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Motoring in Spain Book Update, MAY 2008

What do others pay for new cars in the other EU countries?

 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

 NOTES.

  • No First Registration Fee = No separate matriculation or first registration cost is levied.
  • Emissions = Tax payable depends on the levels of exhaust emissions (petrol or diesel)
  • CO2 = Carbon Dioxide.
  • DKK= Danish Crowns: 1 = 7.46 DKK (Denmark).

  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.):

 Car Model

 Spain Total

 (Euros)

 Highest Price and Country. (Euros)

 Lowest Price and Country (Euros)

Renault Megane.

 15.799

 20.664 (Ireland)

 12.658 (Denmark)

Ford Focus.

 14.000

 17.801 (Britain)

 12.490 (Denmark)

Citroen C4.

 15.677

 17.194 (Czech Rep.)

 13.029 (Bulgaria)

Seat Ibiza.

 8.316

 8.801 (Austria)

 7.090 (Cyprus)

Peugot 207.

 11.637

 12.040 (France)

 8.546 (Denmark)

Seat Leon.

 12.569

 12.569 (Austria)

 10.783 (Hungary)

Opel Astra.

 14.569

 17.530 (Slovakia)

 11.211 (Romania)

Renault Clio.

 11.585

 13.037 (U.K.)

 9.607 (Denmark)

VW Golf.

 13.211

 14.241 (Poland)

 10.909 (Greece)

Opel Corsa.

 10.817

 11.876 (Slovakia)

 8.281 (Rumania)

Peugot 307.

 15.580

 16.581 (France)

 11.511 (Demark)

 ___________________________________________________________________________________________________

EQUALISATION OF FUEL TAXES  PLANNED BY THE EU FOR 2014.

The governments of all the EU  countries within the EU all charge different rates for the excise duty on their fuels.  A good example is diesel fuel where large trucks operating in the UK are handicapped by paying much more tax than their counterparts on the Continent.  Even us living here in Spain know that the cost of both diesel and petrol is much cheaper in Spain due to the very high taxes in the UK, reported to be overall about 60% of the selling prices at the pumps.  This has caused the situation there where most big trucks that visit the Continent avoid filling up in the UK as much as possible thus saving many companies hundreds of thousands of pounds in costs each year, but also denying those tax payments to the UK government.   The table below shows the different taxes levied in several of the EU countries in this case for 2006,the last available information via the EU web-site, and as an example, the UK charges 693 per 1.000 litres of diesel, where as Spain charges only 294, a difference of an additional 136,7% more in Britain compared with Spain.  Another problem is that trucks also waste fuel by diverting to fill up on the way back to the UK and this is recognised as one of the problems by the EU thus increasing fuel usage and pollution amounts.

How does taxation of commercial diesel work? Do all Member States have different levels of taxation for commercial diesel and for non commercial diesel?

Member States have the option to "decouple" their excise duty rates on diesel. This means they can differentiate the rates applied on commercial diesel and non-commercial rates, by taxing diesel used for commercial purposes (HGVs and buses etc) at a lower rate than diesel used by private cars. This fiscal option may be chosen by Member States that decide to support the haulage industry.

For the time being (2006/7/8), only 4 Member States (France, Spain, Belgium and Italy) differentiate the excise duties rates applied on respectively commercial and non-commercial diesel. In other Member States, the level of taxation of commercial diesel is the same as for non-commercial diesel.

In those four Member States, there is only one diesel price at fuel outlets.    Qualifying organisations such as entrepreneurs or companies are reimbursed of the difference between commercial and non-commercial rates once they have proven that they are professional users. This is the so-called refund mechanism.

The table below gives the levels of taxation in Euros per 1.000 litres.

Austria

 325

Cyprus

 250

Denmark

 404

Finland

 319

Hungary

 339

 Lithuania

 245

 Malta

 332

Portugal

 339

 Slovenia

 303

Belgium

 305

Czech Republic

 336

 Estonia

 245

France

 392

Ireland

 368

Luxembourg

 278

Netherlands

 365

Romania

 260

Slovakia

 373

Bulgaria

 220

Germany

 470

Spain

 294

Greece

 260

Italy

 403

Latvia

 236

Poland

 303

Sweden

 394

United Kingdom

 693

What would be the consequences of a "no change" policy?

