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  • Government.Teresa Ribera in the face of the VAT reduction on electric cars: "It is a subject to which we are open"

Buying a car today continues to be the second largest outlay that a person or family makes after acquiring a home.

Despite the fact that the renting formula grows, individuals are still betting on the acquisition, although the majority, more than 70%, finance the operation.

Whatever the formula, a new vehicle, as a good or service that it is or provides, is subject to tax.

In the case of

automobiles, they must pay VAT

(Value Added

Tax

), the

Registration Tax

, (technically it is the IEDMT or Special Tax on Certain Means of Transport) and the

Circulation Tax

(whose technical name is Tax on Mechanical Traction Vehicles).

While the first two are paid only at the time of purchase, the third is paid annually for the life of the vehicle.

VAT is a state tax, the Registration tax is transferred to the Autonomous Communities and the Circulation tax to the municipalities.

VAT

Any new vehicle purchased is subject to the

21% VAT tax

.

It will be reduced to 4%

if the vehicle is purchased or is going to be used for the transport of

people with reduced mobility

, provided that the Ministry of Finance approves the exemption request.

VAT is a rate that is imposed by Europe but the European Union does allow States for hairpins in the sections, as well as exceptions in the current pandemic situation, as has happened with masks, now taxed at 4%.

The automotive sector and the associations that promote the use of electric vehicles (Aedive) advocate a reduction of VAT on pure electric vehicles, even to 0% until it becomes a mass option.

The employers' associations of manufacturers (Anfac), dealers (Faconauto), sellers (Ganvam) and automotive components (Sernauto)

advocate a reduction to 10% of VAT on

100% electric

vehicles

to encourage their purchase.

Today, a battery-powered car is priced between 15% and 30% higher than its combustion equivalent.

With this 11% exemption in VAT, that distance would be reduced.

The fourth vice president and Minister of Ecological Transition,

Teresa Ribera

, said at the VI Nissan Mobility Forum that the possibility of reducing VAT on electric vehicles "is an issue in which we are open."

And, more recently, the

Minister of Finance

and Government Spokesperson,

María Jesús Montero

, said at the press conference after the Council of Ministers was held, she insisted that the Executive would be evaluating this possibility.

The proposal of the automotive sector would be that "diesel and gasoline vehicles pay 21%,

plug-in hybrids 15% and pure electric 10%

", as endorsed by the president of Mercedes-Benz Spain in a recent interview with EL WORLD.

Registration Tax

Spain is one of the countries of the European Union (it exists in France, Portugal or Italy) that taxes new vehicles with the Registration Tax.

Cars are taxed based on the grams per kilometer of CO2 that they expel through the exhaust pipe.

Thus, there are several

tax brackets

: 0%: emissions equal to or less than 120 g / km; .4.75%: emissions between 120 g / km and 160 g / km;

9.75%: emissions between 160 g / km and 200 g / km;

14.75%: emissions greater than or equal to 200 g / km.

This rate is in vogue since the entry into force of the WLTP, the new emission homologation test for vehicles in force in the European Union and which replaces the previous NEDC, has made combustion vehicles increase their average 20% CO2 emissions since the WLTP is a more realistic test.

In such a way that the majority of vehicles that emitted 120 g / km of CO2 to avoid paying the tax;

now they exceed the barrier of 120 grams and must pay 4.75% or even 9.75% if they exceed 140 grams.

The anger of the sector with the Government is morrocotudo.

His argument is that

he has done nothing to dilute the tax increase

that is now affected by practically all new gasoline and diesel vehicles that were previously exempt from paying for emitting less than 120 grams.

Among

gasoline and diesel

cars they

accounted for 71% of total sales in January

.

At a time of economic crisis, the sector does not understand why the Government has not supported sales by mitigating the effect of the WLTP on the tax.

In France, Portugal or Italy they have raised the tax brackets that 20% to avoid the automatic increase of the bracket and, therefore, the payment of the Registration tax.

They argue that in order to rejuvenate the Spanish fleet, which in thirteen-year-old passenger cars is one of the oldest in the EU and in commercial vehicles over 15 years old it is the oldest in the euro zone, new gasoline and diesel vehicles are key given its competitive price and that

a new gasoline or diesel car emits 85% less than one of 10 years ago.

The Government intends to reduce emissions from private transport by encouraging electromobility.

Because

new 100% electric vehicles emitting zero gr / km of C02 are exempt from paying the Registration Tax

.

The same is true for plug-in hybrids that are below 50g / km CO2 and most conventional hybrids that are placed in the range between 70 and 119g / km CO2.

In fact, there is a part of the Executive that is in favor of not only not diluting the Registration tax and leaving it as it is, but even introducing new lower sections so that only 100% electric vehicles are exempt from paying the tax. unique ones that do not emit.

Because plug-in hybrids, even if they have the

Zero Emissions

label,

when incorporating a combustion engine, expel CO2.

If this position is imposed, plug-in hybrids will leave the Zero Emissions label and will have the ECO, thus losing privileges, such as, for example, in Madrid free parking in the SER zone since vehicles with an

ECO

label

have a discount 50%, not 100% like Zero emissions.

According to Faconauto, in January, 105 million euros in taxes were not collected due to the fall in sales of passenger cars, a fall accentuated more by the impact of the closure caused by the storm

Filomena

in central Spain and the subsequent frosts than by the impact on the rise of the Registration Tax.

We will have to wait until February to see the real impact of the rate hike.

Circulation Tax

In addition to VAT and Registration, any vehicle will pay every year until the Mechanical Traction Vehicle Tax, the famous number or Traffic Tax, is canceled.

It is a tribute that is levied on the ownership of the vehicle and is paid at the town hall of the city where the vehicle is domiciled.

What happens if you buy the car in February?

The remainder of the year is paid based on the calendar quarters.

This rate is passed on to whoever owns the vehicle on January 1 of each year.

If the second-hand car is sold in April, the seller is the one who receives the notice of payment of the tax.

You can reach an agreement with the buyer to pay it until April and the second from May to December.

But legally, it is the first who is obliged to pay it.

This tax is local and

varies greatly from one municipality to another

.

Passenger cars are measured based on tax horses

.

Thus, for example, in 2019, whoever owns a tourism with 11 tax CVs in Melilla pays 17.04, compared to the 85.78 that they pay in San Sebastián, 64.06 in Barcelona or 59 in Madrid.

The automotive sector has been crying out for a year to review this tribute from the last century.

Government and employers agree on one point: the tax should penalize the most polluting cars.

That is, tax based on its use and not on its tax horses.

In this way, older vehicles, which are the most polluting, would be harmed.

Today, a new car pays the same as a 15-year-old one if it has the same tax horsepower.

A priori, the change in car taxation based on its emissions is contemplated in the new

Law on Climate Change and Energy Transition

in the so-called green taxation.

This Law is expected to be approved this year.

If the Circulation tax is not paid, the City Council could proceed to seize the car if the debt exceeds 500 euros.

To sell a second-hand vehicle you must be up to date with payments.

ITP for used cars

Second-hand

cars

are also taxed.

In addition to paying the transfer at the Provincial Traffic Headquarters, the operation is subject to the Property

Transfer Tax

(ITP) that must be paid by the buyer.

This rate is transferred to the Autonomous Communities and is paid as long as the vehicle purchased is not subject to VAT.

There is no fixed rate on this tax as the

tax

can vary

between 4% and 8% depending on each autonomous community

.

The tax base will be the higher of the sale price or the average sale price of the tables published by the

Ministry of Finance

and updated each year.

This table can also be found in the tax sections of each autonomous community.

According to the criteria of The Trust Project

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