For assessment of car tax, the vehicle has to be roadworthy

The Tax Administration evaluates how a motor vehicle’s individual characteristics will affect its taxable value. For this purpose, not only the Tax Administration but also the taxpayer declaring their vehicle for assessment of car tax can provide information on the individual automotive characteristics that may be important. This information may also include a statement that points out certain deficiencies in vehicle condition.

In general, when a vehicle is operable, it should not only have its standard equipment in place but also have all the components, equipment and parts required for the vehicle to be roadworthy. No lowering of the tax value is possible if some of the components, equipment and parts are missing or not working, because these are what the national car inspection requires all vehicles to have.

Taxpayer-submitted demands regarding car taxation, which are based on the vehicle’s individual characteristics

Taxpayers declaring their vehicle for assessment are entitled to demand that the ‘general retail value’ relevant to their vehicle should be lowered. This demand may be submitted by reference to individual characteristics of the vehicle to be assessed. If the taxpayer asks for a lowered value because of poor vehicle condition, the taxpayer will need to provide the Tax Administration with information to explain the reasons for this demand.

In addition, the Tax Administration may require that an automotive inspection be performed.

Based on the information received, and based on the results of an inspection, if any, it may be that the ‘general retail value’ of a similar vehicle in normal condition becomes lowered, because of the individual characteristics of the vehicle being assessed for car tax.

Evaluating vehicle condition

The basic assumption concerning vehicle condition is that cars are designed to sustain average-type use for a specific period of time if given regular maintenance in conformance with their maintenance plan. When vehicle use is heavier i.e. different from average, there will be more wear and tear. When performing evaluations for purposes of car taxation, the focus is on whether the vehicle’s actual wear and tear is different from the usual wear and tear caused by average use.

Evaluations take account of the entire perspective, covering all aspects indicative of vehicle condition. The condition of the vehicle being assessed for car tax is compared with the normal condition that a similar vehicle would be in, when it has reached the same years and mileage.

In the practice of car-tax assessment, the Tax Administration has performed the calculations using a discounted amount to represent the vehicle's asking price. This has been done because of the uncertainty factors present in our methodology and because of general variations in vehicle condition. The older the vehicle to be assessed, the higher the discount. The minimum discount is 3% and the maximum discount is 30%.

In order to submit the taxpayer’s demand by reference to the vehicle’s individual characteristics – in situations where these characteristics might have more importance than what is described above – the taxpayer is entitled to provide evidence of the actual technical condition of the vehicle to be assessed, including poor condition as appropriate.