Vehicle tax in EU

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nimap
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Vehicle tax in EU

Post by nimap » Thu Nov 18, 2021 11:28 am

As EU zone is tax free for import/export why vehicle costs significantly higher in Finland compared to Germany? Germany could be car producers but shouldn't the price reflect similarities around EU market. For instance high end BMW costs around 10k more in Finland than compared to Germany, I do not think shipping the vehicle from Germany costs that much. Is there import tax also in other commodities from EU?



Vehicle tax in EU

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FinnGuyHelsinki
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Re: Vehicle tax in EU

Post by FinnGuyHelsinki » Thu Nov 18, 2021 12:13 pm

nimap wrote:
Thu Nov 18, 2021 11:28 am
As EU zone is tax free for import/export why vehicle costs significantly higher in Finland compared to Germany? Germany could be car producers but shouldn't the price reflect similarities around EU market. For instance high end BMW costs around 10k more in Finland than compared to Germany, I do not think shipping the vehicle from Germany costs that much. Is there import tax also in other commodities from EU?
EU is not tax free, the member states can set their own taxes on products, also VAT varies between the countries. In Finland there's an additional car tax, which applies also to cars imported from within the EU.

Upphew
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Re: Vehicle tax in EU

Post by Upphew » Thu Nov 18, 2021 2:01 pm

nimap wrote:
Thu Nov 18, 2021 11:28 am
As EU zone is tax free for import/export why vehicle costs significantly higher in Finland compared to Germany? Germany could be car producers but shouldn't the price reflect similarities around EU market. For instance high end BMW costs around 10k more in Finland than compared to Germany, I do not think shipping the vehicle from Germany costs that much. Is there import tax also in other commodities from EU?
https://www.acea.auto/fact/overview-co2 ... ean-union/
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riku2
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Re: Vehicle tax in EU

Post by riku2 » Fri Nov 19, 2021 6:22 pm

nimap wrote:
Thu Nov 18, 2021 11:28 am
I do not think shipping the vehicle from Germany costs that much. Is there import tax also in other commodities from EU?
Cars are a special exception because some governments want to limit private car ownership (eg Finland or Denmark which has even higher car taxes than Finland) and some have large numbers of voters working in car factories (Germany being a good example). This means a substantial difference in the taxation levied on private cars across the EU.
If you were allowed to go to any EU country and buy a car paying only the local tax rate and bring it back home that would circumvent the policies of the various member states.

So you can go to Germany and bring back a microwave oven or car boot full of groceries and bring it back to Finland tax free but buying a car will mean Finnish import tax.

The finnish car tax system is especially annoying when it comes to extras on the car because the tax rate is based on engine size and this tax rate applies to everything added at the factory (anything added by the dealer once the car arrives in Finland is a fixed tax rate, not emissions related).
Fancy headlights on a BMW 3 series will cost more for a 3 series with big engine than a 3 series with small engine (even though the headlights are identical between the models). For this reason cars driven around Finland have pitiful levels of equipment and cars driven around Germany are packed with all kinds of fancy extras.

FinnGuyHelsinki
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Re: Vehicle tax in EU

Post by FinnGuyHelsinki » Sat Nov 20, 2021 10:38 am

riku2 wrote:
Fri Nov 19, 2021 6:22 pm
nimap wrote:
Thu Nov 18, 2021 11:28 am
I do not think shipping the vehicle from Germany costs that much. Is there import tax also in other commodities from EU?
Cars are a special exception because some governments want to limit private car ownership (eg Finland or Denmark which has even higher car taxes than Finland) and some have large numbers of voters working in car factories (Germany being a good example). This means a substantial difference in the taxation levied on private cars across the EU.
If you were allowed to go to any EU country and buy a car paying only the local tax rate and bring it back home that would circumvent the policies of the various member states.

So you can go to Germany and bring back a microwave oven or car boot full of groceries and bring it back to Finland tax free but buying a car will mean Finnish import tax.

The finnish car tax system is especially annoying when it comes to extras on the car because the tax rate is based on engine size and this tax rate applies to everything added at the factory (anything added by the dealer once the car arrives in Finland is a fixed tax rate, not emissions related).
Fancy headlights on a BMW 3 series will cost more for a 3 series with big engine than a 3 series with small engine (even though the headlights are identical between the models). For this reason cars driven around Finland have pitiful levels of equipment and cars driven around Germany are packed with all kinds of fancy extras.
The car tax in Finland is for collecting money, not limiting car ownership. Also, the tax is not based on engine size but - along with a host of other factors - the standardized measurement of CO2 output, as reported by the car manufacturers. Therefore cars with hybrid powertrains usually have much less car tax compared to their non-hybrid counterparts. E.g. Porsche Panamera Turbo S (starting price ~337 000€) vs. Panamera Turbo S E-Hybrid (starting price ~209 000€), even though they both have the exact same petrol engine (E-Hybrid having an additional electric motor).

