Taxes and duties on motor vehicles and fuel

I. Excise duty and VAT:

Most motor vehicles are subject to an excise duty upon import. The excise duty is calculated on the basis of the customs value of an imported vehicle.

All motor vehicles are subject to a 24.5% value added tax. Upon importation, the VAT is calculated on the basis of the customs value plus the excise duty.

The excise duty on motor vehicles is as follows:

A. Private cars:

The excise duty levied on private cars is based on the engine capacity, measured in cubic centimetres, as follows:

Engine capacity (cm3)
Excise duty (%)
0-2000
30
> 2000
45

The excise duty can be waived or lowered in the following cases, sometimes under certain terms.

Reason for lowering/waiver Duty (%)
Taxis From 30% to 10% or from 45% to 13%
Rental cars From 30% to 10% or from 45% to 13%
Rally cars and other cars exclusively used for motor sport 0
Cars exclusively used for rescue operations 0
Cars exclusively fuelled with electricity or hydrogen 0
Cars which are partially fuelled with electricity or methane The duty is lowered by 240.000 krónur.

B. Motor vehicles other than private automobiles:

1. Exempt from excise duty:

a) Motor vehicles for the transport of eighteen or more persons, including the driver.
b) Dumpers designed for off-highway use, of a gross weight 4 tons or more.
c) Snow-ploughs.
d) Self-loading or self-unloading trailers and semi-trailers for agricultural purposes
e) Snow-mobiles, weighing 700 kg. or more.
f) Navigable vehicles on wheels designed to travel over both land and water.
g) The following motor vehicles, provided that they are of a gross weight exceeding 5 tonnes:
i) Tractors principally designed for semi-trailers or for hauling another vehicle.
ii) Motor vehicles for the transport of goods.
iii) Trailers and semi-trailers for the transport of goods.
iv) Motor vehicles for special purposes; breakdown lorries, crane lorries and more, not principally designed for the transport of persons or goods.

2. 10% excise duty:

Tractors.

3. 13% excise duty:

a) Chassis fitted with engines for motor vehicles.
b) Bodies for motor vehicles.
c) Trailers and semi-trailers, other than for transport of goods.
d) The following motor vehicles, provided that they are of a gross weight not exceeding 5 tons:
i) Crane lorries and mobile drilling derricks.
ii) Trailers and semi-trailers, for transport of goods.
iii) Tractors principally designed for semi-trailers or for hauling another vehicle.
iv) Motor vehicles for the transport of goods.
v) Motor vehicles for special purposes, breakdown lorries and more, not principally designed for the transport of persons or goods.

4. 30% excise duty:

a) Motor vehicles for the transport of 10-17 persons, including the driver.
b) Motorcycles.
c) Snowmobiles.

II. Weight tax and disposal charge on motor vehicles:

A weight tax is levied on all motor vehicles, regardless of fuel source. The tax for every taxation period (6 months) is calculated as follows: 6.83 krónur for each kg up to 1,000 kg, 9.21 krónur for each kg up to 3,000 kg, and 2,277 krónur for each begun tonne after that. However, the tax shall neither be less than 3,416 krónur nor more than 41,193 krónur for each taxation period.

A disposal charge of 350 krónur is levied on each vehicle for each six-month period. This charge is payable for fifteen years from the date of the first registration of the vehicle in this country, except when the vehicle is aldready 25 years old at the beginning of the payment year. The charge is an environmental tax that is intended to finance the disposal of the vehicle at the end of its useful life. Once the vehicle is delivered for scrap, a 15.000 krónur refund will be paid to the owner.

VAT is not added to the weight tax or the disposal charge.

III. Excise tax on petroleum and diesel fuel for motor vehicles:

An excise tax is levied on petroleum. The tax is calculated in two steps. The so-called general excise tax is 9.28 krónur pr. liter, and the so-called special excise tax is 32.95 krónur pr. liter (34.92 krónur if the petroleum contains lead). Therefore the overall excise tax on petroleum is 42.23 krónur (44.20). A tax of 45 krónur per liter is imposed on diesel fuel (this tax is temporarily reduced by 4 krónur per liter from July 1st 2005 until July 1st 2006) for motor vehicles. Diesel fuel for certain purposes (e.g. space heating) is exempt from this tax in which case a dye is added to the fuel to distinguish is from taxed fuel.

A 24,5% VAT is added on to the selling price after the inclusion of the excise tax.

IV. Weight distance tax:

Motor vehicles in excess of 10 tonnes are subject to a special weight distance tax, calculated on the basis of the weight of the vehicle and the number of kilometers driven, as follows (these rates apply as of July 1st 2005):

Weight in kg.
Tax per km.
Weight in kg.
Tax per km.
10,000–11,000
0.29
21,001-22,000
6.89
11,001-12,000
0.89
22,001-23,000
7.49
12,001-13,000
1.49
23,001-24,000
8.09
13,001-14,000
2.09
24,001-25,000
8.69
14,001-15,000
2.69
25,001-26,000
9.29
15,001-16,000
3.29
26,001-27,000
9.89
16,001-17,000
3.89
27,001-28,000
10.49
17,001-18,000
4.49
28,001-29,000
11.09
18,001-19,000
5.09
29,001-30,000
11.69
19,001-20,000
5.69
30,001-31,000
12.29
20,001-21,000
6.29
31,000 and over
12.89

Owners of vehicles that weigh less than 10 tonnes do not pay a weight-distance tax.