Portugal ignores Brussels ultimatum by not changing ISV tax on imported cars and even chooses to raise it
It seems that Portugal is looking for a confrontation with Brussels over the ISV tax. Indeed, while the European Commission has imposed an ultimatum on Portugal to modify the calculation of the ISV tax, Lisbon has decided to turn a deaf ear to threats and will keep the ISV tax as it is. Worse, the Portuguese State Budget indicates an aggravation of the tax for the year 2020. Neither the defeats of the Portuguese taxman in the courts nor the threat of Brussels have changed the opinion of the economy ministry of Mário Centeno. What are the consequences of this Lisbon decision ? How will Brussels react ? Lisbob, the expatriate assistant in Portugal, tells you all about this increasingly open conflict between Lisbon and Brussels.
Portugal ignores Brussels ultimatum by not changing ISV tax on imported cars and even chooses to raise it
Lisbon ignores Brussels ultimatum
2 weeks ago Brussels notified Portugal and demanded changes to the vehicle tax (ISV). Indeed, the European Commission considers that the calculation of this tax on imported cars is contrary to European law and that it discriminates against foreign vehicles. Brussels even imposed an ultimatum and had left Portugal until the end of this year to make the necessary changes.
In the draft state budget 2020 (OS 2020) presented to the Portuguese Parliament, the government introduced several amendments to the ISV, but the European Commission continues to say that the formula used in Portugal violates article 110 of the treaty on the functioning of the EU, discriminates against the tax on cars based on geographic origin and harms consumers and dealers.
In this budget, Mario Centeno told Jornal dos Negocios why he had moved ISV without making the correction required by Brussels. He said that "he will assess the notification from the European Commission and the procedure to be followed".
As for the environmental component of the ISV (subject which annoys Brussels), it also requires changes, otherwise the Portuguese State will be prosecuted for discrimination against those who buy a car abroad or for the many expatriates who come to settle with their foreign vehicle. The end of the ISV is definitely not for tomorrow.
ISV tax is a polemic topic between Brussels and Lisbon
ISV will increase for 2020
Lisbon has even decided to increase the ISV for the year 2020. In order to reflect the change in standard which measures carbon dioxide (CO2) emissions from new cars, the preliminary version of the 2020 state budget will lead to a slight increase in the purchase price of new vehicles, contrary to the fear that existed among representatives of automobile brands in Portugal.
If the solution applied in 2019 took into account a percentage reduction to be applied to the CO2 values, creating a greater distinction between carbon dioxide emission levels, going from six to nine different steps for petrol cars and to eight for diesel cars.
This table aims to value the least polluting vehicles and penalizes those which, on the other hand, are more polluting in terms of CO2 emissions. Compared to the NEDC tables, the most significant difference is in the ceiling of the first level, which was 99 g / km of CO2 and which now goes to 110 g / km of CO2 in WLTP. Thus, more vehicles are subject to the ISV.