4. Taxing vehicles and their use
Taxes related to the purchase, ownership and usage of vehicles were introduced in most OECD countries in the first half of the 20th century and have become an important source of tax revenue for many governments. All member countries rely on a wide range of tax instruments to raise revenue from both private and commercial vehicle owners and road users. Vehicle and vehicle usage taxation in its widest definition represents a prime example of the use of the whole spectrum of consumption taxes for taxing vehicles and their use, including VAT as well as ad quantum or ad valorem taxes (see definitions in Chapter 3). Over time, many governments have integrated environmental and climate objectives to these instruments.
Taxes and charges on vehicles mainly include:
Taxes on the purchase (including VAT and retail sales taxes) and registration of motor vehicles (including fees and charges, which are considered as taxes for the purpose of this chapter), payable once at the time of acquisition and/or the first putting into service of a vehicle (see Annex Table 4.A.1 and Annex Table 4.A.3);
Periodic taxes payable in connection with the ownership or use of the vehicles (see Annex Table 4.A.3);
Taxes on road fuels (see Annex Table 4.A.4 and Annex Table 4.A.5); and
Taxes on aviation fuels (see Annex Table 4.A.6)
Taxes on vehicles result from a long evolution over time and reflect a variety of influences beyond the need to raise revenue. Geography, industrial, social, energy, transport, urban and environmental policy considerations have all had an influence on the level and structure of taxation. Also the distributional impact of taxes on vehicles has evolved. Many of these taxes were instituted in a time when cars were considered luxury items. Wider ownership of cars over time (many low-income households own at least one car today) has reduced the progressivity of taxes on vehicles.
In most countries total taxes on vehicles result from a combination of one-off (on purchase or import) and recurrent (on ownership or use) taxes as well as from a mix between ad valorem (on the price) and ad quantum taxes (taking into account polluting emissions, weight, engine power, number of axles, age, fuel efficiency, equipment, suspension, cylinder capacity, number of seats, type of fuel, electric propulsion and distance covered). In most OECD countries, vehicles used by public authorities (fire brigades, police, armed forces, local authorities, rescue services etc.), vehicles for people with disabilities and for diplomatic missions are exempt from taxes on the purchase, registration and/or use of motor vehicles.
Taxes on the purchase/registration and use of motor vehicles cannot be considered in isolation from other tax bases and rates. Among the other elements to be taken into account when considering the taxation of vehicles as a whole are insurance premium taxes, specific road tolls (bridge or motorway tolls, congestion charges, and distance charges), import duties, company car taxation, passenger transport taxes, etc. (Harding, 2014[1]), These are however not covered in this publication.
This chapter describes the taxes imposed on the purchase, registration and use of road vehicles in OECD countries, highlighting in particular those that include environmental criteria (Section 4.2). It also describes the level of taxes on road fuels (Section 4.3), including recent temporary reduction measures adopted by countries to counteract sharp price increases. It finally shows the level of consumption taxes on aviation fuels (Section 4.4), including the tax exemptions that often apply to these fuels.
There is growing awareness among countries that a transition to net zero greenhouse gas emissions by around the middle of the century is essential for containing the risks of dangerous climate change (OECD, 2021[2]). Reaching climate neutrality by mid-century, in line with the 2015 Paris Agreement’s goal, demands deep transformations (Filippo Maria D’Arcangelo Ilai Levin Alessia Pagani Mauro Pisu Åsa Johansson, 2022[3]). These transformations include the development of comprehensive policy mixes combining direct and indirect emission pricing, standards and regulations and complementary policies such as innovation support and offsetting adverse distributional effects.
Globally, transport was responsible for 25% of direct CO2 emissions from fuel combustion in 2018 (ITF, 2021[4]), mainly road transport. Well designed taxes can reduce pollution and greenhouse gas emissions very effectively. Governments increasingly use taxation to influence consumer behaviour with a view to reducing CO2 emissions from road transport. They notably adapt a number of tax instruments, including one-off taxes such as registration taxes, or recurrent taxes such as annual circulation taxes according to the CO2 or other polluting emissions. Also fuel excises, an implicit form of carbon pricing, play an important role in carbon pricing policies, as research shows that these taxes continue to dominate effective carbon rates in the OECD (OECD, 2021[2]). However, the effectiveness and efficiency of such tax policies depends largely on how they are designed and implemented as part of an overall policy framework that takes notably into account available alternatives, interactions with other policies, and public support (Teusch and van Dender, 2020[5]). To this regard, adequate compensation schemes are particularly important policy components to protect the most vulnerable households (Alonso and Kilpatrick, 2022[6]).
Against this backdrop, taxes on road vehicles have been progressively adapted to influence consumer behaviour and to curb transport externalities, in particular environmental and climate externalities. Energy and environmental considerations have led to a progressive adjustment of the taxes on the purchase and registration of road vehicles to take account, for example, of their fuel efficiency or CO2 and other polluting emissions. Taxes on road use have also been introduced, initially to fund and maintain infrastructure but progressively to also manage other externalities of road transport, including polluting emissions. Some of these taxes have a direct relationship with environmental objectives, for example where the tax differentiates on the basis of CO2 emissions of the vehicles, while others may only have an indirect connection such as taxes based on the weight or on the fuel efficiency of the vehicle.
4.2.1. Taxes on the purchase and registration of road vehicles are increasingly used to induce consumers to buy less polluting vehicles
All OECD countries levy national and sometimes subnational taxes on the purchase and registration of road vehicles. These taxes may include VAT, sales taxes, excise duties and other fees and charges associated with the registration of a vehicle. Their level and structure vary considerably among OECD countries (see Annex Table 4.A.1 and Annex Table 4.A.2). They are based on a large diversity of criteria or on a combination of these. The main criteria for assessing these taxes can include:
The direct environmental impact, i.e. CO2 emissions and other polluting emissions;
The characteristics of the vehicle such as the type of fuel used, the weight, the cylinder capacity and the engine power. These may be indirectly connected with polluting emissions but were generally not introduced for environmental purposes;
Social considerations incl. preferential treatment of emergency vehicles, ambulances, vehicles for people with disabilities, vehicles for public transport, etc.;
The specific features of vehicles for the transportation of goods such as the number of axles, cargo room, number of seats, etc.
