EU court decision opens door for 120M leva excise duties rebate in Bulgaria

EU court decision opens door for 120M leva excise duties rebate in Bulgaria

A decision by the European Union Court of Justice on June 3 is set to cost Bulgarian Government 120 million leva in excise refunds to the owners of 17 000 high-powered second-hand cars.The court was asked to rule in the case of Plovdiv Regional Customs Directorate vs Petar Kalinchev, referred by Bulgaria's Supreme Administrative Court (SAC).In February 2007, Kalinchev bought in France a BMW 530 D car with an engine output of 140 kW, first registered in January 1999, with a mileage of 160 000 km. Upon returning to Bulgaria a week later, he submitted his registration request and was told that he owed an excise duty of 4900 leva.He appealed the administrative order by the regional customs authorities, arguing that he should pay the same excise duty as the owners of new cars of similar output. Kalinchev's claim was upheld by the Plovdiv Administrative Court, but the customs authorities appealed at the SAC.In its judgement, the Court of Justice said that Article 110 of the Treaty on the Functioning of the European Union precluded a member state from "applying differing rules on the levying of excise duty on motor vehicles in circumstances such as those in the present case where that excise duty is levied differently on used vehicles imported from other member states and used vehicles already registered in that state and which were imported into that state as new vehicles."The court's decision means that all Bulgarian residents who paid the higher excise duties between January 1 2007 and January 1 2010, when the higher duty was scrapped, can claim a refund, according to lawyer Mihail Ekimdjiev, who represented Kalinchev in court.According to calculations by Bulgarian daily Dnevnik, an estimated 17 000 car owners could lay refund claims averaging about 7000 leva, for a total of about 120 million leva. The refunds would cover only the difference between the excise duty rates paid for old cars and new cars, not the entire duty.Plaintiffs would need to present proof that they paid the excise duty with their local customs officials, Ekimdjiev said, and any refusal can be taken to local courts, which would have to uphold the EU Court of Justice judgment.However, plaintiffs that have already put in lawsuits and lost could not benefit from the court's decision, since Bulgaria's Administrative Procedure Code does not qualify the Court of Justice judgment as grounds for reopening a case, although plaintiffs can still attempt doing so, Dnevnik quoted Ekimdjiev as saying.The Court of Justice also rejected Bulgaria's request not to make the decision retroactive. The Bulgarian Government argued that during the current recession, having to rebate such a large amount would have a negative impact on public finances.It was only in exceptional circumstances that the court limited its rulings to singular cases, the ruling said, and "financial consequences which might ensue for a member state from a preliminary ruling do not in themselves justify limiting the temporal effects of the ruling."

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