Road tax


Road tax, known by various names around the world, is a tax which has to be paid on, or included with, a wheeled 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'. 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 and environmental criteria such as CO2 g/km output. The more CO2 g/km the car produces, the higher the fee will be.
Every year, the plate number owner has to pay the annual road tax contribution. This tax is based on the engine displacement. Due to CO2-based regulations, diesel cars with above average displacement. A supplementary annual fee has to be paid for cars that run on LPG/CNG 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 which has a fixed value for each vehicle category determined by each state. In addition, each state may impose a Vehicle Property Tax, with a rate up to 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, the tax on an average US$15,000 car can be ₡302,000, 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 for seven years can result in the owner paying up to US$29,595 in total taxes. The Ministry of Finance also has the right to step up the fiscal value of a car, effectively a negative depreciation.

France

In France, the vignette was abolished for private vehicles in 2001 and was replaced by a tax on toll-road operators 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 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. 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. An on-line tax calculator has been made available.

Hong Kong

In Hong Kong, the licence fee is according to the category of the vehicle first. Then, for passenger 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:
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.

India

In India, road tax is imposed by the respective state governments also, further there could be toll for specific usage of roads. At the time of purchase of the vehicle, the government levies GST at the rate of 28% and additional cess is levied based on the cubic capacity of the engine of the vehicle. Electric cars are levied lower tax of 5%.
The motor vehicles 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 tariff across the country in line with the governments 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 departments are 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.

Ireland

Motor tax is payable as an annual duty in Ireland.
Prior to 2008, the annual tax was levied on the engine size ranging from €199 pa for an engine under 1,000cc to €1,809 for cars with an engine over 3,001 cc.
Since July 2008, the tax rates for new private cars are based on the vehicle's carbon dioxide emissions. The tax bands for CO2 emissions range from €120 pa with emissions of 0-80 g/km to €2,350 pa with emissions over 225g.
Commercial vehicles including 5 seater large 4WD vehicles no matter what size engine or CO2 emissions are €333 the highest rate is €2345 for passenger vehicles. All vintage vehicles are taxed at €56 per year; a vehicle is considered vintage 30 years after the date of first registration.

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.
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 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)

Light Motor Vehicle Tax
On 31 May 1971 until 31 March 2010, the Japanese government passed a law creating the :ja:自動車重量税法|Automobile Weight Tax. 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 metric tonnes.
Vehicle classTax 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 classPersonal useBusiness use
motorcycle¥2,200¥1,600
kei car ¥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 ¥3,800 per tonne¥5,400 per tonne
bus¥5,000 per tonne¥2,700 per tonne

31 March 2010

Vehicle classPersonal useBusiness use
motorcycle¥2,500¥1,700
kei two wheel¥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 ¥4,400 per tonne¥2,800 per tonne
bus¥6,300 per tonne¥2,800 per tonne

Road Tax increments

The following is the tax rates for passenger vehicles used for both personal and business use, incremented by 500 cc engine displacement.
Total displacementPersonal useBusiness use
under 1-litre¥29,500¥7,500
1-litre–1.5-litres¥34,500¥8,500
1.5-litres–2.0-litres¥39,500¥9,500
2.0-litres–2.5-litres¥45,000¥13,800
2.5-litres–3.0-litres¥51,000¥15,700
3.0-litres–3.5-litres¥58,000¥17,900
3.5-litres–4.0-litres¥66,500¥20,500
4.0-litres-4.5-litres¥76,500¥23,600
4.5-litres–6.0-litres¥88,000¥27,200
over 6-litres¥111,000¥40,700

The following table is the tax bracket for lorries or vehicles built with a load carrying section without seats and a single bench seat in the front of the vehicle in an enclosed passenger compartment.
Load capacityPersonal useBusiness use
under 1 metric ton¥8,000¥6,500
1 ton - under 2 tons¥11,500¥9,500
2 tons - under 3 tons¥16,000¥12,000
3 tons - under 4 tons¥20,500¥15,000
4 tons - under 5 tons¥25,500¥18,500
5 tons - under 6 tons¥30,000¥22,000
6 tons - under 7 tons¥35,000¥25,500
7 tons - under 8 tons¥40,500¥29,500
over 8 tons¥40,500 + ¥6,300 for each additional ton¥29,500 + ¥4,700 for each additional ton

The following table is the tax bracket for buses, or vehicles designed to carry many passengers.
Load capacityPersonal useBusiness use
30 or less¥33,000¥12,000
under 40¥41,000¥14,500
under 50¥49,000¥17,500
under 60¥57,000¥20,000
under 70¥65,500¥22,500
under 80¥74,000¥25,500
80 and over¥83,000¥29,000

Latvia

The vehicle operating tax on cars first registered after January 1, 2005 that have registration certificates with information on total weight, engine volume and engine maximum power, shall be paid by summing up tax rates according to total weight, engine volume and engine maximum power of the car as follows:
An annual tax is applied to each vehicle. In 2013, as an example, the annual tax for a BMW 330D 2004 model was €224.

