The Tax and Customs Authority (AT) was ordered to return around 2930 euros to a taxpayer after contesting the ISV (Vehicle Tax) levied on an imported used vehicle in April this year.
The final decision, the second this year, came this time from the CAAD (Centre for Administrative Arbitration) in Lisbon, and it is not the first time, having done it last May in a similar case.
The complainant is the same in both cases, the arbitrator is new, but the decision goes in the same direction, obliging the State to refund part of the amount charged.
What is in question?
As we have already mentioned, at issue is the collection of ISV on imported used vehicles and the way in which this is applied. If originally the ISV was applied to an imported used vehicle as if it were new, rulings handed down by the European Court of Justice (ECJ) in 2009 saw the variable “devaluation” be introduced.
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That is, there are now reduction indices (percentage value) on the ISV according to the age of the vehicle. The issue is that of the two components that are part of the ISV calculation — displacement and CO2 emissions — only the displacement component was affected by the “devaluation” variable.
This is the reason behind the complaints from traders, as well as the infringement process by the European Commission against Portugal which claims that the Portuguese State is violate article 110 of the TFEU (Treaty on the Functioning of the European Union).
The tax authorities, as in the first case, allege that “the environmental component should not (…) be subject to any reduction as it represents the cost of environmental impact, and should not (…) be understood as contrary to the spirit of Article 110. of the TFEU as it aims to guide consumers towards greater selectivity in the purchase of cars, due to their level of pollution”.
The case in question
The used vehicle imported by the complainant was a Mercedes-Benz GLS 350 d with an age between 1 and 2 years — according to the ISV table for imported vehicles, the age of this vehicle corresponds to a reduction rate of 20%.
Separating the tax into the displacement and emissions components, the amounts to be paid would be €9512.22 and €14,654.29, respectively. With the 20% reduction foreseen and applied to the cylinder capacity component, the total tax due would be €21,004.94.
If the environmental component presented the same type of reduction that was applied to the cylinder capacity component, the amount to be paid on that component would be reduced by 2930 euros, precisely the amount that the tax authorities had to return to the taxpayer.
At the moment, there are three more cases under consideration by the CAAD arbitrators.
Source: Public.