Dutch Government introduces CO2-based car purchase tax
Wed 07 June 2006
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The Netherlands has introduced a car registration tax that is strongly differentiated according to a vehicle's environmental performance. The 'greenest' cars will enjoy a 6,000 Euro discount compared with the standard rate while those considered the least 'green' will pay over 500 Euro more. The Dutch move comes in spite of the fact that the European Commission has made clear its preference for environment-based circulation rather than registration taxes.
According to a report in ENDS, Cars in the Netherlands will be ranked according to seven different categories including: fuel consumption; CO2 emissions and an efficiency rating that assesses them relative to vehicles of the same class.
The EU are currently discussing draft legislation that will link car taxes more directly to environmental performance. However the European Commission has made clear its preference for taxes on purchase, at registration, to be replaced by circulation taxes (such as VED in the UK). Purchase taxes have been shown to cause competition issues in the intra-EU car market.
The Dutch Government has indicated it would eventually move to scrap registration taxes, in line with the EU's position.
Related Links
ENDS - Environment Daily news link
Defra report - 'Greening the Tax System in the Netherlands'
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