We talked about the changes to vehicle taxation in 2021 Slavko Ažman, who is the head of the working group for taxes in the Department of Passenger Vehicles, where, after the last autumn proposal of the Ministry of Finance, he emphasized that cars will be much more expensive. The state finally flipped the plate, “swallowed” 14 million euros the more it would raise in vehicle tax from proposals two months ago, and flipped the plate.
Due to the bureaucracy of the car a month or more after buying in the garage
How do you evaluate the final text of the DMV Act? Which parts are you happy with what you need to comment as a section?
The Motor Vehicle Section welcomes the government’s decision to amend the Motor Vehicle Tax Act. The law has not yet been passed, but it is very important that the National Assembly adopts it before the end of this year. Otherwise, the new year would lead to a significant increase in vehicle taxes due to the new way of measuring CO2 emissions. During the public debate on the law at the beginning of the year, in the Section, we raised a lot of comments and proposed changes to the law. Most of the comments concerned the budget neutrality of the tax reform, the revision of the taxation of combined vehicles and the increase in taxation of electric vehicles instead of abolishing it. We are pleased to note that most of our comments have been taken into account. We believe that the new law on the DMV will provide Slovenia with a modern, comparable tax law in Europe that will help achieve common goals in the field of sustainable mobility, and we want it to be adopted as soon as possible.
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Until recently, the Chamber of Commerce and Industry warned that lower-middle-class vehicles would be taxed significantly more. What exactly has changed?
The Ministry of Finance took into account our comment that the new law must be neutral for the budget. The new version of the act accordingly reduced the minimum amounts and surcharges for individual tax classes, and also abolished taxation based on the engine power of passenger cars.
The state gave 40,000 euros to one large family
The ministry also reports: on the basis of preliminary data from the DMV valuation, in 2019 the average tax (including additional DMV) for all new vehicles was around EUR 460, while according to the proposal, the average tax will be around EUR 160, which means a reduction in the tax liability over 65%. “What will be the differences in DMV for the best-selling B and C segment cars? for basic customer models?
The new law, as has already been said, ensures, first of all, no tax increase. I believe that the statement of the Ministry of Finance that the tax will be reduced by up to EUR 300 on average is also true. Nevertheless, it should be noted that this reduction will be relatively small for the vast majority of models. In the lower middle class, the DMV will now be reduced by several dozen euros to a maximum of 100 euros, and larger changes can be expected for the more expensive vehicles and vehicles with a more powerful engine, which have been heavily taxed so far. For the models you are asking for, the new taxation will certainly not significantly affect the price. In the Polo, the new DMV would be up to three euros higher on average, on the Golf the new tax would be lower by 40 euros, and on the Passat by around 100 euros on average. The ID.3 as an electric vehicle will no longer be taxed.
Due to a tax of 61 euros, I was not allowed to drive for a month
What will the new law mean for diesel resale as for HEV, PHEV and BEV?ᐧ
The new law restores the higher taxation of diesel vehicles compared to petrol cars, although the latest EURO 6d diesel cars are the least comparable to petrol cars in terms of emissions and environmental impact. Nevertheless, we estimate that the tax differences are no longer so great that they could seriously jeopardize the sale of new diesel vehicles with particulate filters and a NOx reduction system. The law also provides an important incentive to sell electric and hybrid vehicles.
How I brought a used car from Germany and where did it get complicated
What about the taxation of imported cars?
Imported used vehicles are generally of the same scale as new vehicles. As these are older vehicles with a lower emission standard, they are subject to a higher EURO standard, but for them the percentage of the actual tax liability decreases with each year of the vehicle’s life. For the most environmentally controversial EURO 3 and lower vehicles, which cannot be sold in the EU for more than 16 years, the law provides for a surcharge of EUR 500 for petrol vehicles and EUR 1000 for diesel vehicles, but due to age at the time of importation, only 8% of this amount is payable – ie a mark-up of 40 euros for gasoline and 80 euros for diesel. Of course, this will not prevent the import of the most ecologically controversial vehicles that are disposed of in other EU countries. This solution is certainly not the most thoughtful.
On average, cars will be that much cheaper
The tax on luxury vehicles is abolished. What changes do you expect?
With the abolition of the additional tax on motor vehicles, which was introduced as a temporary measure in the context of anti-crisis measures, vehicle taxation comes closer to that of other EU countries. This means, of course, the normalization of the market and the elimination of the reasons for registering vehicles with a more powerful engine abroad. We expect to be able to sell more of these vehicles in Slovenia as a result, and the state can also expect DMV and VAT vehicles from them that would not exist otherwise.
ZPS against lower car taxation
Are you expecting more new vehicles sold next year due to the new tax? Will the plans change?
The market situation is still very uncertain. As you know, car dealerships are still closed and sales to individuals are prohibited. In such a situation, the forecasts are obviously very ungrateful, but we can certainly say that the new law is very welcome and will help us in these difficult times. We look forward to its adoption as we certainly cannot afford to raise taxes in the current context.
Why are cheaper cars not good news for Slovenes?
What will the changes in the taxation of electric vehicles mean? If I understand you correctly, they will not be taxed. Will it make it easier for consumers in Slovenia to switch to electrified vehicles?
That’s right, electric vehicles are no longer taxed, which is great news. Already in spring it was threatened with a sharp increase in taxation of such vehicles, which we also pointed out in our department. It is true that the DMV of electric vehicles has not been high even now, but it is undoubtedly a very positive gesture that shows that the country is serious about promoting sustainable mobility.