Millions of expats motorists and businesses are driving into trouble when they try to move their car between countries in Europe as they find themselves tied up in red tape and taxes.
Now, the European Union is stepping in to put the brakes on scores of complaints they receive every year by introducing a Europe-wide car tax policy.
The move comes because 3 million car owners every year want to take their vehicles with them when they move to live in another EU country.
And that brings a risk of motorists facing double taxation, so now EU chiefs want to ‘harmonise’ the registration and taxes of cars to eradicate the problem.
But after moves in 2005 to bring all of the EU’s members into line failed to materialise, it has been revealed that many countries went ahead to introduce their own rules in a bid to tackle the issue of double taxation.
Unacceptable taxes
Algirdas Šemeta, the EU’s taxation Commissioner, said: “The number of tax obstacles facing car owners is simply unacceptable.
“If countries cannot agree to a system of common car taxation rules then they should, at least, respect EU principles which guard against citizens and businesses not suffering from higher taxes or discrimination.”
Now the EU is to clarify the basic rules on car taxation with a raft of measures to minimise issues for those expats looking at taking their vehicle to another EU country.
Among the ideas is to provide more information at borders on how to apply for car tax and the refunding of car tax should the driver leave the country permanently.
The EU also wants to make it easier for people to rent cars across borders.
Expats pay tax twice
There are 13 million new car registrations in the EU every year and though they make up only 1.9% of the all tax revenue, it is a growing concern that expats moving between countries have to pay twice for the privilege of driving.
Car tax problems are also seen as a barrier to the free movement of people and goods around the EU.
The debate now moves to the European Parliament where a new law imposing the requirements on member states could be ratified in the near future.
There is already a precedent for this with the EU basing its ideas on Court of Justice case law and more than 300 infringement proceedings issued by the EU to various countries.
With 230 million cars in the EU it is unlikely that there will be a return to the previous attempt at abolishing car taxes which would have seen them replaced with a ‘green’ tax on how much pollution created.
