Cyprus-Forum.com

[twinkle]

Missed the news today...what exactly happened with the car tax? Is it going down for new and second hand cars?? When??? Thanks

[Sotos]

Here:

LOWER tax rates on new and second-hand cars are expected to be approved by Parliament at the end of the month, opening up the car market on the island and bringing it into line with the rest of the continent.

Under the threat of massive fines from the EU for discriminating against used car importers by charging unjustifiably high registration taxes that ignore the depreciation of the vehicle’s value, the new rates will make buying a car in Cyprus considerably cheaper.

According to yesterday’s Phileleftheros newspaper, the reductions are as follows: a car with an engine capacity up to 1650cc will be taxed at 40 cents per cc (down 10 cents), 1650cc-2500cc will have a tax rate of £2.50 per cc, while 2500cc and above will be taxed at £4.50 per cc, compared to £8 currently for vehicles over 2650cc. This means a car with a 2.7 litre engine will be subject to a £12,500 tax bill rather than the current £21,600.

The Finance Ministry said that although, in theory, revenue from taxes will be less, the expected boost to the market will cover any losses.

A spokesman at Customs headquarters was yesterday unwilling to confirm the accuracy of the figures cited by the paper, saying full details would be released after the bill goes before Parliament.

Cyprus is moving to change its law as the European Court of Justice last week ruled that Hungarian registration duty was contrary to community law in so far as it imposes a heavier burden on imported used vehicles than on similar used vehicles already registered in Hungary.

But Soteris Kolettas, Director of the Road Transport Department, explained that the ruling “would not have any effect on the Cyprus market, as we don’t impose heavier duties on second hand cars.”

Up to now, anyone who imports a second hand car to Cyprus from a foreign country must pay the same registration tax as they do on a brand new vehicle, which could even mean that the registration tax alone is greater than the car’s value.

For example, if you bought a new car in Cyprus four years ago for £20,000 (£15,000 retail price and £5,000 registration tax) and the car depreciates to a present value of £10,000, then the registration tax to import a comparable car to Cyprus should be £2,500 (half of the £5,000 registration tax for the new car). In other words, the amount of registration tax should be proportional to the second-hand market value of the car.

At the moment, however, Cyprus customs law states that if you import a car that is up to one year old, then you get a 15 per cent discount; if the car is between one and three years old, you get a 20 per cent discount; if it is from three to five years old you get a zero per cent discount; and if over five years old you get a 25 per cent penalty.
According to the law, goods in free circulation in the EU can move from one member state to another without payment of further import duty. Certain goods are said, however, to be subject to ‘excise duty’, even if they arrive from another member state of the EU. Used motor vehicles are one such good.

Duty is based on engine capacity, and is dependent on which of the given bands of engine capacity the vehicle falls within. This figure is then raised or decreased according to carbon dioxide emissions.

Worse for the consumer, a tax scheme introduced in late 2003 made regular passenger vehicles and their road tax cheaper, while proving very costly for specific groups.
For instance, the owner of a four-litre SUV was forced to pay between £450 and £500, even if the vehicle was 18 years old.

Used car dealers are said to favour the gradual abolition of all import duties. Most of them feel that, by conforming to EU law on registration tax, the used car market in Cyprus would become more competitive, benefiting both the car dealers, who face protectionist domestic used car competition, as well as the buyers who must shoulder the burden.

The new rates are in part aimed at avoiding penalties from Brussels, but are also a step towards adopting the EU’s long-term plan of eradicating all import duties for vehicles inside the bloc and transferring this onto road tax or fuel consumption tax.

buying a new car twinkle?

[twinkle]

Actually Sotos, just sold a car today at price we wanted and new car arriving at end of month so will be hopefully be subject to the reduction. Win win situation. Thanks, sweetie

[G.Man]

Perhaps they oughta do something useful with the taxes raised like implement a decent public transport system...

They could save some money by not spending so much on the army..

[chris-uk]

when are they looking to change this car duty thing. im moving over next year wana take my car with me but dont want to pay £21000 tax on it

[wagster]

If i wanted to buy a 2nd hand car that was dutyfree how do i go about working out how much duty i will have to pay on it?

[Bill]

Perhaps they oughta do something useful with the taxes raised like implement a decent public transport system...

Good idea -- but would anybody use it

It's very much a car culture in Cyprus and taking the bus is perceived as being for the old and for school children

Bill

[coredump]

http://www.cyprus-mail.com/news/main.ph ... &archive=1

Today cars become cheaper
By Leo Leonidou
(archive article - Friday, November 3, 2006)

CARS will be significantly cheaper from today after Parliament yesterday voted into law a bill lowering tax rates on new and second-hand vehicle. The new law is aimed at opening up the market on the island and bringing it into line with the rest of the EU.

The vote was unanimous with the sole exception of Green Party leader George Perdikis, who objected on environmental grounds.

Communications and Works Minister Harris Thrassou said that, “every Cypriot must have the right to a cheap motor vehicle, without taxation being a factor in the choice.”

The Motor Vehicles Importers Association welcomed Parliament’s approval saying it is, “a big step in the right direction of modernising the island’s car market. The change in the law doesn’t solve all the problems though, and we call for better quality and safety inspections and the abolition of the consumption tax, as well as more environmental measures such as regulating emissions.

According to the bill, there will now be four taxation categories instead of the previous six.

For new cars up to 1650cc, the rate of taxation is coming down to 30 cents per cc, effectively meaning a saving of between £290 and £908. Between 1650 and to 2250cc, the rate is £2 per cc (down from between £2.70 and £2.85).

The rate goes up to £3.50 for an engine between 2.25 and three litres, down from the previous brackets of £5.50 and £8. Cars over three litres will now be taxed at £4.50 per cc, a 44 per cent decrease.

Pick-up trucks will be subject to a taxation rate of 15 cents per cc irrespective of engine capacity, down from 50c.

Motorbikes up to 600cc will not be taxed. Between 600 and to 1000cc, the rate is £1 per cc, rising to £1.50 for bikes above 1000cc.

The policy on used cars is also changing. Currently, cars over six years old are taxed at 25 per cent over the regular rate but that is set to change. Under the new bill, used cars will face tax rates which decrease with the passing of every year, up to an 85 per cent discount for a nine-year-old car.

The Finance Ministry said that although, in theory, revenue from taxes will be less, the expected boost to the market will cover any losses.

Copyright © Cyprus Mail 2006

[G.Man]

lol, bikes £1 per cc...

looks like I can now afford to buy that sierra cosworth in the uk and ship it here... 9 years old, 85% discount off £4k tax... nice...

[Mickleham]

Well.... Well...


Thank God,

I never thought i will be able to get rid of my CLK and afford to buy the new Rolls Royce. But now my dream is possible, as i was short of that little bit of tax reduction.