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Brussels, 20 November 2009

Car taxation: The European Commission asks France to change a discriminatory aspect of its legislation relating to the 'malus tax' for second-hand vehicles imported from other Member States

The Commission has asked France to amend, within a period of two months, a specific aspect of its legislation relating to its 'malus tax', which the Commission considers discriminatory in respect of second-hand vehicles imported from other Member States. This request takes the form of a reasoned opinion (second stage of the infringement procedure provided for in Article 226 of the EC Treaty). If France does not amend its legislation within the time limit laid down, the Commission may decide to refer the matter to the Court of Justice.

The Commission supports initiatives that help to protect the environment. However, legislative developments introduced in Member States must be compatible with Community law, and in particular the non-discrimination principle with regard to products from other Member States (Article 90 of the EC Treaty).

The French legislation provides for a 'malus tax', due when the most highly polluting passenger cars are registered in France for the first time.

The Commission does not object to this scheme as applied to new vehicles, nor to its intended purpose. However, it considers that one aspect of the French legislation is not compatible with Article 90 of the EC Treaty as it has been consistently interpreted by the European Court of Justice with regard to the taxation of second-hand vehicles imported from other Member States. The provision in question relates to the method adopted by France to take account of the depreciation of second-hand vehicles which are brought into France from other Member States and are subject to this tax (10% reduction for every year since the initial registration).

The Commiss ion considers that this method is discriminatory on account of:

  • the application of a linear depreciation of 10% per year, which does not reflect the actual depreciation incurred, particularly over the first few years.

  • the use of one single criterion (and disregarding other criteria, such as the odometer reading), which does not enable account to be taken of above-average use;

  • the impossibility of challenging the application of this flat-rate method of calculation by reference to the actual depreciation of the vehicle based on an expert's report, for example.

Where taxpayers wish to obtain reimbursement of taxes levied in contravention of Community law, they must enforce their rights before the competent national courts, as appropriate. The objective of the procedure initiated by the Commission is to ensure that national provisions which may be incompatible with Community law are changed for the future.

The Commission's case reference number is 2008/4221.

For information on EU activities in the field of car taxation see:

For the press releases issued on infringement procedures in the field of taxation or customs see:

For the latest general information on infringement measures against Member States see:

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