17 Oct 18
News

Finland’s WLTP-based car tax not entirely neutral - yet

Finland is introducing a vehicle tax system that is based on the new WLTP test yet does not penalise vehicle buyers. 

Germany is the only other country so far to base taxes on new cars on WLTP emissions figures. But while additional tax liability in Germany is limited, the new calculation could theoretically have a major impact on Finnish car buyers.

CO2 emissions are used to determine the percentage of the list price that is payable as the registration tax. Simply switching from NEDC to WLTP figures would have added thousands of euros to the price of some cars. 

By reducing the average tax level by 22%, the new Finnish tax table, valid for WLTP-approved new vehicles sold from 1 September, aims to be fiscally neutral – a proposition put to the test by Autovista Group.  

  • Autovista reports that the new tax table works well for vehicles under 120g/km in the old (NEDC) test. 
  • Between 130-230 g/km (NEDC), the average tax increases noticeably, resulting in an average list price increase of about 1.5%.
  • From about 230 g/km, the WLTP-based tax level is again similar to that based on NEDC. Some powerful cars will in effect even be taxed lower than they have been until now. 

At year’s end, the Finnish government will assess actual tax levels and intervene if they’re not tax-neutral. Other CO2-based tax systems (e.g. France, Spain, the UK) will be closely monitoring the transition in Finland.

Authored by: Frank Jacobs