Sir,
I am following with interest your coverage of the problems arising with the customs clearing of the so-called “visitor-cars” belonging to EU citizens. I am not one of those unfortunate citizens, but like many others I am driving a duty free car under the licence of an international business company, and one day the same problem may fall upon the international business sector as well.
It is of course very logical and understandable that an EU citizen cannot be the owner of a duty free car in another EU country which he is only visiting. Being Europeans ourselves we indeed understand the European laws and regulations more or less and we know that they are mostly fair and especially logical.
As far as I am informed, VAT and import duty are being calculated based on the “fair market value” of the car. In the case of cars belonging to members of the House of Representatives, the CFR value of the car when it arrived in Cyprus is being depreciated in 100 months, i.e. at a rate of one per cent per month. For repatriated Cypriots and permanent residents, the same cars are being depreciated over a period of 120 months, and for cars purchased under the licence of an international business company, the depreciation stretches over 14 years. There should be a logic behind these three different periods of depreciation based only upon the quality of the owner of the car, but unfortunately I couldn’t find it yet.
The registration tax, which is levied on the engine capacity of a car, covers more or less the environmental damages that the vehicle will cause and the investments which the country has to make to facilitate the use of such vehicle. For this reason, it is perfectly logical that a car with a 1,500cc. engine will be taxed at £0.85 per cc., while a 3,000cc engine will be taxed at £8 per cc.
It is, however, not logical that a six-year-old car, upon clearing, will pay the same registration taxes as a brand new car. The expected life of the six-year-old car is, bravo, six years less than the one of the brand new car.
I believe that the current problem with the V-cars, and the future problems that can be expected for all other duty free cars can be solved easily, by, first of all depreciating all cars over an equal period of 100 (or 120) months and, secondly, by calculating import duties, VAT and registration taxes on the fair market value of the car upon the time of clearing. That would be quite clear, logical and understandable, even for EU citizens.
In this case, a car with a 3,000cc engine which is six years old would pay a registration tax of £9,600 and not, as it is now, £24,000, an amount that by far exceeds the value of the car.
Ronny Verhoeven
Limassol
