European Direct
CARS FROM THE CONTINENT TO YOU
SAVING CAR TAX & MOVING ABROAD

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Moving Abroad? Plan ahead and save car tax(es) on your LHD car!
Make use of the EU six+ month rule and potentially save thousands in (car) tax simply by owning a (LHD) car 185+ days before transferring residence to certain EU countries! There are several areas where taxes on cars both new and used gained:

1) Setting up a secondary residence (holiday home) within the EU
Keep your car registered at your main residence. Providing the vehicle is maintained and taxed in accordance with your main residence's legal requirements, that vehicle could be used and operated at your secondary (holiday) home usually for a maximum of 182 days (less than six months).

2) Moving residence (main home) completely within the EU
Normally any VAT paid vehicle owned by you for more than either six months plus one day or one year plus one day (country depending) may be transferred as a 'personal possession' to your new home without incurring additional local car taxes that normally apply providing you keep the vehicle for a further 12 months. Furthermore, one needs to apply for re-registration either within six months or one year (country depending) of permanently leaving your previous country of residence. Typically the local taxes that apply to cars are as follows:

Country Car Tax VAT Combined Savings
vs. UK's 17½% VAT
Belgium  - 21% 3.5%
France - 19.6% 2.1%
Netherlands ca 40% 19% ca 42.0%
Portugal cc fuel co² 21% per engine size, fuel type & CO² see table
Spain 12% 16% 10.5%

3) Moving residence (home) completely to outside the EU
Normally any new and/or VAT qualifying vehicle may have its VAT refunded to you on export of the vehicle from the EU.

4) Below are links to articles which may be of use:

a) Moving abroad permanently and re-registering your UK registered vehicle abroad - General advice & tips - Q & A

What do I do & what documents are required? (pdf) 

b) Here is document from the EU regarding action taken against Denmark and Greece related to restrictions imposed on the movement of citizens against EU Directive 83/183/EEC within the EU via Car Taxes imposed:

EU Car Tax Infringement Document Example (pdf) 

This document gives some more insight as to the guidelines that exist within the EU when moving to other EU member states. 

c) Here is a newletter of recent developments within Portugal

Newsletter - Updated 14.02.08
Foreign Registered Vehicles used in Portugal (pdf)
 

d) Here a general link into the EU website offering background information on VAT and Motor Vehicles plus further links.

Information on Community Law

d) Here are the EU VAT Rates

EU VAT Rates

Are cars so much cheaper on the Continent?
You may well have heard from the UK media and others that buying your car from the Continental can produce considerable savings compared to locally supplied cars. This is the case when Sterling is strong in value compared to the Euro . This makes the buying of products from other neighbouring European countries relatively attractive, which is something one is able to take advantage of. However, recent events have caused the Sterling to weaken in value compared to the Euro thus causing prices differences to even out. This is something that has not been commented much upon in the media.

Examples:
When £1 sterling equated to €1.71 at its peak a few years ago a car costing €17,100 on the continent would require just £10,000.

At present* the rate is hovering around the £1 = €1.24 means that the same €17,100 (£10,000) car now costs £13,790 in sterling. This is £3,790 or nearly 38% more is required to obtain the very same car.

* per April 2008

Here a useful web-site that should give you the latest exchange rate indications:

latest rates of exchange of various currencies

What this Means?
Although we provide quotations for new cars, please do not surprised if the savings achieved between cars in the UK and the Continent are minimal. 

 

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