A number of specific elements can further be taken into consideration for determining the tax burden, such as the presence of safety equipment, air conditioning, etc. A specific tax applies to tyres in the United States. Taxation may also depend on the age of the vehicle in several countries.
All OECD countries levy VAT on the sale of vehicles at the standard rate, except the United States that does not have a VAT and where retail sales taxes are imposed at subnational level. Unlike final consumers, businesses will most often have a right to an input tax credit for the VAT incurred on the purchase of vehicles (albeit often with limitations – see Chapter 2). In many countries, VAT is also levied on the sale of second-hand vehicles under a margin scheme whereby the tax base for VAT is determined on the basis of the margin of the professional reseller rather than on the full sale price of the vehicle.
Differentiating taxes on the purchase or registration of road vehicles to take account of their polluting emissions can give vehicle purchasers an immediate incentive to buy a vehicle that pollutes less. This is now done in 35 out of 38 OECD countries. As shown in Annex Table 4.A.1, in 2022 all OECD member countries except Colombia, Costa Rica and Estonia take environmental or fuel efficiency criteria into account when determining the level of taxation and/or providing bonuses for the purchase of vehicles at the national and/or subnational level. In 18 of these countries (Australia, Austria, Belgium, Czech Republic, Denmark, Finland, France, Greece, Iceland, Ireland, Italy, Lithuania, Netherlands, Norway, Portugal, Slovenia, Spain and Sweden), the CO2 emissions are directly taken into account to determine the level of taxation. Some countries apply “feebates” i.e. rebates or a fees, depending on whether the vehicle exceeds a certain emission threshold. Eight countries provide a “bonus” (i.e. a subsidy paid by the government or a local authority on the purchase of the vehicle) to the buyers of selected vehicles with low or no CO2 emissions (Canada, France, Germany, Italy, Korea, New Zealand and Sweden). In some countries a “malus” (i.e. an additional tax, charge or fee) is imposed on vehicles with high CO2 emissions (Belgium, Canada, France, Italy and Sweden). In many countries purchasers of hybrid or full-electric vehicles receive a direct reduction (sometimes up to 100%) of registration taxes, charges or fees (Austria, Belgium, Czech Republic, France, Greece, Hungary, Iceland, Israel, Italy, Korea, Luxembourg, Mexico, New Zealand, Poland, Portugal, Sweden and Türkiye). Chile, Ireland, Israel and Norway also adjust their registration taxes to the emission level of nitrogen oxide (NOX).
Annex Table 4.A.2 provides an illustration of the cumulative effect of VAT, (local) taxes on registration, fees and environmental taxes on the purchase and registration of some typical vehicles (with electric, hybrid and combustion engines). Since rates, charges and rebates may differ at sub-national level in some countries, the table shows the overall tax calculations for the purchase and registration of these vehicles in the capital of each country. For example, for the category of the most taxed vehicles (i.e. four wheel drive vehicle with combustion engine emitting more than 290gr CO2/km) the total tax burden ranges from about 12% of the ex-tax price of the vehicle in Bern, Switzerland and in Washington, United States (respectively with a VAT rate of 7.7% and a sales tax of 6%, relatively low registration taxes and no CO2 tax) up to more than 150% of the ex-tax price in The Hague, Netherlands (with a VAT rate of 21% and a relatively high registration tax fully based on CO2 emissions) and Copenhagen, Denmark (with a VAT rate of 25% and relatively high registration taxes based on value and CO2 emissions). In Ankara, Türkiye, the total purchase and registration taxes can amount to more than 200% of the ex-tax price due to a very high registration tax. Tax rebates and bonuses on (fully) electric vehicles, on the other hand, may reduce the amount of these taxes to about 0% of the ex-tax price (in Oslo, Norway and Reykjavik, Iceland), or even provide a net purchase aid (in Paris, France; Luxembourg; and Washington, United States). These figures illustrate the very large differences in taxation across OECD countries both in terms of the total amount of taxes and the structure of these taxes.
The international differences in taxation of the purchase and registration of motor vehicles do not give rise to considerable cross-border shopping as motor vehicles need to be registered with a unique identification number in the principal country of use. VAT levied on the importation of a vehicle (or on its "acquisition" for cross-border sales within the EU) will generally be due in the country of registration. Even in the integrated market of the EU, there has been no harmonisation or even approximation of taxes or tax rates on motor vehicles.
The number of countries offering tax incentives and/or bonuses for the purchase of electric vehicles by consumers increased considerably since 2010. These policies had a significant impact on consumer behaviour and on the offering of car makers, even if for the latter national technical standards may also play a decisive role. Fiscal incentives at the vehicle purchase, as well as complementary measures (e.g. road toll rebates and low-emission zones) have been found to be pivotal to attract consumers and businesses to choose the electric option (International Energy Agency, 2020[7]). Tax rates that reflect CO2 emissions, on the other hand, are likely to further stimulate increased electric vehicle uptake. A carbon price on vehicle sales is most effective when producers and consumers can see and respond to price signals and can easily shift to low-carbon alternatives (John Larsen, 2020[8]).