betelgeuse
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Re: Vehicle tax in EU

Post by betelgeuse » Sat Nov 20, 2021 2:52 pm

riku2 wrote:
Fri Nov 19, 2021 6:22 pm
So you can go to Germany and bring back a microwave oven or car boot full of groceries and bring it back to Finland tax free but buying a car will mean Finnish import tax.
While the practical effect is often the same, it’s not a tax on import but adding the vehicle to the registry.

nimap
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Re: Vehicle tax in EU

Post by nimap » Thu Nov 25, 2021 2:26 pm

FinnGuyHelsinki wrote:
Sat Nov 20, 2021 10:38 am
The car tax in Finland is for collecting money, not limiting car ownership. Also, the tax is not based on engine size but - along with a host of other factors - the standardized measurement of CO2 output, as reported by the car manufacturers. Therefore cars with hybrid powertrains usually have much less car tax compared to their non-hybrid counterparts. E.g. Porsche Panamera Turbo S (starting price ~337 000€) vs. Panamera Turbo S E-Hybrid (starting price ~209 000€), even though they both have the exact same petrol engine (E-Hybrid having an additional electric motor).
does that mean, when Tesla starts producing vehicle in Germany, I can go there and buy car there with deducted VAT and bring it to Finland and pay VAT and I am ready to roll without any additional charges? As the car doesn't have CO2 emission while operating.

betelgeuse
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Re: Vehicle tax in EU

Post by betelgeuse » Thu Nov 25, 2021 2:46 pm

nimap wrote:
Thu Nov 25, 2021 2:26 pm

does that mean, when Tesla starts producing vehicle in Germany, I can go there and buy car there with deducted VAT and bring it to Finland and pay VAT and I am ready to roll without any additional charges? As the car doesn't have CO2 emission while operating.
There are some admins fees to get Finnish plates. In practise you are likely to find out that this doesn’t really save money.

https://ec.europa.eu/taxation_customs/b ... ng-cars_en

FinnGuyHelsinki
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Re: Vehicle tax in EU

Post by FinnGuyHelsinki » Thu Nov 25, 2021 8:12 pm

nimap wrote:
Thu Nov 25, 2021 2:26 pm
FinnGuyHelsinki wrote:
Sat Nov 20, 2021 10:38 am
The car tax in Finland is for collecting money, not limiting car ownership. Also, the tax is not based on engine size but - along with a host of other factors - the standardized measurement of CO2 output, as reported by the car manufacturers. Therefore cars with hybrid powertrains usually have much less car tax compared to their non-hybrid counterparts. E.g. Porsche Panamera Turbo S (starting price ~337 000€) vs. Panamera Turbo S E-Hybrid (starting price ~209 000€), even though they both have the exact same petrol engine (E-Hybrid having an additional electric motor).
does that mean, when Tesla starts producing vehicle in Germany, I can go there and buy car there with deducted VAT and bring it to Finland and pay VAT and I am ready to roll without any additional charges? As the car doesn't have CO2 emission while operating.
Finnish VAT is due if the imported car was bought within 6 months of its first registration (or if unregistered, in which case an import permit is required), or was driven 6000km or less when purchased.

Upphew
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Re: Vehicle tax in EU

Post by Upphew » Fri Nov 26, 2021 7:28 pm

nimap wrote:
Thu Nov 25, 2021 2:26 pm
FinnGuyHelsinki wrote:
Sat Nov 20, 2021 10:38 am
The car tax in Finland is for collecting money, not limiting car ownership. Also, the tax is not based on engine size but - along with a host of other factors - the standardized measurement of CO2 output, as reported by the car manufacturers. Therefore cars with hybrid powertrains usually have much less car tax compared to their non-hybrid counterparts. E.g. Porsche Panamera Turbo S (starting price ~337 000€) vs. Panamera Turbo S E-Hybrid (starting price ~209 000€), even though they both have the exact same petrol engine (E-Hybrid having an additional electric motor).
does that mean, when Tesla starts producing vehicle in Germany, I can go there and buy car there with deducted VAT and bring it to Finland and pay VAT and I am ready to roll without any additional charges? As the car doesn't have CO2 emission while operating.
Why would you go to Germany to buy the car?!? Just go to their website and shop it from there. Of course you can go to Germany, deal with the hassle to buy the car tax free (can you drive it if you buy it untaxed? certainly you won't register it), then get the car to Finland and pay VAT and all the other taxes.
Right now there is proposal from the government that would drop the car tax to 0% for purely electric or hydrogen powered cars, so there would be only VAT to pay. You'll even get the 2,7% refunded if you buy it now and the proposal goes through and is in effect 1.1.2022 https://www.eduskunta.fi/FI/vaski/Halli ... +2021.aspx
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