Romania To Refund Car Tax Only If Forced By EC Or European Court Of Justice

A decision of the European Commission or the European Court of Justice is presented as a condition for the state to return all the money collected as car tax, in a document signed by economy and finance minister Varujan Vosganian.

"Such a situation, where sums collected as special taxes were returned, has been registered among member states who were forced by decision of the European Court of Justice to amend regulations for the tax perceived upon the first registration of vehicles, but for some states the sums returned represented only tax differences, and Hungary is one such example. Under these circumstances, Romania will consider refunding the tax depending on a decision of the European Commission and, if the case may be, a decision of the European Court of Justice”, the document reads.

The tax was introduced early last year, when the elimination of excises for imported vehicles thinned the state budget. The tax was immediately frowned upon by the EU, which considered it discriminating against second-hand EU imported cars. The first registration tax, as it was called, was calculated depending on engine capacity, car age and level of emissions.

The government said it would amend the tax calculation method to correlate it with carbon emissions and would introduce a procedure to reclaim sums already paid.

In Wednesday’s meeting, the government approved a memorandum redefining the car tax calculation method. Government sources told MEDIAFAX the new regulation makes no reference to the restitution of taxes collected, as the government considers the money was collected based on the Fiscal Code, which was approved by Parliament and was not contested by the Constitutional Court.

The Chamber of Deputies in plenary session last week adopted the simple motion "Cancel the car tax", and Chamber speaker Bogdan Olteanu said the stipulations in the motion are not mandatory for the government.

Vosganian said the government is not considering giving the money back to people who already paid the tax if the ordinance introducing the tax has the approval of the EU and the infringement procedure is suspended. Also, he admitted the possibility for the government to refund part of the tax, following final court rulings, as was the case with Hungary.

For this year, the government estimated revenue of RON600.8 million (some EUR188.9 million) from the car tax, down 21.7% from the level planned for 2007, of RON766.8 million.

The tax was contested by some payers, and the government already lost a trial when the Timisoara Court of Appeal deemed the tax illegal in a final irrevocable ruling.