4.2.2. While recurrent taxes on ownership or use also vary widely across OECD countries, they are used increasingly to pursue environmental objectives
All OECD countries levy taxes on ownership or use of motor vehicles, or both (see Annex Table 4.A.3). These taxes include recurring charges and taxes (annual or semi-annual registration fees, motor vehicle taxes, road taxes, licencing fees, etc.) levied on the right to drive on public roads. As was the case for taxes on vehicle purchase and registration, also these recurrent taxes take many forms across OECD countries and their level varies widely. The main elements used to assess these taxes are very similar to those used for assessing taxes on the purchase and registration such as use (commercial or not), vehicle type, type of fuel, engine size, age, emissions of pollutants, and fuel efficiency. In about one third of OECD countries (13 out of 38 i.e. Australia, Belgium, Canada, Chile, Colombia, Japan, Mexico, Netherlands, Poland, Portugal, Spain, Switzerland and the United States) local taxes are levied on the ownership or use of motor vehicles.
Differentiating recurrent taxes on ownership or use on the basis of polluting emission has become widespread among OECD countries. About two thirds of these countries (22 out of 38) include CO2 emissions in the criteria for assessing these taxes and/or for applying the exemption for hybrid and electric vehicles (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Luxembourg, Netherlands, Norway, Portugal, Slovak Republic, Slovenia, Sweden, Switzerland and the United Kingdom). Fourteen of these countries (Austria, Belgium, Denmark, Finland, France, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Slovenia and Sweden) apply such differentiation for both purchase/registration and periodic taxes. Norway, repealed the exemption for Traffic Insurance Tax for electricity powered vehicles as of 1 March 2022.
All OECD countries except Canada, Colombia, Costa Rica, Germany, Mexico, New Zealand and Sweden, reported the application of specific tax rates and/or specific tax bases for commercial vehicles (lorries, trucks, heavy goods vehicles, buses, utility vehicles). Criteria for assessing these taxes include the weight, the loading capacity, the number of axles and the type of vehicle (e.g. semi-trailers).
4.3.1. The level of taxation of road fuels is generally high in OECD countries
Excises on transport fuels exist since the first half of the 20th century. Their introduction was originally motivated primarily if not exclusively by non-environmental objectives, such as general revenue generation or to finance infrastructure spending. However, over time, fuel taxes have gradually taken on an environmental dimension. Given their often high level, taxes on road fuels are bound to discourage the use of fossil fuels at some point, which has an indirect effect on CO2 emissions, even if their rates are not motivated by environmental considerations and hence the implied carbon pricing structure is not ideal. These taxes may offer an effective price-based instrument to pursue environmental objectives. For example, when the more environmentally-friendly unleaded gasoline appeared on the market, it was not commercially competitive with leaded gasoline as a retail product because it was more expensive to produce. Energy taxation was used to overcome this handicap by making unleaded gasoline cheaper at the pump. Today, leaded gasoline has disappeared and is even no longer allowed on the market. On the other hand, lower taxes on Liquefied Petroleum Gas (LPG) used as propellant had a much less significant effect on consumer behaviour. The characteristics of this fuel (not liquid at standard temperature and atmospheric pressure; more difficult to stock; need for specifically equipped stations) have hindered its development. The use of LPG is still globally very low compared to diesel and gasoline.
The revenues raised from these taxes are significant in OECD countries, as a result of the considerable level of consumption and high tax rates in many of these countries (OECD, 2017[9]). Although there are large differences between countries, the level of taxation for road fuel relative to the base is generally high. According to IEA figures (International Energy Agency, 2022[10]), for premium unleaded gasoline, for instance, the total tax burden (mainly excise plus VAT) exceeds 40% of the consumer price in all the OECD countries, except Australia, Canada, Chile, Costa Rica, New Zealand, Poland, Türkiye and the United States (see Annex Table 4.A.4). The lowest percentages of taxes as a share of the consumer price for unleaded gasoline are recorded in the United States (14.2%), Türkiye (20%) and Canada (29.1%). The highest rates are recorded in Ireland (62.3%), Israel (60.2%) and Finland (55.1%). Only one country, Colombia, does not apply the standard VAT rate to road fuels.
Excise levels1 for diesel fuel (Annex Table 4.A.5) are generally lower than those for gasoline in all OECD countries, except in Australia, Belgium, and the United Kingdom where the rates are the same, and in Switzerland where the excise duty for diesel is higher than for gasoline. From an environmental point of view, this is peculiar, as diesel consumption in vehicles has a much greater environmental impact than unleaded gasoline, largely due to the significant differences in nitrogen oxides (NOx) and particulate emissions. However, with more stringent motor vehicle regulations, the difference is becoming less pronounced for new vehicles, although there are concerns about differences between test cycle and on-road performance and the stock of vehicles is still includes older, more polluting diesel vehicles.
In a few countries, the determination of the excise amount explicitly includes a CO2 component for both unleaded gasoline and diesel fuel (Finland, Norway, Slovenia and Sweden).
In the European Union (EU), the Energy Taxation Directive (2003/96/EC) sets out common rules for the taxation of energy products in EU Member States. This Directive aims to reduce distortions of competition between mineral oils and other energy products, as well as tax competition between Member States through rate differentiation in energy taxation. It also aims to incentivise more efficient energy use. The Directive sets common taxation rules for a range of fuels, including many oil products, coal and natural gas, and for electricity consumption. For each, it sets a minimum level of tax expressed in terms of the volume, weight, or energy content of the fuel. For example, minimum rates on road fuels are as follows: EUR 0.359/l for unleaded gasoline; EUR 0.330/l for gas oil and EUR 0.125/kg for LPG. The Directive does not specify which taxes should be used to reach the minimum level of taxation. These may include a diversity of specific taxes such as excise, carbon tax, energy tax, etc. This Directive is currently being revised as part of the general review of climate-related legislation of the Green Deal. On 14 July 2021, the European Commission presented a proposal to update the Energy Taxation Directive, introducing a new structure of tax rates based on the energy content and environmental performance of fuels and electricity and broadening the tax base by including more products and removing some of the current exemptions and reductions.
