Equal treatment in the EU for vehicle registration tax
When imposing vehicle registration tax, equal treatment among Member States must be ensured.
In a case related to Portugal, an individual purchased a used car in Germany in 2021 and imported it into Portugal. At the time of the car’s initial registration in Germany in 2018, Portuguese law provided a significant registration tax discount for the introduction of plug-in hybrid cars into circulation (only 25% of the tax applicable to similar non-plug-in hybrid cars needed to be paid). However, upon importation in its used state, the individual was required to pay the “depreciated” tax based on the absence of this discount by 2021 when they brought the car into Portugal, as this benefit was no longer in effect.
The customs authority calculated the depreciated tax not on the basis of the discounted tax but according to the 2021 (less favorable) regulations. The case was brought before the Administrative Arbitration Center – CAAD, which referred it to the European Court of Justice. The Court emphasized in its ruling that restrictions on the free movement of goods could occur even if equal treatment in taxation is not ensured.
Therefore, in this instance, the arbitration center must examine whether, upon importation in 2021, the individual had to pay more registration tax solely because the car in question was initially introduced into circulation in another Member State (Germany) in 2018 and not in Portugal. If so, Portuguese regulations favor the purchase of domestically used cars and hinder importation from another Member State, which contradicts the principle of free movement of goods.
