Motoring in Spain Book Update

From the beginning of this year in Spain, as we all now know (?) when you buy a new car, the tax rates payable also depend on the vehicle exhaust emission rates as determined by the European Union Homologation Committee with their testing procedures. These involve running the car in a test-laboratory as if under standard normal loads on the roads, measuring the various toxic chemicals emitted from the exhaust and determining from them a standard amount, in this case that spewed out driven over a kilometre, and that figure can be used as a comparison with other vehicles. Not thinking of buying a new car? Like most of us, not only do the finances not run to it, but with the terrible devaluation about 50% in the first three years, it is an expensive way of getting around now with also the high cost of fuel and servicing. Most private owners have no idea how much it costs them a kilometre to just operate the vehicle although most companies do as they have to justify the costs for tax purposes. If you do not know, don’t scare yourself by working it out.

Vehicles with low rates will either be exempt from some taxes or subject to a much lower rate than before.

But there will always be those who can and will afford the new car that will either provide satisfactory transport or thrill the owner with its performance. The latter though will have to pay the prices for vehicles that are causing much frustration to drive with all the speed cameras and the general frowning on by others, many of whom are just envious or because of the higher pollution in a world that has become global-warming conscious.

We were originally sold the new “Common Market”, a phrase we now know not to be strictly true when it pays the Brits still living in the UK to drive across the Channel to France to buy bulk cigarettes and liquor thus saving enormous amounts of cash due to the taxes in France being considerably lower. Even for vehicle fuel, it is much cheaper to fill up on the Continent although that is due to change around 2014 as the EU is planning to level all the fuel taxes in the EU. That is why, in my opinion, the UK government has been seriously looking at the “pay-as-you-go” scheme to replace the potential loss of future very high fuel taxes from the motorists in the UK.

And the citizens in Britain are now being softened up for the extra tax grabs now?

But this month we are looking at the various taxes when buying a new car. So how do we all fare when buying one compared with others within the EU countries? The following tables show the VAT rates for vehicles as well as the matriculation taxes, that is the charge made by the various equivalents of Trafico here in Spain for registering the vehicle. Some countries make no charge as it must be built into the tax.

Further down the page is a table showing the diesel fuel tax differences in the EU countries.

In the first table below, Column 2 shows the VAT (or IVA in Spain) rates for vehicles (usually the standard national rates are shown for all countries), Column 3 shows any differences that apply to that country, such as the taxes depend on engine sizes or emission rates, etc. as well as first registration fees or in Spain it is called the matriculation TASA (rate), and Column 4 shows the maximum tax rate payable for the biggest engines and /or the highest emission rates for that country.

Country	VAT Rate	New Vehicle Matriculation Tax & Other Conditions.	Total Maximum Overall Tax
	%	Parameters for taxes/fees.	%
Germany	19	No First Registration Fee.	19
Austria	20	Depending on Fuel Consumption, Max 16%	30
Belgium	21	Depending on engine capacity.	25
Bulgaria	20	No First Registration Fee.	20
Chipre	15	Depending on eng. cc & CO₂	35
Denmark	25	105% up to 76.400DKK. 180% onwards	156 to 240
Slovakia	19	No First Registration Fee.	19
Slovenia	20	Depending on the price from 1 to 13%	29
Spain	16	Depends on emissions, 0 to 14, 75%	25,7
Estonia	18	No First Registration Fee.	18
Finland	22	Prices and CO₂ emissions, 10 to 40%	34 - 70
France	19,6	Depends on emissions > 3, 4%	23
Greece	19	Engine size and emissions	59
Holland	19	Price and emissions	55
Hungary	25	Depends on emissions	25
Ireland	21	From July 2008, emissions	57
Italy	20	National rate, 150,81 + 130	23
Letonia	18	€ 373	20
Lithuania	18	No First Registration Fee.	18
Luxembourg	15	No First Registration Fee.	15
Malta	18	Depends on engine 2.000 cc = 65%	93
Poland	22	Depends on engine 2.000 cc = 3, 1%	25%
Portugal	21	Engine size and emissions	58
United Kingdom	17,5	No First Registration Fee.	17, 5
Czech Republic	19	No First Registration Fee.	19
Romania	19	Engine size and emissions	22, 5
Sweden	25	No First Registration Fee.	25

We can see that Spain is by far not the worst off as far as these taxes are concerned, but look at Denmark and Ireland. But in the actual price comparisons of vehicles, Denmark is not too bad . Table 2 shows actual life-for-like car model price comparisons, showing for each sample the highest and lowest ready for delivery out of the showroom, all taxes paid, prices. Ireland seems one of the worst, Cyprus the best. Remember though if you intend to import a vehicle from another EU State that is not classed as personal property, meaning you have to have lived there for some time, you will be charged duty/taxes as in the table row for Spain.

Sample actual car prices are (Models are like for like and are at the lower end of market: no Mercedes, etc.):