Excise taxes on transport fuels tend to be considerably higher than on other mineral oils and, more generally, than on fossil fuels used for other purposes (OECD, 2022[11]). This can be for various reasons, including a lower elasticity of the tax base in transport; the use of excises to cover (more or less directly) external costs that are relevant only in the transportation context (most notably congestion); and equity concerns. Equity considerations have notably motivated the differences in taxation of diesel used for household heating compared to diesel used for transportation (Flues and Thomas, 2015[12]). All OECD countries, except the Netherlands, tax heating oil for households at a lower rate than diesel for transport use even though both products are more or less identical (see Annex Table 3.A.6). Israel applies the same excise rate to both products. Finally, the tax treatment of company car use is often more favourable, sometimes considerably so, than that of other car use (Harding, 2014[1]).
Excise rates on automotive fuels should not be considered in isolation when assessing the overall tax burden on road transport (van Dender, 2019[13]). Vehicles may also be subject to distance-based taxes, parking taxes, road tolls, registration taxes and recurrent circulation taxes - and many countries differentiate those taxes according to the type of fuel used or according to CO2 emissions per unit distance (see Section 4.2 above).
4.3.2. A number of OECD countries have temporarily reduced tax rates on road fuels to counter rising energy costs
During the year 2022, as part of the measures to counter rising energy costs, a number of OECD countries (Australia, Belgium, Canada, Hungary, Germany, Hungary, Korea, Netherlands, Poland, Slovenia, Spain and Sweden) reported a temporary reduction in the taxation of unleaded gasoline and automotive diesel (see country notes to Annex Table 4.A.4 and Annex Table 4.A.5). These take the form of reductions in the excise rates in all these countries. Poland has also reduced its VAT rate on some motor fuels from 23% to 8%. Korea reported a reduction in the taxes on unleaded gasoline only.
This section provides and overview of VAT and excise taxes applied to the two main categories of fuels destined to aircrafts, i.e. JET A-1 fuel used in turbine engines and AVGAS used in piston-engine aircrafts.
Annex Table 4.A.6 shows the excise and VAT rates applied to these types of fuels (hereafter “aviation fuels”) in OECD member countries and, where applicable, other specific taxes on the provision of those fuels to aircrafts (e.g. carbon tax).Other taxes applied to air transport (ticket taxes, airport taxes, etc.) are not covered in this publication.
The provision of aviation fuels to enterprises operating aircrafts for international commercial flights (i.e. passenger transport or cargo) is subject to a zero rate of VAT in all OECD countries that operate a VAT or subject to a full refund of input VAT (Chile) - except in Colombia, where it is subject to the reduced VAT rate of 5%. The provision of aviation fuels for domestic non-commercial or pleasure flights is taxed at the standard VAT rate in all OECD countries with a VAT, except in Colombia where it is subject to the reduced VAT rate of 5%. In the United States, it is taxed at the state level, with rates varying across them. In theory, the VAT zero-rating of aviation fuel for international flights reflects the objective of relieving exports from VAT in the jurisdiction of origin so as to avoid double taxation in the jurisdiction of destination, which normally has the right to levy VAT on internationally traded goods in accordance with the destination principle. However, unlike most exported items that are normally subject to VAT in the destination country, aviation fuel used in international flights will generally remain untaxed as most of it is consumed during the international flight and the remainder remains generally untaxed in accordance with the International Civil Aviation Organisation (ICAO) Convention (also known as the Chicago Convention; see below) requiring contracting states not to charge duty on aviation fuel already on board any aircraft arriving on their soil from another contracting state (all OECD countries are parties to the Convention). Since aviation fuel will typically be a business input of an enterprise large enough to be registered for VAT, this component of tax will generally be fully deductible and thus ultimately have no economic impact.
Annex Table 4.A.6 shows that all OECD countries also exempt aviation fuels from excise duties when used for commercial international flights, in contrast to fuels used on road and rail transport. They also all exempt aviation fuel for domestic commercial flights, except Australia, Canada, Costa Rica, Japan, Norway, Slovenia, Switzerland and the United States. The landscape is more diverse for aviation fuel used for non-commercial and pleasure flights, which is subject to excise duties in 20 OECD countries for international flights (Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Poland, Portugal, Slovenia, Spain and Sweden) and in all OECD countries (except Chile, Colombia, Iceland, Israel, Korea, Mexico, Norway and New Zealand) for domestic flights. The United States reported a tax reduction as part of measures in response the Covid-19 crisis: the federal fuel excise tax on jet fuel used in commercial aviation was suspended from 28 March to 31 December 2020.
Two OECD countries apply other (environmental) taxes to aviation fuels. Norway exempts aviation fuel from excise tax but submits it to a carbon tax and Slovenia applies a surcharge to all aviation fuels (including for international flights) in addition to excise duties (for non-commercial and pleasure flights).
As explained above, the exemption of aviation fuels for international flights in countries of arrival results from the Chicago Convention, which lays down the basic standards and principles governing international aviation. Article 24 of the Convention forbids the taxation of fuel on board aircrafts arriving in the territory of a contracting party. The Convention does however not forbid imposing any taxes on fuel supplied to an aircraft at the point of departure (Faber and O’Leary, 2018[14]) This tax exemption for fuels supplied to aircrafts rather result from the network of bilateral “Air Service Agreements” (ASAs) between individual countries, which generally provide for such an exemption on the basis of reciprocity (Teusch and Ribansky, 2021[15]). The Chicago Convention is not applicable to domestic air transport and therefore nothing prevents countries from taxing aviation fuels on domestic flights.
Reaching climate neutrality by mid-century requires that all sectors, including aviation, cut emissions strongly. Recent research suggests that, like for other transport fuels, carbon price signals in the form of kerosene taxes, may support an orderly transition in aviation. A gradually increasing tax on kerosene could strengthen the incentives for investment and innovation in clean aviation technologies and provide implementing countries with tax revenues that could be used to support clean investment and innovation, while addressing competitiveness and equity issues (Teusch and Ribansky, 2021[15]).
