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Car duty question

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Postby Crivens » Sun Apr 10, 2005 3:35 pm

Oh, and just a thought, is it easy enough to get AC fitted to the car in Cyprus, or is better to get it in the UK? My only thoughts are I don't want to buy new (mug), and the MX5 doesn't normally come with AC second hand. I would reckon the advantage for the UK is that there will be more garages who can install the precise model for the car. Now I would also assume (largely from European friends in hotter countries) that fitting AC to your car in Cyprus should also be considerably cheaper than in the UK (think is about £1500GBP in the UK). So, does anyone have any knowledge in the area?

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Postby Svetlana » Sun Apr 10, 2005 4:36 pm

I suspect virtually all new and used MX5s in Cyprus have a/c; the used ones come from Japan and I assume no-one will attempt to sell new cars in CY without a/c.

I too used to drive crazy cars in the UK but we do not have the roads for it here.

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Postby Crivens » Sun Apr 10, 2005 4:48 pm

Fair enough with the AC comment, but with the price difference between cars in the UK and cars in Cyprus, then I could buy AC and have a very large amount of change. ie. Thousands. I just thought that getting AC fitted in Cyprus would be cheaper. Have a feeling though that will be a lot easier to get it done here (near London), where we have lots of garages. And there is a Mazda one down the road.

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Postby Svetlana » Mon Apr 11, 2005 2:33 pm

Section 1 Questions and Answers

Now that we are all members of the EU, is there any import duty payable on cars brought in from another EU country?
To clarify this point, there is no import duty payable on cars brought in from another EU Member State. However, all imported cars, whether new or used, are subject to the payment of a local tax, which is called Excise Duty and this duty varies according to the cubic capacity of the engine. In certain circumstances, people may apply for relief from this duty.

Who can qualify for this relief? People can qualify for this relief if they fall into two categories. These are:
Retired Status and
Those people applying for relief under the Transfer of Normal Place of Residence Regulations.
The major difference between these two types of relief deals with where the car is purchased. For cars bought in Cyprus, relief from Excise duty must be applied for under the Retired Status regulations. For cars pre-owned in the UK for example, relief must be applied for under the Transfer of Normal Place of Residence regulations.

You mentioned earlier something about Transferring Your Normal Place of Residence. What does that mean?
This piece of legislation covers those people who move their permanent place of residence from a Member Sate of the EU to Cyprus. The legislation allows them to import into Cyprus their personal effects without payment of Excise duty or VAT. This includes the right to import a private motor vehicle.

Are you saying that someone can buy a brand new car in the UK and then import it into Cyprus without having to pay Excise Duty or VAT?
No I am not. To qualify for this relief of Excise duty, you must have owned and used the vehicle in question for a period greater than 6 months and 6,000kms. The car must be re-registered in Cyprus and, depending upon the engine size, this can be costly. This new legislation even also allows the person to work in Cyprus.

Surely then, everybody will simply bring in their own cars into Cyprus whenever they move here permanently?
People should bear in mind the potential pitfalls of such a decision. Why should they import a duty paid car into Cyprus when they may be entitled to buy a car Duty Free in Cyprus? If they import a UK car into Cyprus, are they sure that their particular car can be supported here? What about spare parts and servicing for example? Have they taken into consideration the cost of shipping and Marine Insurance? What can they do about their car when it is time to exchange it? They are unable to sell it on without payment of the Excise Duty.

Can those people who have a Retired Status duty free car sell their car to another entitled person?
The simple answer to that question is No. Once a car has been registered, as Duty free, the Excise duty must been paid when disposal permission is granted.

Can an existing owner of a Duty Free car buy another car without having to pay the Excise Duty?
In order to answer that question, it is important to realise that there are two different types of Registered Duty Free vehicle currently on our roads. These two types are:

Offshore Company Status
Retired Status
Offshore Company Status was abolished some time ago and therefore those people currently enjoying this benefit are unable to purchase a replacement vehicle.

However, those people who currently enjoy a Retired Status Duty Free vehicle are entitled to change their vehicle at any time provided that they still qualify under the existing regulations. Moreover, as husband and wife, they could be entitled to one Duty Free car each.

I still see some of the old 'V' registered cars on the road. I thought that they were abolished?
You are quite right. Visitor status was abolished on the 1st of May 2004. However, these cars that you still see on the road will fall into one of three categories.

Individuals who have paid the Excise Duty, registration fees and the VAT are then entitled to drive their vehicle on the road until the re-registration process has been completed and their new number-plates have been issued.
Other 'V' plate owners may have applied for, and been granted permission to own a car under the Retired Status Scheme. Again, they are entitled to legally drive their vehicle on the road until the registration process is complete.
Unfortunately, the third category is the most worrying. I believe that some owners of 'V' registered duty free cars have simply ignored the changes of regulations and have done nothing with their cars. These people are breaking the law. Under the Visitor Status regulations, you were given permission to drive your car until the 1st of May 2004. Those owners who have done nothing risk the following:
Driving with invalid insurance
Driving without valid road tax
Accruing severe Customs fines
Possible seizure of the car by Customs
This is obviously a complex subject. Where can we go to for more information and advice?
Anybody with access to the Internet can visit www.mof.gov.cy/customs for a copy of the regulations. However, people are individuals and each scenario is different.

For your convenience, we have reproduced the relevant information from the “Republic of Cyprus Customs and Excise” below.



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Section 2 - Extract from the Cyprus Customs & Excise web site

Goods in free circulation in the EU can move from one member state to the another without payment of further Customs import duty. To be exempt from paying further import duty in Cyprus, proof of Community status of the goods must be provided.

