New year brings changes to the road. Motor vehicle tax is cheaper for newer and environmentally friendly vehicles
Tax rates are uniform throughout the country, while they will reflect vehicle's age and its impact on the environment.
Bratislava – Have you acquired by at the end of year a new car, or do you have a low emission, electric or hydrogen car? You will pay less for motor vehicle tax this year. The reason is a new Act on Motor Vehicle Tax. “It introduces a variable annual tax rate according to vehicle age, with lower tax for newer cars. At the same time, a greater percentage reduction in the annual tax rate and thus greater savings on tax applies also to greener cars,” says Ladislava Pozdechová, head of the accounting department in Business Lease Slovakia.
The new Act on Motor Vehicle Tax, which has been separated from the Act on Taxes and Fees, primarily unifies tax rates for different types of vehicles throughout the territory of Slovakia, i.e. regardless of region. It is the intention of the Act to encourage the replacement of the vehicle fleet, therefore it introduces a variable tax rate according to age and environmental impact of the vehicle. In this regard, the method of acquiring the car does not matter. Taxation will thus positively reflect both on cars paid for in cash or acquired through finance or operating leases. The taxpayer in general remains a person who is registered as the holder of the vehicle in the document. “In case of financing of vehicles on operating leases, where cars are mostly replaced after four years, the lower tax rate will translate also into lower operating lease payments for natural or legal person,” adds Pozdechová.
During the first three years of registration of the vehicle, the new tax rate is reduced by 25%, in the fourth to the sixth years by 20%. In the case of hybrid vehicles and the gas and hydrogen vehicles, the rate will be further reduced by 50%,” explains Pozdechová. In the case of electric vehicles, the tax base will be engine power in kW. On the other hand, however, the rate will grow with the increasing age of the vehicle. Therefore, a caution is in place whether a vehicle is acquired on finance lease, loan or in cash. After the seventh year of the age of a car, the rate will be reduced only by 15% and in case of 10 to 13-year-old vehicles, the rate will be 100 percent and later it will even be increased.
Annual tax rate and the age of the vehicle (from its first registration) under the Act on the Taxation of Motor Vehicles
1- to 3-year-old vehicle (36 calendar months): rate reduced by 25%
4-to 6-year-old vehicle: rate reduced by 20 %
7-to 10-year-old vehicle: rate reduced by 15 %
11-to 13-year-old vehicle: 100 % rate with later increases
For hybrid vehicles the tax rate will further be reduced by 50 %
The tax liability shall arise to the taxpayer on the first day of the month in which the vehicle was used for business, and it shall expire on the last day of the month in which the change of the holder of the vehicle, vehicle disposal of records, termination of business or cessation of the taxpayer takes place.