Canada. A battery electric vehicle as described in Category A would be under the Incentives for Zero - Emission Vehicles (iZEV) Program MSRP cap of CAD 60 000 for base models of SUVs, and it would be eligible for an incentive of CAD 5 000. A battery electric vehicle as described in Category B would be above the iZEV MSRP cap of CAD 55 000 for base models of cars (i.e. sedans) and would not be eligible for any incentives. Under the iZEV Program, conventional hybrid vehicles (i.e. no plug-in capabilities) as described in Category C are not eligible for incentives.
Chile. Excise tax amount not available. The tax base of the excise tax is calculated in accordance with the urban performance (km/lt), sale price and nitrogen oxide emissions (NOx; gr/km) of the respective vehicle.
Colombia. The Vehicle Registration Fee is subject to procedures that are carried out by the registration agencies and includes two charges: a charge set by the Ministry of Transportation and a charge whose amount is determined by municipal authorities. It is therefore not possible to determine an exact rate at the national level for the process of registering a vehicle. The rate shown in the table is the rate imposed in Bogotá D.C. Hybrid and electric cars are subject to lower rates of customs tax (5% and 0%, respectively).
France. Bonus. Ecological bonus makes it possible to receive, without any income condition, a help for the purchase or the rent of a new or second-hand electric or hydrogen vehicle or a new rechargeable hybrid vehicle. The amount is determined by a decree. 27% of the price up to EUR 6,000 / USD 6133.75 In addition, premium is granted for the purchase or leasing of a new car when its CO2 emissions are 127 g/km or less, in exchange for scrapping an old diesel or gasoline vehicle. The maximum premium is EUR 5000 (below 50 g/km): - EUR 5000 / USD 5111.46. Malus. Tax on carbon dioxide emissions (« CO2 malus »): EUR 40 000 / USD 40 655.16. Regional tax on motor vehicles: based on horsepower. Rates vary between EUR 33 and EUR 60 per horsepower according to the region.
Germany: The environmental bonus governed by public law depends on the vehicle type and the list price. Vehicles with electric engines: EUR 6 000 for vehicles with a maximum net list price of EUR 40 000 and EUR 5 000 for vehicles with a net list price between EUR 40 000 and EUR 65 000. Vehicles with plug-in hybrid electric/fuel engines: EUR 4 500 for vehicles with a maximum net list price of EUR 40 000 and EUR 3 750 for vehicles with a net list price between EUR 40 000 and EUR 65 000. This bonus does not reduce the taxable amount.
Greece. Bonus: Categories A and B: 20% for Price Before Tax (PBT) up 30 000 euros and 15% for PBT greater than 30.000. Max subsidy 6.000 euros. Individuals and companies; Category C: Not eligible to bonus. Bonus provided only for cars with CO2 emissions ≤ 50gr/km; Category D: no bonus provided to fuel cars. Bonus will increase up to EUR 8 000 (30% of the price before taxes) in the b’ cycle of “Go Electric” subsidy scheme which will start by end of July 2022.
Iceland. The VAT relief up to a maximum of ISK 480 000 (USD 3,780) on purchase of a new plug-in hybrid electric vehicle was subject to the limited number of 15 000 vehicles. This quota was reached in April 2022 and the relief measure was abolished on 6 May 2022.
Italy. Vehicles emitting less than 20 gCO2/km (typically BEVs) receive a EUR 4 000 subsidy and vehicles emitting between 20–60g CO2/km (typically PHEVs) receive a EUR 1 500 subsidy.
Korea. The amounts of the Individual Consumption Tax (ICT administered by the Ministry of Finance) include the reduction for eco-friendly vehicles (electric and hybrid). The Acquisition Tax (administered by the Ministry of Interior and Safety, which has not directly provided the tax amounts shown in this table) is also subject to a reduction for eco-friendly vehicles.
Lithuania. Bonus is available until 1 June 2022 (or until funds are available).
Luxembourg. If the vehicle is first put into circulation no later than 31 December 2022 inclusive and the date of conclusion of the contract of sale or, in the case of leasing, of the contract for the hire or leasing of the vehicle, is between 1 April 2021 and 31 March 2022 inclusive:
(1) For pure electric self-propelled vehicles (BEV) with an electric energy consumption of up to 18 KWh/100 km, the amount of the bonus is EUR 8 000 (but not more than 50% of the cost excluding VAT) for passenger cars;
(2) For pure electric self-propelled vehicles (BEV) with an electric energy consumption above 18 KWh/100 km the amount of the bonus is EUR 3 000 (but not more than 50% of the cost excluding VAT) for passenger cars.
The bonus is not available any more for plug-in hybrid vehicles from 1 January 2022.
Mexico. The tax on new vehicles is part of the VAT base. Vehicles Category D: Pick-up trucks are considered a cargo vehicle, regardless of its value and use. The new vehicles tax is calculated with a rate of 5%.
New Zealand. Situation as at 1 April 2022.
Poland. Category A and B: tax exempted if the vehicle complies with the conditions to apply the exemption for electric vehicles i.e. the vehicle utilises for propulsion only electricity accumulated by connection to an external power source. Category C: reduced excise tax rate of 1.55% of the tax base. Category D: taxed with excise tax rate of 18.6% of the tax base. Tax on civil law transactions: Contracts of sale are not subject to tax to the extent that they are subject to VAT or if at least one of the parties is exempt from VAT for this transaction. Tax rate is 2% of the market value. Under “My Electrician” program, individual purchasers of electric cars can apply for a PLN 18 750 subsidy for cars with value up to PLN 225 000. For holders of the Large Family Card, the subsidy is PLN 27 000 and there is no price limit.
