Martriculation?

Old Dec 17th 2016, 10:54 am
  #16  
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Default Re: Martriculation?

Originally Posted by snaphappy
As far as I can tell, Portugal get away with it because it's a fee and not a tax. Of course, we all know that there is no real difference between the two definitions.
Portugal don't "get away" with the infraction, they get fined - but the fine doesn't compare to the revenue and there is no other sanction.

One thing the UK never learned about the EU was how to sail close to, and beyond, the line - and if you're caught just cough up. But that's because the other states, with constitutional law based on the Code Napoléon, have a legal mentality different to the UK. In some ways, EU law is not a question of right and wrong, black and white, but a pragmatic fiscal exercise - i.e. is it worth being caught. If the UK had done like every other EU state and imposed its own laws regardless, the Brexit vote would have been unnecessary.
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Old Dec 17th 2016, 11:19 am
  #17  
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Default Re: Martriculation?

Originally Posted by macliam
Portugal don't "get away" with the infraction, they get fined - but the fine doesn't compare to the revenue and there is no other sanction.

One thing the UK never learned about the EU was how to sail close to, and beyond, the line - and if you're caught just cough up. But that's because the other states, with constitutional law based on the Code Napoléon, have a legal mentality different to the UK. In some ways, EU law is not a question of right and wrong, black and white, but a pragmatic fiscal exercise - i.e. is it worth being caught. If the UK had done like every other EU state and imposed its own laws regardless, the Brexit vote would have been unnecessary.
Thats another expat myth,the only infringement of the rules was the application of IVA to the the charge.
EU law allows every member to set its own tax regime which is all that Portugal is doing.
The rules on new vehicles for the home market is exactly the same as on second hand cars.
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Old Dec 17th 2016, 12:55 pm
  #18  
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Default Re: Martriculation?

Originally Posted by EMR
Thats another expat myth,the only infringement of the rules was the application of IVA to the the charge.
EU law allows every member to set its own tax regime which is all that Portugal is doing.
The rules on new vehicles for the home market is exactly the same as on second hand cars.
Not true, the EU Court of Justice ruled that the tax on used vehicles imported into Portugal from another member state violates the rules on the free movement of goods, in terms of the devaluation tables used when calculating the tax to be paid (obviously, this tax would not be applicable to vehicles within Portugal).
“Portugal applies the same tax on used vehicles under one year old at the same rate as new vehicles and on vehicles over four years old the rate is 52 percent regardless of their real state”.
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Old Dec 17th 2016, 1:05 pm
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Default Re: Martriculation?

Originally Posted by macliam
Not true, the EU Court of Justice ruled that the tax on used vehicles imported into Portugal from another member state violates the rules on the free movement of goods, in terms of the devaluation tables used when calculating the tax to be paid (obviously, this tax would not be applicable to vehicles within Portugal).
As it is a registration tax (as opposed to an import tax), it does, in fact, apply to vehicles within Portugal. It is applied as a one-off tax the first time the vehicle is registered - and therefore applies to vehicles manufactured and sold new in Portugal. It's not required to be paid again once the vehicle has been registered though, so the only used vehicles to which it applies are those which are imported.

The principle of charging the tax is not at issue as far as the EU's concerned - merely the method of calculation.
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Old Dec 17th 2016, 1:30 pm
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Default Re: Martriculation?

Originally Posted by Red Eric
As it is a registration tax (as opposed to an import tax), it does, in fact, apply to vehicles within Portugal. It is applied as a one-off tax the first time the vehicle is registered - and therefore applies to vehicles manufactured and sold new in Portugal. It's not required to be paid again once the vehicle has been registered though, so the only used vehicles to which it applies are those which are imported.

The principle of charging the tax is not at issue as far as the EU's concerned - merely the method of calculation.
You can find references going back at least 15 years with regard to the levy on imported vehicles.
15 years of expats and the expat press saying its going to change soon.
As I say do not hold your breath, what may be given with one hand will be taken away by another.
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Old Dec 17th 2016, 1:37 pm
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Default Re: Martriculation?

Originally Posted by Red Eric
As it is a registration tax (as opposed to an import tax), it does, in fact, apply to vehicles within Portugal. It is applied as a one-off tax the first time the vehicle is registered - and therefore applies to vehicles manufactured and sold new in Portugal. It's not required to be paid again once the vehicle has been registered though, so the only used vehicles to which it applies are those which are imported.

The principle of charging the tax is not at issue as far as the EU's concerned - merely the method of calculation.
Agreed, sorry if I was not clear - that's why I stressed that it applied to used vehicles, tax is only be applicable to a vehicle on first registration.

The ruling basically says that the requirement to pay tax to import a vehicle previously taxed within the EU - at a rate which does not reflect the current value or condition of the vehicle - is discriminatory and in contravention of the principle of free movement of goods within the EU.
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Old Dec 17th 2016, 6:10 pm
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Default Re: Martriculation?

Originally Posted by EMR
You can find references going back at least 15 years with regard to the levy on imported vehicles.
15 years of expats and the expat press saying its going to change soon.
As I say do not hold your breath, what may be given with one hand will be taken away by another.
There have been a number of alterations in the past, some of which may have been in response to objections from the EC and I'm sure there are some already published for 2017.

As far as I'm aware you are correct in saying that Portugal has never been sanctioned over this matter even though it is frequently stated that Portugal just pays the fines and continues breaking the rules. I've done a number of searches in the past and have never come up with any reliable reference to any fines being applied. Normally a non-compliant state gets a warning and a reasonable time to rectify the matter before a sanction is applied - as has happened during this last year when the Commission disputed the matter with the government and the government has responded.

