On Monday, 30 November, the Saeima adopted in the final reading amendments to the Law on the Vehicle Operation Tax and Company Car Tax, which propose calculating the tax for goods vehicles according to the amount of carbon dioxide generated by the engine of the vehicle. The amendments are introduced as a part of the legislative package related to the state budget for 2021.

According to the explanatory note, the amendments were proposed to promote the use of cleaner and more nature-friendly goods vehicles.  Starting next year, the tax on vehicles with gross weight of 3.5 to 12 tons will be calculated according to the level of EURO class emissions.  For vehicles with gross weight exceeding 12 tons, the number of axles also will be taken into consideration.  Previously, the Vehicle Operation Tax was calculated according to the gross weight or number of axles and the driving axle suspension type of the goods vehicle. As explained by the authors of the amendments, the new tax rates have been developed to foresee lower future tax rates for vehicles with the lowest EURO class emissions.

From now on, the tax for trailers will be calculated according to the gross weight and number of axles of the trailer. Until now, the tax rate for trailers was calculated according to the number of axles of the trailer, as well as the gross weight, number of axles and the driving axle suspension type of the trailer's towing vehicle.

For goods vehicles with gross weight of up to 3.5 tons, the tax rates will be approximated to the rates currently applied to passenger cars, i.e., calculation according to the amount of carbon dioxide emissions. An additional rate in the amount of 300 euros will be applied to goods vehicles with the engine capacity of over 350 cubic centimetres.

The amendments also propose an increase in company passenger car tax rates.  The rates will increase by three euros on average, depending on the engine capacity of the car, but a new rate in the amount of 82 euros will be introduced on cars with the engine capacity exceeding 3000 cubic centimetres. According to the explanatory note, these changes were proposed to express the tax rates as a percentage, taking into account the changes in the consumer price index since 2017, to promote the use of more nature-friendly means of transport, and limit the use of vehicles with large engine capacities.

To promote the use of alternative energy sources, the Vehicle Operation Tax will be reduced by 10%  on vehicles that have additional gas systems installed.

Amendments to the Law will come into force on 1 January 2021.

Saeima Press Service