Catalonia will tax 3.6 million vehicles for CO ₂ emissions

The details of the application of the tax on _CO2 emissions from vehicles in Catalonia are finalized. Political, legal and technical obstacles had delayed the implementation of the tax, which was already included in the Climate Change Law, approved in 2017. Once the obstacles that have accompanied this tribute have been overcome, the way is clear. In total, 3.6 million vehicles will have to pay the tax, which will begin to be collected next year, although the receipts will be dated December 31, 2019.

The fine print of the new tax is included in a draft law prepared by the Department of the Vice-Presidency and Economy and Hisenda that will be approved shortly by the Government.

The document incorporates some modifications to the Climate Change Law, to give more consistency to the new taxation and solve some legal deficiencies and inaccuracies that complicated its application.

The tax will tax vehicles based on their emissions into the atmosphere, so that it penalizes those that emit more _CO2 and therefore contribute more to warming.

Those who throw less than 120 grams of _CO2 per kilometer will be exempt from this payment in 2019, and from 2020 they will pay the tax by exceeding the bar of 95 g / _CO2 / km. The ultimate sense is to promote a cleaner fleet by giving ecological signals to the market.

Cars and vans will be taxed in 2019 (although the receipt will be collected in 2020) while motorcycles will be incorporated in 2020 and will pay it in 2021. On the other hand, trucks will not be taxed, although the Government does not rule out that they may do so in the future.

Technical hurdles overcome

The Government promotes a modification of the Climate Change Law

The amendment of the law stems above all from the need to fix the tax on older cars, which lack information on their emissions. The Generalitat found that a large part of the vehicle fleet does not have the figure of the volume of emissions in the technical sheet of the vehicles.

Therefore, “we have done studies to obtain a formula that allows us to determine the emissions of those vehicles for which we did not have emissions data,” explains Marta Espasa, secretary of hisenda of the Government. Various parameters have been considered (fuel, power, displacement, mass, age …), in all of which the Barcelona Supercomputing Center has collaborated. The estimated emissions reading affects between 40% and 50% of total vehicles.

The initial intention of the Government was to apply the tax in 2018, but successive delays have meant that in practice it has to be formally delayed until 2019.

Marta Espasa

It will be the most important own tax of the Generalitat according to the number of taxpayers

Secretary d’Hisenda of the GeneralitatThe new tax will be of an annual periodicity and will have as its first date of application the year 2019 (the receipt will be dated December 31 of each year). “This will be the most important own tax of the Generalitat according to the number of taxpayers; in total, almost three million,” says secretary d’Hisenda. It will be a tax very similar to that of other local or state taxes (IBI, or circulation tax …).

The Tax Agency already has the data of all the vehicles, which have been transferred to it by the General Directorate of Traffic.

The Agència Tributària will turn the settlements by sending them directly to the taxpayer, without the latter having to make a self-assessment. “We will set the fee and tell the citizen what to pay, as if it were another tax, such as the circulation tax or the IBI,” adds Espasa.

Secretary d’Hisenda

“The tax will be charged for the first time in 2020 but referred to the year 2019”

“The tax will be collected for the first time in 2020, but referred to the year 2019,” he says. Given that a prior notification will be made in May – against which citizen allegations would fit – and that the final register will be in September, the Secretary of Hisenda calculates that a part of payment will already be delayed until 2021.

The tax has a progressive environmental taxation structure in five tranches, so that the highest emission segments are especially penalized. In 2020, this requirement will be higher; that is, the tax is will be more expensive. Thus, in 2019, vehicles would be exempt from paying in the strip up to 120 grams per kilometer traveled – they will be taxed from that amount – while in 2020, they would begin to pay when they exceed the barrier of 95 g / km. A vehicle with emissions of 150 g/_CO2/km, for example, would pay 17.5 euros in 2019 and 44.5 euros in 2020.

On the contrary, a 4×4 with an emission volume of 218 g/_CO2/km would be punished with 76.6 euros in 2019 and 128.77 euros in 2020. The legal amendment also clarifies better that companies (car rental …) are subject to the tax when they have a branch or an office in Catalonia.

The RACC has assessed the proposal as a whole, but has expressed certain reservations. This entity maintains that “the new tax taxes possession and not use” and that large tonnage vehicles are left aside, which, in general, have more emissions per kilometer traveled. The Government replies at this point that it leaves aside trucks for now because there is no inventory of emissions available to set the tax.

