax old or used cars as well as the new.

The government decree, published in the Official Gazette and effective as of Monday, triples the tax level for all motor vehicles with up to Euro 4 engines and temporarily exempts vehicles whose cylinder capacity is less than 2,000 cubic centimeters and which are registered for the first time in Romania or other EU member states.