Car tax – Romania faces 2-month deadline to amend the law to avoid a trial in the European Court

People in Brussels told NewsIn commissioners which took the decision today were unsatisfied with the response Romanian authorities gave to the commission’s letter sent in March. Many Romanian citizens sent letters to the EC complaining on the high tax levied in the country, the same people said.

Representatives from the Finance Ministry met in late May with EC officials to present the new reading of the controversial first-time car registration bill. The EC decided to start infringement procedures against Romania on its first-time car registration tax, calling it a breach of the country’s European Union accession treaty. The body has asked the government to modify the tax and eliminate discrepancies in the way it is applied, as it exempts used cars originating from Romania and taxes those brought from abroad.

The first-time registration tax, applied since January 1, 2007 is calculated on three variables and ranges from 68 euros for new cars to 8,586 euros for certain cars more than six years old.

The tax for a two-year old car with a 1,400 cc engine was cut from 284 euros to 139 euros and taxes for cars with 1,600 cc engine were trimmed from 324 euros to 159 euros. Romania presented the EC a fine-tuned, first-time car registration tax at the end of April in accordance with the Commission’s demands that the country calculate the tax based on the age of the car. Taxes on cars older than 15 years will also be cut from 4,579 euros to 2,861 euros.

The new method for calculating first-time car registration tax should enter into force on January 1, 2008 or six months after it is made public in the Official Gazette, as the fiscal code stipulates. Collections from the tax reached 787 million lei in the first ten months of the year, according to data form the Ministry of Finance.

Source: NewsIn