A summary of CO2-based tax schemes in Europe

You will probably know already that some European countries tax cars based on CO2 emissions and we have discussed a few examples. While this can be a bit difficult to understand, thanks to our reader Karl-Uwe, we found a complete list of what these taxes are and how they work.

However, first of all, we have to learn which taxes and/or duties are applied to cars:
  • Registration fees: They are paid at time of purchase. These are often called "Registration" or "Immatriculation" Tax (as Value Added Tax is Sales Tax) .
  • Road tax: It's also called VED (Vehicle Excise Duty) in the UK. They're the cost for the right to use cars on public roads. Also called "circulation."
  • Other indirect tax breaks are in income tax revenue calculations, tax incentives and cashback offers from each government. They're often called "bonus/malus" systems.
Of course, there are other sources of income regarding cars, such as tolls, congestion charges, parking fees, and all taxes on fuels, which we aren't considering at this time. Follow us after the jump and you will see what all these taxes look like in fourteen European countries.

[Source: ACEA]

Registration tax at purchase: 2 percent of the car's purchase price multiplied by fuel consumption in liters minus 3 (two if it's a diesel).
Cars under 120 g/km: Bonus €300
Cars over 180 g/km: €25 per gram in Malus. (160 g/km from 1/1/2010)
Alternative fuel and hybrids: Maximum €500

Government cashback if the car emits less than 105 g/km: 15 percent of the purchase price, with a maximum of €4,350.
If between 105 and 115 g/km: 3 percent of the purchase price, with a maximum of €810.
Company car taxes and deductibility of car expenses are based on carbon emissions.
The Walloon region has an additional bonus/malus system of up to €1000.

Registration tax depends on engine size and it's adjusted downward up to 30 percent when emitting less than 120 g/km and upward 20 percent when cars surpass 250 g/km.
Annual Circulation (road) tax is reduced 15 percent for cars emitting less than 150 g/km.
Premium of €683 when purchasing a car that produces less than 120 g/km, increased to €1196 if the car is a hybrid or uses alternative fuels.

Annual circulation tax based on fuel consumption and fuel type. Gasoline cars pay 520 DKK per year if they can go 20 km/l or up to 18,460 if they go less than 5 km/l. Diesels pay 160 DKK per year if they go 32.1 km/l or up to 25,060 if they go less than 5.1 km/l. There is also a registration tax at time of purchase which depends on price, but is discounted 4,000 DKK for each km over 16 km/l (gasoline) or 18 km/l (diesel). The same limits apply but inversely: 1,000 DKK to pay for each km above the mentioned limits.

Registration tax is linear depending on CO2 emissions: 10 percent of the price of the price of the car if it emits under 60 g/km up to 40 percent if it's above 360 g/km. In addition, there is an annual circulation tax which is currently based on weight but will be substituted by one based on CO2 emissions from 2010 onwards.

A bonus/malus system based on CO2 emissions: Bonus of €5,000 if the car emits under 60 g/km down to €700 if it's just under 130 g/km. Then malus for cars over 160 g/km up to €2,600. There is an additional registration tax (carte grise) depending on "fiscal horsepower," a number that takes in consideration several factors, including CO2 emissions. Finally, company cars pay a tax: €2 per gram if cars produce 100g/km or up to €19 for each gram if the car produces over 250g/km.

There will be a new system starting in 2010. Currently, the system depends on each state (Land) and is based on the number of cylinders of the car.

Starting July 1st, registration tax starts at 14 percent for cars with CO2 emissions up to 120 g/km to 36 percent for cars above 225 g/km. Hybrid and flexible fuel vehicles benefit from an additional tax relief of € 2,500.

€800 incentive if the car is under Euro IV or Euro V norms, and produces less than 140 g/km of CO2 or if an old car is scrapped. No annual circulation tax for 3 years for cars with engines smaller than 1.3 liter.

Annual circulation tax depends on CO2 emissions: you pay in g/km multiplied by 0.9 for diesel cars and 0.6 for cars using other fuels respectively and with an exponential factor (0.5 below 90 g/km and increased by 0.1 for each additional 10 g of CO2 /km).

The Netherlands
Registration tax is not only based on CO2 emissions but also on the vehicle size (width x length). If the car emits 20 percent less than cars its size, there's a €1,400 bonus, which is €1,600 malus if the figure is 30 percent over that average. Hybrid cars can qualify for an additional bonus of up to €6,400. Cars emitting more than 232 g/km (gas) or 192 g/km (diesel) pay an additional €110 per gram in excess of these thresholds.

Take out your calculators: Registration tax is based on engine capacity and CO2 emissions. Gasoline? Under 120g/km? It's €5 x g/km - 475. Diesel? Under 100 g/km, it's €15 g/km - 1,100. Then it's linear until it reaches the 210 g/km level (gasoline), where it's €115 x g/km - 19,285 - or 180 g/km (diesel), when it's € 160 x g/km) – 21,190.

Circulation tax depends on councils and they usually rely on engine size.
Registration tax depends on CO2 emissions: it's zero percent for cars producing less than 120 g/km, 4.75 percent for cars between 121 and 160 g/km, 9.75 percent between 161 and 200 g/km and 14.75 percent if the vehicle produces more than 201 g/km of CO2.

Circulation tax is based on CO2 emissions: a basic rate (360 SEK) plus 15 SEK for each gram of CO2 above 100 g/km. This sum is multiplied by 3.15 for diesel cars registered for the first time in 2008 and by 3.3 for other diesel cars. For alternative fuel vehicles, the tax is SEK 10 for every gram above 100 g/km.
There is a 10,000 SEK premium for "green cars" which is defined this way:
  • Gasoline/diesel/hybrid cars with CO2 emissions up to 120 g/km
  • Alternative fuel/flexible fuel cars with a maximum consumption of 9.2 l (gasoline) / 8.4 l (diesel) / 9.7cm3/100 km (CNG, biogas)
  • Electric cars with a maximum consumption of 37 kwh/100 km.

Vehicle Excess Duty depends on CO2 emission levels, establishing several bands, A to G, which pay from £0 to £300 (£285 if alternative fuels). Company cars pay from 15 percent of the car price for cars emitting less than 140 g/km to 35 percent for cars emitting more than 240 g/km. Diesel cars pay an additional 3 percent surcharge.

Have information about a country not listed? Add it in the comments.

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