United States: the excise tax in Washington DC is based on the fuel efficiency (in miles per gallon) and weight in Pounds (Lbs). Secretariat calculations based on Washington DC Regulations. Full electric and plug-in hybrid vehicles are eligible for an income tax credit (Electric Vehicles Credit) up to USD 7 500. However, a tax credit cap applies to vehicles from automakers having already sold 200 000 or more electric vehicles subject to the tax credit. In the circumstances, the vehicle given as an example in the description of Category B vehicles (Tesla Model 3) would not be eligible to the Electric Vehicle Credit. The other two vehicle categories (i.e. C and D) would not qualify for the Electric Vehicle Credits.
Australia. Excise rates are indexed in February and August each year. Temporary reduction: from 30 March 2022, the excise and excise equivalent customs duty (excise) rates for petrol, diesel and all other fuel and petroleum-based products, except aviation fuels, will be halved for 6 months.
Austria. The excise amount of EUR 0.482/l applies to unleaded gasoline with minimum 4.6% biofuel content and sulphur content ≤ 10mg/kg. Otherwise, the excise duty is EUR 0.515/l.
Belgium. Temporary reduction to counter rising energy costs the excise amount of EUR 0.600 per litre has been lowered to EUR 0.456 per litre (as from 19 March 2022).
Canada. The excise rate includes federal and provincial taxes (the federal excise rate is CAD 0.1 per litre). The federal GST rate is 5%. In this table, provincial taxes (incl. Sales taxes, HST and QST) are considered as part of excise taxes and are calculated by subtracting the federal GST amount, calculated using the applicable federal rate, from the total taxes reported in NRCan’s website (IEA Energy Prices Documentation 2022). Temporary reduction: certain provinces have implemented temporary relief measures related to the taxation of gasoline in 2022.
Chile. The Fuel Price Stabilisation Mechanism (Mecanismo de Estabililización de Precios de los Combustibles - MEPCO), introduced in 2014 by Law 20.765 has incorporated a variable component to the excise. In order to stabilise consumer price where there are international market price variations, this mechanism operates weekly either as a tax or as a tax credit. Unlike in other OECD countries, the VAT base is the ex-tax price only, instead of the sum of ex-tax price and excise tax.
Colombia. Excise rates vary according to biofuel content (bc) i.e. COP 549.90/gal with 2% bc; COP 538.68/gal with 4%:bc; COP 516.23/gal with 8% bc and COP: 505.01/gal with 10% bc. The VAT amount included in the consumer price results from a specific assessment of the tax bases, based on objective and subjective criteria as follows for fuels: the taxable base for VAT is (a) for the producer or importer: Income to the IP producer; (b) for the wholesale distributor and/or Industrial Marketer: Income to the producer or marketer of fuel and fuel alcohol and/or biofuel in the proportion authorised by the Ministry of Mines and Energy to convert it into oxygenated fuel, adding the wholesale margin. Transportation costs are not be part of the tax base. For fuels whose marketing margin and Income to the IP Producer is not regulated by the Ministry of Mines and Energy, the tax base will be the sale price without including transportation costs by pipeline. The VAT generated is subject to a right of deduction according to specific rules.
Costa Rica. There is no VAT associated on road fuels themselves but there is a VAT charge on the cost of land transportation of the product. The VAT rate is calculated from that base.
Denmark. The excise amount is for fuel with a minimum amount of 4.8% of biofuels. It includes the Excise Tax, the Environment Tax and the NOx Tax.
Finland. The excise amount for this average fuel mix includes taxes of energy and CO2 components and strategic stockpile fee.
France. Tax rate is reduced by EUR 0.01/l in Corsica. An additional tax of max. EUR 0.0073/l is applied by region councils (except in Corsica) to finance sustainable, railway or river navigation substructure. In addition, in the Ile-de-France region, tax rate is inflated up to EUR 0.0102/l.
Germany. The value in the table for excise amount includes excise tax (EUR 0.6545/l) and price on carbon emissions (EUR 0.05962/l). The excise amount is for unleaded gasoline with sulphur content ≤ 10mg/kg. Otherwise the component of excise is EUR 0.6698/l. Temporary reduction: to counter rising energy costs, the energy tax rates for fuels mainly used in road transport are reduced to the level of the minimum tax rates of the EU Energy Tax Directive from 1 June to 31 August 2022. For unleaded gasoline with sulphur content ≤ 10mg/kg, the energy tax rate then amounts to EUR 0.3590/l.
Hungary. Excise amount depends on the world market price of crude oil. If the world market price of crude oil is higher than 50 USD/barrel the excise amount is HUF 124.145/l (including the excise duty of HUF 120/l and the strategic stock fee of HUF 4.145/l). If the world market price of crude oil is 50 USD/barrel or less the excise amount is HUF 129.145/l (including the excise duty of HUF 125/l and the strategic stock fee of HUF 4.145/l). Temporary reduction: on 28 February 2022 the excise duty was reduced by 5 HUF/litre and the strategic stock fee had been suspended, then on 10 March the excise duty was reduced by further 20 HUF/litre. These measures are scheduled to remain in force until 1 July 2022.
Iceland. The excise rate of ISK 89.4/l includes the general excise on petrol (ISK 30.2/l), the special excise (ISK 48.7) and the carbon tax (ISK 10.5/l).
Ireland. The 'Excise' amount of EUR 0.66 per litre consists of Mineral Oil Tax (MOT) at a rate of EUR 0.63671 and a National Oil Reserves Agency (NORA) levy which is charged at a rate of EUR 0.02 per litre. From 13 October 2021 the MOT rate on unleaded gasoline increased to EUR 0.63671 per litre. From 10 March 2022 the MOT rate on unleaded gasoline decreased to EUR 0.47411 per litre. From 1 April 2022 the rate decreased further to EUR 0.46598 per litre.
Italy. The excise duty rate derives from the weighted average between the rate in force from January 1, 2022 to March 21, 2022 equal to 0.7284 euro per litre and the one in force from March 22, 2022 to March 31, 2022 equal to 0.4784 euro per litre.
