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(20:07) The European Court of Justice has ruled that aspects of vehicle registration tax constitute a form of double taxation and are therefore illegal under the EU treaty.
The ruling came after a Finnish citizen took a case against his own government.
He claimed that by levying vehicle registration tax on a used car he had imported into Finland, the government was taxing the same product twice, because the tax ignored the value of the tax already paid on the car in another member state.
The court ruled that the VRT law in Finland conflicts with the EU treaty, and is illegal. The ruling may affect the operation of VRT in Ireland, which also charges high rates of VRT.
The European Commission two weeks ago called for the abolition of vehicle registration tax.
The Commission said in the interim, states should ensure that their VRT systems did not discriminate by imposing a double taxation burden on motorists importing second hand cars from other member states.