Review of Second-Hand Car Import Tax in Cyprus

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This week's issue of the Cyprus Weekly reported the following story:
 

'A ruling by the Attorney General Petros Klerides on taxing second-hand cars imported from EU countries could spell trouble for the Finance Ministry but prove a saviour for car buyers.

 
Apparently, the current system of taxation on car imports is breaking EU and Cyprus law and if the situation is not resolved, the government is liable to return huge sums in registration fees if owners decide to take legal action.

 
There have already been two counts where individuals have claimed their dues in court and won, one case involved the importation of a 4x4 vehicle from the UK.

 
A cash-stricken government is worried its revenue could be affected as over the last three years it has collected €100m in registration duties.

 
The Finance Ministry has already calculated that required changes to the tax system on second-hand imported cars could see a drop of €20m in registration fees in 2010.

 
Proposals under review include scrapping the registration tax for a fixed fee for all vehicles regardless of model type and engine size.

 
Or for tax for each imported used car to be set based on evaluation of age, value and condition of the vehicle.

 
Another option is to overhaul the system altogether that incorporates registration fees and road tax but ensuring the same level of revenue.

 
A car tax revamp seems the most likely outcome as the other alternatives could encourage the import of gas-guzzling cars which is an environmental no-no.'

 
Source: Cyprus Weekly issue number 1550.

 
Guide2Cyprus - This could open the floodgates for people who feel they paid an unfair import registration duty to seek compensation through the courts.

 
It could even present a fairer cost for the import of vehicles from EU countries to Cyprus which may lead to a cheaper second-hand car market here.

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