Overhaul planned for car taxation

The government is said to be pondering major changes to the way that vehicles are withdrawn from circulation and road tax is calculated.

Vehicle withdrawal could soon apply only to cars with a low market value in contrast to the current measure, which offers owners a discount or even an exemption from the registration tax for a new car – up to 1,929 cc – replacing older ones (registered up to December 31, 2001) regardless of market price.

Sources also say that the road tax threshold for diesel-powered cars – depending on their emissions – will be lowered from the current 99 grams per kilometer to 80 g/km so that more vehicles are taxed.

The government may further abolish the engine size criterion for calculating the taxes that vehicle owners pay. The various levies will instead be decided based on the vehicles’ market prices, with the registration levy adjusting gradually.

The registration tax is currently calculated according to the factory price and certain other parameters, with the levy going up depending on the size of the engine and its technology. This new method of calculation would also apply to the annual road tax and the consideration of car ownership for the verification of income tax statements.

An environmental levy may also apply to cars that are at least 20 years old.

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