Malaysia

In Malaysia, the latest road tax information and calculations is different in East Malaysia and West Malaysia, which the former in general has lower rate than the latter because of the poor geographical condition and road surface. Besides, within both the two areas, the tax amount also varies according to car variants as well as engine capacity. Private cars are classified as ‘saloon’ vehicles such as hatchbacks, convertibles and sedans, whose road tax rate is different from non-saloon vehicles such as MPV, SUV or pickup trucks.

Mexico

Until 2011, the federal government charged an annual vehicle tax, Tenencia Vehicular, depending on the value and other vehicle characteristics. Although the tax was federal, the states collected the tax. This tax was created in 1961 and in 2006 represented about 1.6% of the total tax income.
In 2012, vehicle tax became a state matter with some states charging the tax, others charging a partial tax and others such as Morelos and Querétaro, charging no tax.

Netherlands

In the Netherlands, a tax is applied to the vehicle based on its weight and fuel type, and the region. Electric vehicles and classic cars over forty years old are exempt from road tax.

Norway

In Norway, a registration fee is applied to all new motor vehicles when sold new. The fee is calculated by several variables such as vehicle classification, emissions and vehicle weight and generally rewards vehicles with smaller engines, low emissions and low weight. This fee can be in the hundreds of thousands of Norwegian kroner. In addition, there is an annual road tax applied to motor vehicles, failure of payment will generally lead to license plates being withdrawn. The road tax varies by vehicle classification, as of 2013 for ordinary passenger cars it is 2,940 kr.

Romania

Annual Vehicle Property Tax

In Romania, every owner that owns a registered vehicle owes a yearly property tax, 'Impozit', on that vehicle that is mainly based on the engine's Cubic capacity for passenger cars and buses, and mass and number of Axles for Trucks and Semi-trailer trucks.
Although the template for the collection of vehicle property tax depending on the vehicle's type is drafted by the national government, the property tax is owed to the local government in which the vehicle is currently registered and the local council can vote to reduce or to increase the tax owed by a margin.
The framework for calculating the basic vehicle property tax is the following:
I. Vehicles Registered Nationally Amount owed in RON per each 200 cc
1.Motorcycles, three-wheeled vehicles, quadracycles, and regular vehicles with a cubic capacity < 1600 cc8
2.Motorcycles, three-wheeled vehicles, quadracycles with a cubic
capacity >= 1600 cc		9
3.Regular vehicles with a cubic capacity between 1601 cc and 2000 cc18
4.Regular vehicles with a cubic capacity between 2001 cc and 2600 cc72
5.Regular vehicles with a cubic capacity between 2601 cc and 3000 cc144
6.Regular vehicles with a cubic capacity >= 3001 cc290
7.Buses and minibuses24
8.Other mechanically powered vehicles having a Maximum Authorized Mass not exceeding 12 tons. 30
9.Tractors18
II. Vehicles Registered with the Local Commune Amount owed in RON per each 200 cc
1.Vehicles with a cubic capacity <= 4800 cc2 - 4
2.Vehicles with a cubic capacity >= 4801 cc4 - 6
3.Vehicles for which the cubic capacity is not known or specified50 - 150 RON/year

