(CN) – Sardinia’s layover tax for private boats and planes gives an unfair advantage to local companies, the European Court of Justice ruled.
In 2006 Sardinia imposed the luxury tax, which applies to private planes and pleasure boats that touch down even briefly on the island off the western coast of Italy.
An Italian court had requested an opinion about the tax from Europe’s high court.
The EU court ruled that because the tax only applied to boats and planes registered outside of Sardinia, this constituted a protectionist advantage.
The court shot down the region’s argument that the fee was required to finance environmental protection, as all boats and planes pollute – not just those based outside of Sardinia.