Amendment of Car Tax and Annual Vehicle Tax Regimes

Car taxation was reformed in Finland in 2007 and the reform entered into force in 2008. The tax on passenger vehicles was differentiated according to vehicle-specific emissions (CO2/g/km). The lowest tax rate (5%) applies to cars with zero carbon dioxide emissions while the highest tax rate (50%) applies to cars with carbon dioxide emissions exceeding 360 g/km. The Vehicle Tax Act was also reformed at the end of 2007. In this reform, the basic part of the tax was differentiated according to carbon dioxide emissions of each vehicle just like in the car taxation reform. The basic part of the emission-based vehicle tax is EUR 43-606 per year, depending on the car specific carbon dioxide emissions. This taxation model benefits, irrespective of the technology used, all low-emission cars.

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