If you are transferring a car for private use to Cyprus from another member state, you may prove its Community status by producing:

1. In the case of a brand new or used vehicle, a document called a T2L or T2L. which is obtainable from the previous Member States:-

Customs Service
Vehicle supplier or
Shipper. OR
2. In the case of used vehicles only, the number plates and the vehicle registration document issued by the vehicle registration authority the member state.

Failure to provide proof will make you liable to pay the import duty in addition to the excise duty and VAT.


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Aliens retiring and residing permanently in Cyprus.

Are you entitled?

Under the conditions laid down below, you are entitled to relief from excise duty if you are an alien national having taken up permanent residence in Cyprus without exercising a profession or occupation of any sort.

You are entitled to apply for relief on new or used

Saloon type motor vehicles
Station-wagons
Jeep (4 x 4) type vehicles
Mini-buses capable of carrying up to nine persons.
You are not entitled to apply for motorcycles or other types of motor vehicles.

Relief is granted on the whole amount of excise duty for one vehicle per person.

If you have claimed relief on a new vehicle, you will have to pay VAT. If however the vehicle is used and VAT on it has been paid in another member state of the EU and has not been refunded because of its transfer from that state, you will not have to pay VAT.

Relief will be granted if:

you have taken up residence in Cyprus
you do not exercise a profession or occupation of any sort
none of the members of your family shall be engaged in any type of work in Cyprus
the vehicle shall be transferred to Cyprus within a reasonable time period from the approval of the application.
How to apply for relief.

A claim for relief must be made in person by you, by completing Application for relief on motor vehicles imported or acquired by aliens who live permanently in Cyprus Form P17, on arrival in Cyprus.

The claim must be submitted to the Relief Section of Customs Headquarters in Nicosia and be accompanied by the following evidence:

passports of yourself and of your spouse
evidence of the place of stay (purchase or lease agreement of a house in Cyprus, permission to purchase immovable property within Cyprus)
certificate of registration as an alien
residence permit from the Immigration Officer
your driving licence (of Cyprus or of the country you are coming from)
documentary evidence that you are financially independent and that you receive an income from abroad (e.g. bank statements, pension payment certificates, etc.)
You should take copies of all the above documents.

If your application for relief is granted:

You will have to complete form SAD. If you cannot complete it on your own, you may use the services of a clearing agent. You may produce your SAD at any Regional Customs Office. Customs will issue Form C72A and a copy will be give to you. The vehicle must be then produced, together with Form C72A and other documents relating to your vehicle, to the Department of Road Transport for inspection and registration purposes.

Conditions after importation.

You shall not sell, lend, pledge, rent, export, transfer or dispose off it otherwise without the prior approval of the Director of Customs.
Persons entitled to drive the vehicle, in addition to you, are your spouse and dependants.
The duty-free replacement of the vehicle is permitted on condition that you continue to reside in Cyprus and you have disposed off the duty-free vehicle previously placed in free circulation and use under relief.
If you decide to dispose off the vehicle on which relief was granted you will be required to pay the excise duty.
Any infringement of the conditions is unlawful and carries severe penalties.


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Exemption of Excise Duties on transfer of your normal residence.

You can claim relief from excise duties when importing a used vehicle from another member state of the European Union.

Providing that it:

is part of your personal property;
is being brought permanently into the Republic by you
has been in your possession and use for a period of a minimum of six months in the place of your previous normal residence;
was acquired by you according to the general conditions of taxation in force in the domestic market of the member state
VAT and duties have been paid and not refunded.
you have, during the last 12 continuous months, been resident outside the Republic.
If you fail to produce the required evidence the application may be refused.

You are required to declare it to the nearest Customs Station within 24 hours from the date of its arrival.

If a public holiday or weekend follows the date of arrival, you must make the declaration on the first working day after the expiration of the 24 hours deadline.

In order not to be deprived of your vehicle until you make an application for relief and receive an answer, you may be allowed to drive the vehicle temporarily under Form C.104. A copy of Form C.104 will be given to you by Customs and you must keep it in the vehicle all the time and produce it to a Customs or Police Officer if so requested.

You may submit your application for relief to any Customs Office or to Customs Headquarters. If you get a positive answer, the procedure is not terminated there. You will have to complete form SAD. If you cannot complete it on your own, you may use the services of a clearing agent. You may submit your SAD at any Regional Customs Office, accompanied by Form C.104, which will be kept by Customs. You will not pay excise duty or VAT.

Conditions after importation if relief is approved.

The vehicle shall not be hired out
given as security
sold or otherwise disposed of without the approval of the Director of Customs and Excise Department.

If relief is not approved you must

pay the excise duty (and VAT if applicable.)
place it in a customs warehouse
send it to another member state of the EU; or
export it to a third country. In order to pay the excise duty, you will have to complete form SAD. If you cannot complete it on your own, you may use the services of a customs clearing agent.
See also: Transfer of normal residence.
See also: Transfer of normal residence from another member state of the European Union




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Other non Customs expenses to be paid:

Registration Fees

Circulation Licence (Road Tax)

Insurance

DORT Vehicle Test (MOT)

If your vehicle is fitted with a speedometer marked in miles per hour (MPH), it will have to be replaced by one marked in kilometers per hour (KPH).


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Information

For more information you may write to the following address:

The Director
Department of Customs and Excise
Corner M. Karaoli& Gr. Afxentiou,
1096, Nicosia Fax no 22302031
E-mail:headquarters@customs.mof.gov.cy

For oral inquiries you may call any of the following telephone numbers of the Reliefs Section at Customs Headquarters: 22601706 or 22601709
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