Long lock

“From an equity point of view, the new tax may most significantly affect the most economically vulnerable groups,” says the RACC, who supports the argument by pointing to a certain correlation between the age of the vehicles (and, therefore, higher emissions) and some sectors of the population (young, old and low-income households).

The introduction of this tax has undergone a long process, blocked especially in the phase of application of article 155 (in which Catalonia lost its self-government) and with an appeal of unconstitutionality (presented by the PP), and finally won at this point by the Generalitat last June, because the judges interpreted that there was no double taxation, rather, it was a tax of its own.

Purpose

The resources are finalists and go to two funds to protect the climate and nature

The Climate Change Law created two funds with the resources raised: a Climate Fund to support the energy transition (aid to clean sectors) and a Fund for Natural Heritage, intended to finance actions in the natural environment, now underfunded.

The estimated income has come to be estimated at about 80 euros per year, but Hisenda prefers not to venture into these calculations, although other sources estimate that they could be even higher in the future. The RACC asks, instead, that 100% of the collection go to fleet renewal. In fact, this entity asks for a maximum annual limit of 150 euros per vehicle per year, since in some cases its associations must pay up to 300 euros

Finalist tax

A relevant element of the new tax is its 100% environmental purpose. All that is collected will go to actions to protect the environment, according to Marta Subirà, secretary of Medi Ambient of the Department of Territori and Sustainability.

“50% of the proceeds go to the Climate Change Fund, which will promote mitigation policies, such as the improvement of public transport and aid for the renewal of fleets of old and more polluting vehicles as well as policies to adapt to climate change,” he adds.

Marta Subirà, Secretary of Medi Ambient

“We need more and better instruments to deal with the climate emergency, and better manage and protect nature”

“We need more and better instruments to deal with the climate emergency,” he stresses. “The other 50% will go to the Natural Heritage Fund,” says Subirá, who recalls the importance of the United Nations IPBES report by warning of the need for more active policies for the management of biodiversity and natural spaces.

“We must better manage and protect nature, an area that has always been underfunded, and for this we need more human and economic resources. The tax will mean a leap forward in the management of the natural heritage in Catalonia by all the actors involved in the territory,” he concludes.

The automotive world

On the other hand, Anfac, Faconauto, Fecavem, Fomento and the Association of Administrative Agents of Catalonia have presented documents with allegations to the draft law. His proposal seeks to achieve a reduction in CO2 emissions “without it being necessary to introduce an additional tax” (to the circulation tax).

Common criteria

The automotive sector proposes to transform the road tax to incorporate true environmental criteria

These sectors propose to transform the road tax to incorporate true environmental criteria, focused on the use of the vehicle and that are common in all territories.

“Older vehicles are responsible for the highest _CO2 emissions and pollutants, so it is essential to promote their scrapping. Fiscal measures must be proposed with an overall vision and that respond to the bulk of the problem throughout the territory, “they say.

Their argument is that drivers in Catalonia will pay more than the rest for the possession of their vehicle.

Introducing more tax burden at all favors the economy when our goal is a more competitive taxation,” they add.

“The new tax creates other territorial inequalities. Many of the vehicles that were previously registered in Catalonia, now no longer do so. And this affects – not only the Catalan collection – but the companies in Catalonia that provide services to them”.

The keys to the new tax

1.WHEN IS IT PAID? The new tax will be of an annual periodicity and will have as its first date of application the year 2019 (the receipt will be dated December 31 of each year). The payment period is set between November 1 and 20 of the following year, that is, the first invoice must be paid in 2020.

2 WHO SHOULD DO IT? All passenger cars with a maximum of eight seats, vans for the transport of goods with a maximum mass not exceeding 3.5 tons and motorcycles (although in the latter case, their application is delayed until 2020) will be subject to the tax. Electric vehicles or utility fleets are exempt. Trucks also don’t pay, which prompts some of the allegations.

3 TO WHOM? The Agència Tributària will turn the settlements by sending them directly to the taxpayer. Previously, the Secretaria d’Hisenda will make a procedure to notify the self-assessments individually, so that the citizen can present allegations if he does not agree with the emissions that have been assigned. The final list will be presented between September 1 and 15, and against it there will still be an appeal or claim. Through the budget law of the Generalitat, the elements to quantify the tax may be modified.

4 CAN I APPEAL? The Administration will be obliged to respond to the allegations, and when the register is already final, the fee to be paid finally established will be notified personally.

5 WHAT IF I SELL THE CAR, WHO PAYS? Logically, the tax will be paid by those who at that time are the owner of the vehicle according to the registration in the General Directorate of Traffic.

Source: The Vanguard