For example: The owner of a normal gasoline-powered vehicle with an engine of 2000 cc, registered in the mun. of Cluj-Napoca will have to pay an yearly vehicle property tax of 180 RON.. Meanwhile someone who lives in the Mun. of Timișoara and owns a vehicle that has the same capacity will pay 274 RON.
Another example of a vehicle with a cubic capacity of 3000, registered in Alba county, which has a 16.05% markup: Rate: 144 RON/200cc, 3000 / 200 = 15. Normal Tax owed: 15* 144 = 2160. Tax owed in Alba county : 2160 * 116.05/100 ~= 2507 RON.
This system of taxation results in incredibly high taxes for vehicles with engines bigger than 3000 cc, and low taxes for engines smaller than 2000 cc. As a result, many people have tried to dodge the system either by registering their vehicles in another EU country with smaller taxes, or by converting their vehicles to fit the legal definition of a Utility Vehicle, which is included in category 8 and have a rate of only 30 RON / 200cc in stead of 290 RON / 200cc. For example, the owner of a vehicle that has a cubic capacity of 4000 cc will have to pay 5800 RON per year, compared to 480 RON per year owed by someone who owns a pickup truck with the same cubic capacity of 4000. The main legal requirement for a vehicle to be considered a Utility Vehicle is that it must have a cargo area that is separated from the passengers and cannot be accessed from within the vehicle. Many passenger cars can easily be modified to fit this requirement by installing a barrier between the trunk area and the back seats.
Hybrid vehicles owners will pay a reduced tax. Electric vehicle and Classic car owners will pay no tax at all. All vehicle owners get a 10% reduction if they pay the tax before May 1. Handicaped people and war veterans do not owe any vehicle property tax no matter the vehicle type.

Rovinieta

On top of paying an annual Vehicle Property Tax, all vehicles that travel outside of city limits must pay the "Rovinieta", including internationally registered vehicles that travel temporarily on Romanian roads which ranges from 28 Euros a year for passenger cars to 1210 Euros for Trucks that have a Maximum Authorized Mass greater than 12 t and more than 4 axles. Classic cars are exempt from the Rovinieta.

Spain

In Spain two taxes apply to motor vehicles:
  1. The registration tax applies at purchase time to the purchase price. It is a national tax and the rate varies from 0% to 14.75% depending on CO2 emissions. In some cases regions may fix their own rates.
  2. The mechanical vehicle circulation tax is an annual tax. The tax is a municipal tax whose rate varies widely across the country. The tax is calculated according to the tax horsepower of the vehicle. In Madrid and Barcelona the rates for 2011 ranged from €22 for up to 8 HP to €224 for vehicles with over 20 HP.

    United Kingdom

In the United Kingdom it is a requirement to pay 'Vehicle Excise Duty', which is paid to the government for a vehicle licence. Previously, vehicle licences in the form of paper discs were required to be displayed on vehicles, and this licence would remain valid until its expiry date even if the vehicle is transferred to another keeper. The paper discs were abolished in October 2014, meaning that the licence is merely an entry in the centralized database; moreover, following this change the licence is cancelled if the vehicle is transferred. Vehicles that are not used or kept on public roads must be the subject of a Statutory Off-Road Notification if they are not licensed.
In 1937, the direct relationship that existed between the tax and government expenditure on public roads was cut, the proceeds being treated as general taxation.
In the 2015 budget, the government announced that the revenue would once again be used directly to maintain the roads, for the first time since 1937.
In the 2018 budget, the government announced a National Roads Fund which would ring-fence VED in England for the improvement of roads.

United States

Each state requires an annual registration fee which varies from state to state.
Additionally, in some states, counties and/or municipalities are allowed to also impose a vehicle tax. For example, in Illinois, Cook County taxes vehicles that are registered in unincorporated areas, and a number of municipalities have their own annual vehicle registration fee. In Massachusetts, the excise tax is billed separately from registration fees, by the town or city in which the vehicle is registered, and was set at a fixed rate of 2.5% statewide by a 1980 law called Proposition 2½. Within some states, the fees may vary from county to county, as some counties have surcharges per vehicle; an example of this is Virginia's personal property tax. New York State, on the other hand, charges a tax based on the vehicle's weight, rather than on its value, which is charged at the time of registration renewal.
In California and New Hampshire, the registration tax is calculated by the current value of the vehicle. As a result, older and more inexpensive vehicles will have a low registration fee, whereas newer and more expensive vehicles will have fees in the hundreds of dollars.
There is also a federal Heavy Vehicle Use Tax for vehicles with gross weights of 55,000 pounds or more, including trucks, truck tractors and buses. Generally, vans, pickup trucks, panel trucks and the like are not subject to this tax. The tax does not apply to vehicles that are used for 5,000 miles or less on public highways during a tax period.
Additionally, "New York State imposes a highway use tax on motor carriers operating certain motor vehicles on New York State public highways. The tax rate is based on the weight of the motor vehicle and the method that you choose to report the tax."