Brussels takes Portugal to court over ISV tax on imported vehicles
Brussels decides to carry out its threats is attacks Portugal in justice. The European Commission has brought an action against Portugal before the Court of Justice of the EU for the fact that used vehicles imported from other Member States continue to be subject to higher taxes than those applied used cars acquired on the Portuguese market. Brussels had given an ultimatum to Lisbon to change its legislation on the ISV tax but it did not do so, arguing that the calculation of the tax was thus done to fight against climate change. Lisbob, the expatriate assistant in Portugal, tells you all about this legal battle between Brussels and Lisbon over the ISV tax.
Brussels takes Portugal to court over ISV tax on imported vehicles
Brussels recalls that "according to EU rules, no Member State may impose, directly or indirectly, on the products of other Member States, regardless of their nature, higher than those which apply, directly or indirectly, on similar domestic products ", but Portugal continues to apply a higher tax burden to used cars imported from other countries of the European Union.
According to the European Commission, "the Portuguese legislation in question does not fully take into account the depreciation of vehicles imported from other Member States" and is therefore incompatible with the EU Treaty. For its part, Portugal indicates that it does not want to change its rule for calculating the ISV tax, arguing that it is thus made to fight against climate change.
IUC tax is a polemic topic between Brussels and Lisbon
Recalling that the Court of Justice of the European Union had already concluded, on June 16, 2016, that an earlier version of this Portuguese tax was already contrary to EU law, Brussels explains that the decision to refer this question to the Court of Justice "follows from the fact that Portugal has not changed its legislation to bring it into line with EU law, following the reasoned opinion of the Commission" and has ignored the ultimatum which was given to it sent at the end of 2019.
Brussels recalls that it sent Portugal a letter of formal notice on January 24, 2019, followed on November 27 by a "reasoned opinion", the second and last step before lodging an appeal with of the Court of Justice, which the Commission has accomplished "since Portugal has not yet fulfilled its obligations".