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| Part of a series on |
| Taxation |
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| An aspect of fiscal policy |
Road tax, known by various names around the world, is a tax which has to be paid on, or included with, a motorised vehicle to use it on a public road.
National implementations
Australia
All states and territories require an annual vehicle registration fee to be paid in order to use a vehicle on public roads; the cost of which varies from state to state and is dependent on the type of vehicle. The fee is known colloquially as 'rego' (pronounced with a soft g, short for registration).[1] Queensland road tax is based on the number of cylinders or rotors the vehicle's engine has. There is also a small traffic improvement fee. New South Wales road tax is paid based on the vehicle's tare weight.
Belgium
Passenger cars pay a registration fee based on the engine displacement and power output (degressive towards 2014 (66% in 2012, 33% in 2013, 0% in 2014) and environmental criteria such as CO2 g/km output (increasingly towards 2014). The more CO2 g/km the car produces, the higher the fee will be.[2]
Every year, the plate number owner has to pay the annual road tax contribution. This tax is based on the engine displacement (0-799cc = fiscal HP 4, above 800cc each 200cc is one class higher).[3] Due to CO2-based regulations, diesel cars with above average displacement (>2,000cc) are favoured, and petrol cars with bigger displacements are put at a disadvantage). A supplementary annual fee has to be paid for cars that run on LPG/CNG (0-799cc: €84/year, 800–2,499cc; €148/year and >2,500cc: €208/year) to compensate financial loss for the state due to the absence of excise at the pump.
Brazil
In Brazil, the states may collect an annual Vehicle Licensing Fee (Taxa de Licenciamento Veicular) which has a fixed value for each vehicle category determined by each state. In addition, each state may impose a Vehicle Property Tax (Imposto sobre a Propriedade de Veículos Automotores), with a rate up to 4%.[4]
Costa Rica
The Costa Rican car property tax, commonly referred to as Marchamo, is among the highest in Latin America, with rates that can go up to 3.5% of the fiscal value of the vehicle yearly. When compared to the Costa Rican minimum wage (₡331,516.22 a month, equivalent to US$597.33), the tax on an average US$15,000 (₡8,600,000) car can be ₡302,000 (US$525), or 80% to 120% of a month's pay. Even though Costa Ricans receive a yearly bonus equivalent to a month's salary, the property tax negates this for most car owners, which has led to calls for tax law reform.
Opponents to the car property tax argue that common cars already pay 100% tariff when imported, meaning that a car in Costa Rica is twice as expensive as in the country of origin. Additionally, gas refills include 65% fuel tax. Owning a car that would cost US$7,500 to purchase (in the United States) for seven years can result in the owner paying up to US$29,595 in total taxes (around US$4,227.85 a year). The Ministry of Finance also has the right to step up the fiscal value of a car, effectively a negative depreciation.[5][6]
France
In France, the vignette was abolished for private vehicles in 2001 and was replaced by a tax on toll-road operators[7] at a rate of €6.85 per 1,000 kilometres travelled. In addition, a tax is levied on vehicles registered to companies. Since 2006, the tax is levied according to CO2 emissions ranging from €2 per gramme to €19 per gramme.
Germany
In Germany, the Motor Vehicle tax (Kraftfahrzeugsteuer) is an annual tax on all vehicles. It ranges from €5 per 100cc to €25 per 100cc for petrol engines and €13 to €37 for diesel engines.[8] Vehicles first registered before June 30, 2009 are taxed according to engine displacement and national/European emission class, whereas vehicles which were registered after that date are taxed solely based on CO2 emission in grams per km (g CO2/km). An on-line tax calculator has been made available.[9] The CO2 Price ist up to 4 Euros per gram.[10]
Hong Kong
In Hong Kong, the licence fee is according to the category (passenger cars, goods vehicles, taxis, etc.) of the vehicle first. Then, for passenger cars (known as private cars), it is calculated by the engine size. The lowest tax band is under 1500 cc, then the tax band changes at 2500 cc, 3500 cc and 4500 cc. Due to this system of license fee, most of 1600 cc to 1800 cc car models do not sell well. Most people prefer 1500 cc for compact cars. Due to this reason, some manufacturers provide only the 1500 cc version of their compact cars to Hong Kong market such as Toyota Corolla and Nissan Tiida. Both of these two cars only have 1500 cc version available.
By engine displacement:
- ≤ 1500 cc = HK$3,929
- 1501 cc- 2500 cc = HK$5,794
- 2501 cc- 3500 cc = HK$7,664
- 3501 cc- 4500 cc = HK$9,534
- >4500 cc = HK$11,329
Hungary
In Hungary, since 2009, this tax is based on the vehicle's engine performance and the vehicle's age. Before this so-called performance tax, this tax was based on the vehicle's weight and unofficially it was called a weight tax.[citation needed]
India
In India, road tax is imposed by the respective state governments (lifetime and also annual for commercial vehicles) also, further there could be toll for specific usage of roads (charge depends on distance, type, etc.). At the time of purchase of the vehicle, the government levies GST (Goods & Services Tax) at the rate of 28% and additional cess is levied based on the cubic capacity of the engine of the vehicle(1% for small cars with CC< 1200 CC, 3% for CC between 1200 and 1500 CC, 15% for above 1500 CC). Electric cars are levied lower tax of 5%.
