The European Commission has formally requested Cyprus to amend its legislation on depreciation scales for the calculation of excise duties on second-hand motorcycles because the current rules discriminate against imported motorcycles.
Under current Cypriot legislation, owners of second-hand motorcycles have to pay an excise duty depending on the depreciation of these vehicles, i.e. their loss in value over a certain period of time. However, the Cypriot legislation only takes into account the criterion of age when calculating the duties and limits it to 10 years. In practice, a motorcycle that is two or three years old would depreciate at almost the same pace as a motorcycle aged four or five years old and depreciation for vehicles aged fifteen or twenty years would remain the same as for vehicles ten years old.
Such a system could result in higher taxation for second-hand motorcycles imported to Cyprus than for those already registered in the country and is therefore in breach of EU rules on tax discrimination against products imported from other Member States (Article 110 of the Treaty on the Functioning of the European Union). The Gomes Valente case (C-393/98 of 22 February 2011) is authority that such discriminatory tax treatment is in breach of EU rules.
The European Commission considers that the current legislation is in breach of EU rules on tax discrimination against products imported from other Member States. The request takes the form of a ‘reasoned opinion’ (second step of the infringement procedure provided for in article 258 of the Treaty on the Functioning of the EU). In the absence of a satisfactory response within two months, the Commission may decide to refer Cyprus to the EU’s Court of Justice.
Further infomation: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/426&format=HTML&aged=0&language=en&guiLanguage=en
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