Japan. Regular unleaded gasoline. This amount includes the Gasoline Tax (JPY 48.6/l), the Local Gasoline Tax (JPY 5.2/l) and the Petroleum and Coal Tax (JPY 2.8/l). The prices and taxes are given for the Tokyo prefecture.
Korea. Temporary reduction: from 12 November 2021 to 30 April 2022, fuel tax was cut by 20%; from 1 May 2022 to 30 June 2022 fuel tax is cut by 30%; from 1 July 2022, fuel tax will be reduced by 37% (the end date for this measure has not been decided at the time this publication is issued).
Latvia. Since 1 January 2020, the excise duty for unleaded gasoline is EUR 0.509/litre. Starting from 1 January 2022, strategic stockpile state fee for unleaded gasoline EUR 0.014/litre.
Mexico. Price data is not available in IEA statistics. There are no excise duties on volume. A tax (Impuesto Especial sobre Producción y Servicios) is charged as a percentage of the value of the product at wholesale level. It is included in the ex-tax price.
Netherlands. For gasoline a stockpiling tax of 0.008/l applies, this is not included in the mentioned excise rate. Temporary reduction: in order to counter rising energy costs, excise duty on unleaded gasoline has been lowered from EUR 823.71 / 1.000 L to EUR 650.71 / 1.000 L as of 1 April 2022. Currently this measure will be in place up to and including 31 December 2022.
New Zealand. The excise amount includes the National Land Transport Management Fund excise tax, the Accident Compensation Commission Levy, the Petroleum or Engine Fuels Monitoring Levy and the Local Authority Fuel Tax.
Norway. The excise amount includes the road usage tax and the CO2 tax.
Poland. The excise amount includes excise tax, fuel charge and emission charge. Temporary reduction to counter rising energy costs: from 1 February to 31 December 2022 the VAT rate for some motor fuels is reduced to 8% and excise rate is reduced to the EU minimum (i.e. 1 413 PLN/1000 litres).
Slovak Republic. The excise amount is EUR 0.514/l.
Slovenia. Situation as at 1 January 2022: the amount of EUR 445.49 per 1 000 litres includes: the excise duty of EUR 377.49; EUR 12.22 strategic stockpile, EUR 7.36 surcharge on energy end-use efficiency on petrol; EUR 9.11 surcharge for the promotion of electricity generation from renewable energy sources and high-efficiency cogeneration on petrol and EUR 39.79 CO2-tax. Temporary reduction: temporary measures to counter rising energy costs (situation as at 5 July 2022): amount of EUR 371.22 per 1000 litres includes: the excise duty of EUR 359; and EUR 12.22 strategic stockpile.
Spain. The excise amount of EUR 0.473/l includes the general tax rate (EUR 0.401/l) and the special tax rate (EUR 0.072/l). Temporary reduction: as part of the measures to counter rising energy costs, a temporary subsidy of EUR 0.20/litre applies.
Sweden. The excise tax amount includes the Energy Tax (SEK 4.180/l) and CO2 Tax (SEK 2.640/l). Temporary reduction: from 1 May 2022, the energy tax on gasoline was reduced with SEK 1.45/l (of which SEK 1.05/l is a temporary reduction from May to October 2022).
United States. Average federal and state taxes - there is no VAT. Sales taxes are however levied by states and some other local administrations. There is no federal sales tax. Computing an average sales tax as regards to individual commercial energy products would require disaggregated consumption data for each product, which are currently not available.
European Union. Directive 2003/96/EC sets minimal excise rates for energy products and electricity
Note: minor differences may occur between some of the amounts indicated in these country notes and those indicated in the table. These may be due to differences in calculation methods between the statistical institutes (who provided the data in the table) and the tax authorities (who provided the country notes).
Australia. Excise rates are indexed in February and August each year. Temporary reduction: from 30 March 2022, the excise and excise equivalent customs duty (excise) rates for petrol, diesel and all other fuel and petroleum-based products, except aviation fuels, will be halved for 6 months.
Austria. The excise amount of EUR 0.397/l applies to automotive diesel with minimum 6.6% of biofuel and sulphur content ≤ 10mg/kg. Otherwise, the excise amount is EUR 0.425/l.
Belgium. Temporary reduction; to counter rising energy costs the excise amount of EUR 0.600 per litre has been lowered to EUR 0.456 per litre (as from 19 March 2022).
Canada. The excise rate includes federal and provincial taxes (the federal rate is CAD 0.04 per litre). The federal GST rate is 5%. In this table, provincial taxes (incl. Sales taxes, HST and QST) are considered as part of excise taxes and are calculated by subtracting the federal GST amount, calculated using the applicable federal rate, from the total taxes reported in NRCan’s website (IEA Energy Prices Documentation 2022). Temporary reduction: certain provinces have implemented temporary relief measures related to the taxation of automotive diesel in 2022.
Chile. The Fuel Price Stabilisation Mechanism (Mecanismo de Estabililización de Precios de los Combustibles or MEPCO, introduced in 2014 by Law 20.765) has incorporated a variable component to the excise. In order to stabilise consumer price where there are international market price variations, this mechanism operates weekly either as a tax or as a tax credit. Unlike in other OECD countries, the VAT base is the ex-tax price only, instead of the sum of ex-tax price and excise tax.
