The Cypriot Ministry of Finance recently announced new tax legislation that will direct affect the taxation of the imported cars from countries of the European Union members.

The new legislation will be based on three categories:

1: For cars with engine size (displacement): up to 1650cc - £0.30cent per cc (tax)
For example a car Volkswagen golf IV 1.6 with a displacement of 1598 the tax will be:
1598 x 0.30 = £479.4 cyp

2: Cars with engine size 1651-2500cc the tax will be -£2.00 per cc
For example the tax for a Jaguar X-type V6 2.1 with a displacement of 2100cc the tax will be:

2100 x £2.00 = £4200 cyp

3: Cars with engine size (displacement): 3000 and upwards - £4.50 per cc
For example a BMW X5 4.8 litre 4799cc the tax will be:

4799 x £4.50 = £21595.5

For the imported cars the taxation is subject to discount based on the age of the car and the Co2 emissions of the car.

From the above figures it is obvious that the bigger engine cars will be better off with the new legislation but also the rest of the groups will benefited.

The Ministry of Finance said that the "loss" from the new tax legislation will be recovered and overridden from the expected market growth.

Editor: Christoforos Theodoulou