The good tax guide

A total tax burden may be compared between nations by computing the various taxes that are assessed on the same automobile in each nation. There is a wide variation in the tax burden. Over 10 years of private ownership of a modest gasoline vehicle, the tax burden varies from €1,500 in Bulgaria to €17,000 in Denmark. The price range for a small petrol SUV is between 2,800 and 51,400 euros.

This analysis estimates the tax burden across vehicle categories (small cars and compact SUVs) and powertrains (petrol, plug-in hybrids, and battery electric vehicles – BEVs), as well as the tax disparity between them, which is crucial for the zero-emission transition.

The tax difference between a BEV and a gasoline-powered private automobile varies significantly among nations, according to this analysis. Malta, Denmark, and Norway have the greatest and Bulgaria, Cyprus, and Belgium have the lowest tax differentials. These conclusions are explained by the tax comparisons:

• Zero-emission purchase incentives are present in almost all countries with a high divergence (the biggest being in Malta and Romania), but not in nations with low differentials.
• Fuel taxes often make up the greatest portion of taxes owed after 10 years of ownership. Twenty nations reduced their gasoline excise taxes in 2022, which reduced the tax disparity.
• Some taxation methods don’t exist. Despite having an impact on new acquisitions, nine nations lack acquisition taxes, while four lack ownership taxes.
• Certain taxes are misdescribed. Ten nations, particularly those without recent tax revisions, lack an automobile tax (i.e., an ownership or purchase fee) based on CO2 emissions.