Car troubles for Greece

The European Commission is referring Greece to the European Court of Justice over value-added tax (VAT) on roadside assistance contracts and over its car registration tax system. Brussels had warned Greece against charging members of roadside assistance body ELPA with VAT on their full annual flat-rate subscription, because part of the motorists’ fee should be regarded as the provision of insurance services and should therefore be exempt from VAT, as EU directives provide. However Greece has not amended its law since the official warning came to Athens in December 2004. The Commission has also decided to refer Greece to the court over its car registration taxation rules. Greece calculates the depreciation on second-hand cars imported into the country in a way that does not guarantee that the registration tax will not exceed the residual tax on a vehicle of a similar age that was registered in Greece when new, as the EU’s executive body believes, following a ruling by the European Court in a similar case. A further aspect of Greek law that the Commission has contested concerns the lack of transparency of the administrative procedure, in that the tax authorities do not disclose how they determine the taxable values of the cars. In addition, the taxpayer is obliged to pay a 300-euro fee for having the car inspected by a special committee if he disagrees with the values determined by the tax authorities.

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