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EU Car Makers Fear Tax Hike For New Cars

by Ulrika Lomas, Tax-News.com, Brussels

02 August 2017


European car manufacturers have called on governments to ensure that a new test for measuring vehicle emissions does not create tax distortions for new cars entering the market.

The Worldwide Harmonized Light Vehicles Test Procedure (WLTP) will apply to all new car models introduced into the European market from September 1, 2017. It will be rolled out to all new cars sold across the EU from September 2018.

The test was developed by the EU, Japan, and India under the United Nations Economic Commission for Europe (UNEC) World Forum for Harmonization of Vehicle Regulations, and is intended to be a global harmonized standard for determining emissions, energy consumption, and electric range. It will replace the current New European Driving Cycle (NEDC) lab test.

However, Europe's car manufacturers have raised concerns that taxes may be higher for those purchasing new cars, which will have their emissions more accurately calculated than those that were tested under the existing standard.

The European Automobile Manufacturers Association said that if governments "simply apply the existing CO2-tax scheme to the new WLTP values, they will effectively put a new car type introduced to the market after September in a higher tax band than a similar car hitting the market just before that date."

"National governments need to act to ensure that CO2-based taxation will be fair, since WLTP will result in a higher CO2 value for the one and same vehicle compared to NEDC," said ACEA Secretary General, Erik Jonnaert. "If they fail to do so, the introduction of the new test procedure could increase the financial burden on consumers."

Currently 19 EU member states levy passenger car taxes based on CO2, including Austria, Belgium, Croatia, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Spain, Sweden, and the UK. In May 2017 the European Automobile Manufacturer's Association called for a more uniform application of these taxes, saying this should be exclusively based on CO2 emissions and should be technologically neutral, linear, and budget neutral.

TAGS: tax | Belgium | Denmark | India | Ireland | Malta | Netherlands | Portugal | Slovenia | mining | energy | vehicle tax | budget | Latvia | Luxembourg | United Kingdom | manufacturing | Austria | Cyprus | Finland | France | Germany | Greece | Spain | Sweden | Croatia | Japan | Europe | Regulations

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