I also agree that the changes may have little or no effect on the monetary amount of the tax on used vehicles. From what I gather, the depreciation calculation will indeed be changed by adding more sub-scales from 6 - 10 years and discounting up to 80% rather than stopping at 5 and 52%. However, henceforth the depreciation will only apply to the cylinder element rather than both the cylinder and emissions. This will actually have the effect of raising the tax on used vehicles. And (presumably) the volume of complaints from those expats who are predisposed towards calling it an illegal tax, even if (as seems quite likely to me), it might actually pass muster in terms of being within EU regulations in this area

Last edited by Red Eric; Dec 17th 2016 at 6:14 pm.
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Old Dec 17th 2016, 6:56 pm
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Default Re: Martriculation?

Originally Posted by Ton
...
Ah, at least I'm using the simulator correctly!...
Can you please post a link to the simulator. Thanks.
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Old Dec 17th 2016, 8:31 pm
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Default Re: Martriculation?

Emr is correct in saying that Portugal is only breaking rules by adding iva to the tax, imposto automóvel itself is not the issue(unfortunately)

EMR, when I said there were to be changes in 2017, I meant for the worse! But let's see as like you say there are always people saying in January it will get better and equally there are others saying the opposite, I doubt there will be drastic changes but it did already get more expensive in November(as did new cars)

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Old Dec 18th 2016, 7:24 am
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Default Re: Martriculation?

Originally Posted by gedscottish
Emr is correct in saying that Portugal is only breaking rules by adding iva to the tax, imposto automóvel itself is not the issue(unfortunately)
Except that the ECJ has also ruled that Portugal is not breaking the rules in applying IVA on top of ISV :
No comunicado de hoje, o ministério das Finanças afirma que o tribunal tomou esta decisão depois de concluir que a natureza e as características do ISV integram-no no conceito de impostos, direitos aduaneiros, taxas e demais encargos que devem fazer parte do valor tributável das operações sujeitas a IVA.
Tribunal europeu valida cobrança de IVA sobre ISV nos automóveis


Here is a link to that judgement in English :
EUR-Lex - 62010CJ0106 - EN - EUR-Lex

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Old Dec 18th 2016, 8:47 am
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Default Re: Martriculation?

Some of the loudest complaints about import tules I have heard have come from Brits driving UK reg cars.
A recent correspondent in the Portugal news referred to UK vehicles which when checked on had not been taxed or mot for some years but are still be driven on the roads in Portugal.
Whatever the rules there will always be those who think that they do not have to conform
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Old Dec 18th 2016, 9:06 am
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Default Re: Martriculation?

Actually, it's a bit unfair to imply that only expats complain about the vehicle taxation issues - there's plenty of noise from the home crowd on the matter, too.

Essentially, nobody wants to pay taxes, so they all latch on to "it's illegal under EU law" very readily.
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Old Dec 18th 2016, 9:55 am
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Default Re: Martriculation?

There's a difference between a state's requirement and ability to raise taxes and protectionist measures instituted to prevent the free movement of goods.

Portugal has high taxes on vehicle purchase and a high rate of IVA. It is reasonable for the state to levy a charge sufficient to ensure that people do not import vehicles specifically to avoid paying the taxes levied on new cars in Portugal. However, it is not reasonable for the state to penalise the importation of used vehicles by taxing them again - and at the same rate as for new vehicles. It is also not acceptable for them to assign arbitrary levels of discount.

By levying tax on the importation of used vehicles which have already been purchased, tax paid, within the EU, the state is explicitly penalizing the free movement of goods in order to protect its own market and revenue. However, this does not absolve anyone of the duty to drive a legally taxed and insured vehicle - and those that do not do so should be prosecuted to the fullest extent of the law.
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Old Dec 18th 2016, 10:25 am
  #29  
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Portugal does not have a vehicke manufacturing industry that supplies the home market in any significant volume so its tax on imported vehicles can not be described as protectionist.
You should also consider the effect on the fragile economy of increased imports if prices dropped .
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Old Dec 18th 2016, 11:07 am
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Default Re: Martriculation?

Originally Posted by EMR
Portugal does not have a vehicke manufacturing industry that supplies the home market in any significant volume so its tax on imported vehicles can not be described as protectionist.
You should also consider the effect on the fragile economy of increased imports if prices dropped .
The protectionism is that of protecting the state's revenues, this is an issue of taxation, not manufacturing. You are also consistently ignoring the fact that this issue is about the treatment of the importation of USED vehicles, where tax has already been paid on initial purchase within an EU member state and has not been refunded. It does not refer to new vehicles, it does not refer to vehicles imported from outside the EU, it does not refer to vehicles where no tax has been paid. It also does not impinge on the state's ability to collect the difference in the level of taxation applicable in the "home" state from that applicable in Portugal, save that this be done in an equitable manner and with reference to the age, condition and independent value of the vehicle concerned.

With regard to the "impact on the fragile economy", revenue lost could easily be recouped were Portugal, like other EU states, to view the provision of cars, fuel and other work-related benefits as fully taxable income rather than perks for the middle-class. But this might see a drop in the number of high-end vehicles on the road.....

Personally, I drive a Portuguese vehicle - however that does not mean that I regard inequitable treatment as justified by the bureaucratic inefficiencies of the system.
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