Government “ignores” Brussels’ warnings to change course over tax on imported 2nd hand vehicles

On yet another ‘burning issue’, the Portuguese government has ignored Brussels’ warnings to change course and ‘step back in line’. This time it is over extortionate rates of taxation on imported second-hand vehicles.

As reports in the media stress: “Brussels has demanded, but Portugal hasn’t budged on ISV (the name of the tax) on used imported vehicles. Neither defeats for the tax department (click here) nor threats of legal action from Brussels (click here) have made the finance ministry change its ideas”.

The proposed State Budget for 2020 – delivered to parliament before Christmas – “introduced various alterations to the ISV”, explains Público, but the European Commission “continues to say that the formula used in Portugal violate article 110º of the Treaty of the Functioning of the European Union by discriminating cars in fiscal terms on the basis of geographical origin, prejudicing consumers and dealers”.

The European Commission regularly upbraids Portugal for failing to comply with directives. Veteran campaigners against tolls on the A22 may recall that the Commission ruled in 2015 that the tolls were illegal and should be scrapped ‘forthwith’. Stories of the time claimed Brussels was ready to take the Portuguese government to court. Since then, nothing.

In other words, the threat of court action may be standard and essentially ‘empty’.

In other areas, the country IS being taken to court for its failure to adequately protect natural habitats and species (click here) and was singled out almost a year ago for censure over its “failure to prevent significant impacts of bottom fishing on vulnerable marine ecosystems”. Again, very little follow up on these issues appears in the press – but it’s more often than not that ‘nothing happens’.

That said, Jornal de Notícias reported before Christmas that there are errors in the calculation tables for ISV present in OE2020 that will need to be corrected before it can pass into law, irrespective of the discriminatory nature of the tax.

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