AUTOMOBILE TAXES AND THE PORTUGUESE CONSTITUTIONAL COURT’S FIRST PRELIMINARY REFERENCE

Last December the Portuguese Constitutional Court (PCC) decided to resort to the preliminary reference procedure following an appeal filed by the Portuguese Tax Authority that lost a case in an Arbitration Tribunal regarding a tax assessment notice that it issued to a company that sold used cars. The notice was issued in accordance with the Vehicle Tax Code pertaining to the taxable value of used cars imported from other Member States. It establishes that the depreciation factor is applied to the cylinder component utilized to calculate the value of a used vehicle. Differently, the depreciation factor is also applied to the environmental component of new vehicles sold in Portugal. Thus, imported used cars are subject to a less favourable tax treatment, which is contrary to Article 110 of the TFEU. As a result, the Tribunal refused to apply the national provision. This presentation seeks to analyse the PCC’s first referral to the CJEU and its potential impact.