New change in vehicle registration tax

Congress has approved freezing the increase suffered by the tax on January 1 as a result of the entry into force of the WLTP reference to calculate the tranches

The Finance Committee of the Congress has approved an amendment of the PdeCat -with the favorable vote of PP, Vox and ERC- that reverses the increase in the registration tax produced at the beginning of the year as a result of the entry into force of the new community regulations for measuring consumption and emissions based on the WLTP cycle (Worldwide Harmonised Light Vehicle Test Procedure). The amendment has been included in the Law on Measures to Prevent and Combat Tax Fraud, which has yet to pass the Senate procedure.

This type-approval procedure began to be applied in Europe on 1 September 2018 to replace the old NEDC with the aim of making more realistic calculations of both the fuel consumption of vehicles and their CO2 values; however, the Ministry of Industry, Trade and Tourism established a transitional regime for this cycle to be activated in our country on January 1, 2021.

The main difference between the defunct NEDC and the current WLTP is that the latter is based on real driving data and better reflects on-road consumption from subjecting vehicles to more demanding driving tests. And this means that the CO2 figures obtained with the current cycle are higher than those obtained with the previous one, which directly affects the taxation of the registration tax, calculated by emission tranches. Thus, the bulk of the cars registered since the beginning of the current year pay more than before, which has raised the complaints of the sector, very touched by the coronavirus crisis.

The main difference between the defunct NEDC and the current WLTP is that the latter is based on real driving data and better reflects consumption and emissions.

In reality, it is not that the Government has raised the registration tax but, when taking as a reference the WLTP data -which, as we have said, are higher than those of the previous NEDC-, there are fewer copies that are exempt from paying it and others that jump from section. Currently, vehicles that expel up to 120 gr of CO2 per km are exempt from the tax; those who emit between 121 and 160 g/km pay 4.75%; those between 161 and 200 grams must pay 9.75%; while those who exceed that figure are taxed at 14.75%.

In 2020, around 70% of new vehicles registered in Spain were exempt from paying the tax for emitting less than 120 g/km of CO2. On the other hand, during the first quarter of this year, only 35.7% have stopped paying it, according to data from the Tax Agency.

From the employers’ association of manufacturers Anfac had requested the extension of the entry into force of the new homologation system to avoid the price increase that has caused. Another solution was to do the same as France or Portugal, i.e. to increase the reference values of the tranches by 20%.

In this last line is the proposal of the PdeCat, which raises to 144 g / km the emissions to type 0; up to 192 g/km of emissions taxed at 4,75 %; up to 240 g/km those taxed at 9,75 %; and from 240 g/km those with a tax of 14.75%.

The proposal of the PdeCat raises to 144 g / km the emissions that are exempt from paying the registration tax

The president of the National Association of Vehicle Sellers (Ganvam), Raúl Palacios, has applauded the approval in Congress of the modification of the sections of the registration tax to adapt it to the new emission measurement system (WLTP) that came into force in January. “If the Senate approves it, it will favor the consumer and contribute to reactivating demand,” said Palacios, who, however, has called for the implementation of a long-term strategy to encourage sustainable mobility and improve air quality without adding more tax pressure to the sector.

The spokesman of the PdeCat, Ferran Bel, explained that he expects the change in the tax to be approved before the end of June after the passage of the law through the Senate, where a majority already took forward in January a non-law proposal in that sense, so now it will be possible to “reproduce the vote” again for this approval.

Bel has indicated that there will be no refunds to those who have paid this tax during this half year, but this tax burden will be avoided from this summer, while recalling that it is a tax for “the same vehicle with the same emission load” as until December 31.

Source: The Vanguard