In case differences in taxation rates cannot be reduced:

  • Distortions of competition will persist on the haulage market, leading to job loss in high-taxing countries,
  • High taxing countries will also continue to experience budgetary losses.
  • Detours will continue to be made in order to benefit from those differences, which have a negative environmental impact.

For countries such as Britain, the lost taxation amount due to having to reduce the excise duty to a common EU level will have to be made up elsewhere, and perhaps this is one of the major reasons that the infamous "pay as you go" system is being mooted now to prepare the British motoring public for this system in the near future.   After all, most of the motoring taxes collected in Britain are not spent on motoring related costs, but it would be a major political problem to raise taxes elsewhere as the British are now convinced (with good cause) that they are over-taxed already.

 ____________________________________________________________________________________

SPANISH JUSTICE SYSTEM TOUGH ON OFFENDERS.

On the late evening of Friday the 19th April, a coach was carrying a group of Finnish tourists to Malaga airport on the autovia (motorway) near Benalmadena, Malaga Province.  It was very windy and pouring with rain.  A 4x4 vehicle was being driven at, as it was established later, about 155 kph  (96 mph) when the driver lost control on a curve while overtaking the coach, hit the central barrier and then collided with the coach.  In the resulting accident when the coach left the road, nine of the passengers were killed and others injured, some seriously.   The driver of the Jeep was slightly injured and when tested was found to be twice the limit allowed for alcohol.

The driver was taken into custody, and at the first Court hearing was refused bail as he is a professional driver (long-distance goods) and has to now remain in jail until the court trial date.    Why is it after all the publicity drivers still drive drunk?  It must be classed as a premeditated crime for no one goes out to drink taking the car unless they intend to drive it back home.

Let us hope that he spends a long time in jail for this terrible crime that has ruined the lives of several families who have lost loved ones, including young children, and also the lives of those injured.  Also his own life must be ruined as in my opinion he should never be allowed to drive again.

From May 1st, the new heavy penalties for certain driving crimes as listed in the book on pages 66 to 73 are now in effect, and it means jail for some offences that some drivers seem to think not worth bothering about.

 __________________________________________________________________________________________________

Woman fined 57 (46) for allegedly "adjusting or stroking her hair "while driving.  (19 May 2008)

A Catalonian (northern Spain) woman driver who was fined 57 this month (May) for using a mobile phone while driving by holding it to her ear has a problem.  Or has she?   The woman is reported to have insisted that she was only putting her hair straight (which for many women can take forever?), but the reports state that the Mossas d’Esquadra (Catalonian version of the Guardia Civil) refused to believe her.  She is reported to be appealing (the charge that is).  The thought that springs to mind is that if she had a mobile phone with her, it would have been very easy to get it out and refer to the list of received and dialled calls to show that none were made or received at the times on the charge form.    If not (unlikely nowadays), she could have insisted on being searched, but the problem is that if the fine was delayed by being sent through the post (the Press report does not say), the calls would have most likely been deleted from the phone by then, but it is worth contesting except for one point.  The costs of going to Court are much more than the fine especially with using the services of a lawyer, etc.  There is no mention made in the report of the usual 3-penalty points being lost for this offence and that would then make the Court appearance more financially worth-while.  Also she could approach her phone service-provider for a print-out of the calls made and received at that time but that also costs money and time/stress.  However, the charge could be worded that she was using a mobile and/or carrying out an action that placed the safe control of the vehicle in jeopardy (or similar in Spanish), for the reason we are not allowed to use a mobile phone while driving (along with several other listed actions) is that it is because it distracts the driver from the task at hand which is safe driving.    Then it would NOT be worth contesting it as even attending to her hair is covered by this offence. 

The moral of this tale?  Never get caught doing anything that can give the police the opportunity to say that you were not driving well.  The Spanish Government/Trafico is under pressure within the EU to greatly reduce the road accident rates which are still quite bad although better than three years ago. 

Any action such as lighting a cigarette, eating food, taking a drink from a bottle (hopefully water or similar), telling naughty children off, arguing with the boss (the wife?), checking the SatNav, changing the CD in the dash-player, etc. are all good reasons to be caught and fined, so please be aware and careful out there.  Please remember that these are all reasons that have been given as causing actual accidents in Spain.  Hence the legal specifics.

 _____________________________________________________________________________________________________________

 

Go to JUNE 2008

 

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