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Estonian parlt passes motor vehicle tax

The Estonian parliament on Wednesday passed the government-initiated motor vehicle tax law, with which a two-part motor vehicle tax will be implemented from next year.

Altogether 57 MPs voted in favor and 28 against passing the law.

The motor vehicle tax will consist of two parts. The first part is an annual tax paid by the vehicle owner for each vehicle registered in the traffic register. The tax rate for passenger cars will comprise a base amount, a carbon dioxide emissions component, and a gross vehicle weight component. The second part is a vehicle registration fee, payable prior to the registration of cars and vans in the traffic register.

The tax will make the acquisition and ownership of cars 5-15 percent more expensive than currently.

The registration fee will also be extended to the first change of ownership of vehicles already registered in the Estonian traffic register, and secondly, the tax for cars and vans of legal entities will also decrease with the age of the vehicle.

In addition to the first registration of the vehicle, the registration fee is also paid upon the first change of ownership of the vehicle, provided that no registration fee has been paid for this vehicle before. The amount of the registration fee is on average less than 10 percent of the approximate value of the vehicle. Registration fee rates will increase in 2028 and 2031.

The registration fee will not have to be paid when buying out a vehicle from a leasing company and transferring it to one’s name. The same applies when registering a vehicle received as an inheritance in one’s name. In these cases, the registration fee applies upon the next sale transaction.

For vehicles up to 10 years old that are taken out of the country, it is possible to apply for a refund of the registration fee.

The amount of both the registration fee and the motor vehicle tax is reduced by the age of the vehicle — both for natural and legal persons and for both cars and vans.

Emergency vehicles, vehicles intended for use by people with disabilities, and vehicles of foreign representations, according to international agreements, are exempt from the motor vehicle tax and registration fee. The motor vehicle tax will be collected by the Tax and Customs Board and the registration fee will be collected by the Transport Administration.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited.)

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