The motor vehicles tax (called road tax) is calculated on the basis of various factors including engine capacity, seating capacity, unladen weight and cost price. Each state has different rules and regulations for charging the road tax.
There is proposal to have uniform rules and also tariffs across the country in line with the government's initiative of having "One Nation-One Tax".
In these days, in India there is a movement called "Digital India" in which every type of work related to every department is getting digitalized and "Ministry of Road Transport & Highways" has created a portal called "Vahan" for online road tax payment to ease the pain of paying of taxes to the government in offline mode. It is a very smooth experience to pay such taxes from home and saving time.[11]
Ireland
Vehicle registration tax applies to all new car registrations as well as imports. VRT for private cars is based on CO2 emissions as well as NOx emissions.[12]
Motor tax is payable as an annual duty (subject to exemptions) in Ireland. Prior to 2008, the annual tax levy was based on the engine size, and was ranging from €199 pa for <1,000 cc to €1,809 for >3,001 cc. Private cars registered after July 2008 are taxed at the tax rates based on the vehicle's carbon dioxide emissions. The tax bands for CO2 emissions range from €120 pa for 0-80 g/km to €2,350 pa for >225 g/km. Commercial vehicle tax is based on GVW, regardless of engine size or CO2 emissions, and range from €333 to €900 pa. Vintage vehicles are taxed at €56 pa; a vehicle is considered vintage 30 years after the date of its first registration.[13]
Israel
Combustion engine cars base purchase tax is 83% plus 7% customs tax for manufacturers from countries with no treaty with Israel plus VAT of 17% and optional "prestige tax" of 2.9% to 18% for high cost cars. This brings total tax on a new car to around 100%. Hybrid engine cars base tax is 45%, and electric cars base tax is 10%. "How come Tesla is so cheap".
Italy
As of 2023, road taxes in Italy are classified by tax horsepower and European emission standards.[14]
Japan
A tax is collected under the Local Tax Act of 1950 that is paid every May based on the vehicle's engine's displacement. The tax is then determined by whether the vehicle is for business or personal use. Brackets are determined based on exterior dimensions and engine displacement as defined under the dimension regulations. The tax to be paid is then based on the engine's displacement starting with engines below 1,000 cc, and increasing at 500 cc intervals to a top bracket of 6,000 cc and above.[15][16][17]
Personal vehicles pay more than vehicles identified as business use. If the car has been certified as a low-emissions vehicle, under the Japanese low-emission vehicle certification system, the tax obligation is reduced. Kei cars (Japanese vehicles with 660 cc engines and reduced exterior dimensions) have significant tax advantages because their tax is about a quarter of that of a 1,000 cc car.
The legislation is similar to a European approach to taxing engine horsepower, while the Japanese approach taxes engine displacement.
Automobile Tax (exterior dimensions)
- Road Tax for regular 4-wheel vehicles (Metropolitan/Prefectural Tax) vehicle plates and taxes
- 40/400 and 50/500 Japan license plates: ¥7,500
- 33/300 license plates (4.5-litre engines and below): ¥19,000
- 33/300 license plates (4.6-litre engines and above): ¥22,000
- 11/100 license plates: ¥32,000
Light Motor Vehicle Tax
- Road Tax for mini-cars and motorcycles (city/ward tax)
- Kei car: ¥3,000
- Motorcycles up to 125 cc: ¥500
- Motorcycles 125 and above cc: ¥1,000
Automobile Weight Tax
On 31 May 1971 until 31 March 2010, the Japanese government passed a law creating the Automobile Weight Tax (in Japanese). It was modified on 31 March 2010, and the next day, on 1 April 2010. The tax is paid every year in conjunction with the engine displacement based road tax. The weight determination is made in tonnes.
| Vehicle class | Tax amount |
|---|---|
| motorcycle | ¥1,500 |
| kei car | ¥2,500 |
| passenger car | ¥5,000 per tonne |
| truck | ¥2,500 per tonne |
As of 1 April 2010, the tax requirements are as follows. The determination of whether the vehicle is for business or personal use has been added, similar to the engine displacement regulations:
| Vehicle class | Personal use | Business use |
|---|---|---|
| motorcycle | ¥2,200 | ¥1,600 |
| kei car (125~250cc) | ¥5,500 | ¥4,300 |
| new kei car | ¥11,300 | ¥8,100 |
| renewal kei car | ¥3,800 | ¥2,700 |
| passenger car | ¥10,000 per tonne | ¥5,400 per tonne |
| truck (commercial vehicle) | ¥3,800 per tonne | ¥5,400 per tonne |
| bus | ¥5,000 per tonne | ¥2,700 per tonne |
31 March 2010
| Vehicle class | Personal use | Business use |
|---|---|---|
| motorcycle | ¥2,500 | ¥1,700 |
| kei two wheel(126~250cc) | ¥6,300 | ¥4,500 |
| new kei car | ¥13,200 | ¥8,400 |
| renewal kei car | ¥4,400 | ¥2,800 |
| passenger car | ¥12,600 per tonne | ¥5,600 per tonne |
| truck (commercial vehicle) | ¥4,400 per tonne | ¥2,800 per tonne |