Colombia. From 1 May 2019 onwards, the VAT rate of 5% applies instead of 19%. Additional, extra gasoline tax at a rate of COP 1 053.47 per gallon. Fuels used in fishing and/or cabotage activities on the Colombian coast and in maritime activities carried out by the National Navy, typical of the Coast Guard Corps, and marine and river diesel will be subject to the National Tax on gasoline at the rate of COP 677.11 per gallon. The VAT amount included in the consumer price results from a specific assessment of the tax bases, based on objective and subjective criteria as follows for fuels: the taxable base for VAT is (a) for the producer or importer: Income to the IP producer; (b) for the wholesale distributor and/or Industrial Marketer: Income to the producer or marketer of fuel and fuel alcohol and/or biofuel in the proportion authorised by the Ministry of Mines and Energy to convert it into oxygenated fuel, adding the wholesale margin. Transportation costs are not be part of the tax base. For fuels whose marketing margin and Income to the IP Producer is not regulated by the Ministry of Mines and Energy, the tax base will be the sale price without including transportation costs by pipeline. The VAT generated is subject to a right of deduction according to specific rules.
Costa Rica. There is no VAT associated with road fuels themselves but there is a VAT charge on the cost of land transportation of the product. The VAT rate is calculated from that base. No IEA data on prices is available for that product.
Finland. The excise for this average fuel mix includes energy content tax, CO2 tax and strategic stockpile fee.
France. An additional tax of max. EUR 0.0135/l is applied by region councils (except in Corsica) to finance sustainable, railway or river navigation substructure. In addition, in the Ile-de-France region, tax rate is inflated up to EUR 0.0189/l.
Germany. The value in the table for excise amount includes excise tax (EUR 0.4704/l) and price on carbon emissions (EUR 0.06691/l). The excise amount is for diesel with sulphur content ≤ 10mg/kg. Otherwise the component of excise is EUR 0.48517/l. Temporary reduction: to counter rising energy costs, the energy tax rates for fuels mainly used in road transport are reduced to the level of the minimum tax rates of the EU Energy Tax Directive from 1 June to 31 August 2022. For diesel with sulphur content ≤ 10mg/kg, the energy tax rate then amounts to EUR 0.33/l.
Greece. An additional “green fee” of EUR 0.03/l is applied for environmental purposes.
Hungary. Excise amount depends on the world market price of crude oil. If the world market price of crude oil is higher than 50 USD/barrel the excise amount is HUF 114.233/l (including the excise duty of HUF 110.35/l and the strategic stock fee of HUF 3.883/l). If the world market price of crude oil is 50 USD/barrel or less the excise amount is HUF 124.233/l (including the excise duty of HUF 120.35/l and the strategic stock fee of HUF 3.883/l). Temporary reduction: on 28 February 2022 the excise duty was reduced by 5 HUF/litre and the strategic stock fee had been suspended, then on 10 March the excise duty was reduced by further 20 HUF/litre. These measures are scheduled to remain in force by 1 July.
Iceland. The excise rate of ISK 79.7/l includes the excise on diesel (ISK 67.65/l) and the carbon tax (ISK 12.05/l).
Ireland. The 'Excise' amount of EUR 0.560 per litre consists of Mineral Oil Tax (MOT) at a rate of EUR 0.53546 and a National Oil Reserves Agency (NORA) levy which is charged at a rate of EUR 0.02 per litre. From 13 October 2021 the MOT rate for automotive diesel increased to EUR 0.53546 per litre. From 10 March 2022 the MOT rate for automotive diesel decreased to EUR 0.41351 per litre. From 1 April 2022 the rate decreased further to EUR 0.40538 per litre.
Italy. The excise duty rate derives from the weighted average between the rate in force from January 1, 2022 to March 21, 2022 equal to 0.6174 euro per litre and the one in force from March 22, 2022 to March 31, 2022 equal to 0.3674 euro per litre.
Japan. The excise includes the Petroleum Tax (YEN 2.800) and the Gasoline Tax (Yen 32.100). The VAT base does not include the Petroleum Tax.
Latvia. Since 1 January 2020, the excise duty for automotive diesel is EUR 0.414/litre. Starting from 1 January 2022, strategic stockpile state fee for automotive diesel EUR 0.016/litre.
Lithuania. As of 1st January 2020 there was an increase in excise rate: rate for automotive diesel used for agriculture was set at EUR 0.06/l, normal rate for automotive diesel was set at EUR 0.372/l.
Mexico. Excise taxes on gasoline and diesel in 2015 had three components: (1) the excise-carbon tax, set proportionally to the carbon content of the fuel and implemented through a fixed amount per litre, whose main purpose is to send a carbon price signal to contribute to Climate Change commitments; (2) the excise tax specifically earmarked as transfers to the State’s governments, proportional to their consumption, also implemented as a fixed amount per litre; and (3) the main excise tax, which, changed each month in value according to a set of criteria which essentially subtracted from the fuel’s controlled price the cost of importing or producing fuel, plus the costs of distribution, logistics, related items, and the retail profit for gas station owners. This general excise tax could even become a negative tax (a subsidy) if domestic prices for fuel were low and international reference prices were high, and this was the case for the first 3 years of the decade. The 2016 excise tax reforms changed completely this latter component. Now, the general excise tax on gasoline and diesel is also a fixed quota tax per litre. During the transition period before full price liberalisation of fuels in 2018, the fixed quota of the excise tax will have a complementary quota component (positive or negative) to ensure that the final fuel prices do not vary outside a price band of +/- 3% of the price they had in 2015. This complementary quota can never become equal in size to the excise tax, so general fossil fuel subsidies would be precluded from happening again.
Netherlands. For diesel a stockpiling tax of 0.008/l applies, this is not included in the mentioned excise rate. Temporary reduction: in order to counter rising energy costs, excise duty on automotive diesel has been lowered from EUR 528.46 / 1.000 L to EUR 417.46 / 1.000 L as of 1 April 2022. Currently this measure will be in place up to and including 31 December 2022.
New Zealand. The excise tax on diesel is a local authorities’ fuel tax and diesel vehicle owners are also required to pay road user charges.
Norway. The excise amount includes the road usage tax and the CO2 tax.
Poland. The excise amount includes excise tax, fuel charge and emission charge. Temporary reduction: as part of the measures undertaken to counter rising energy costs, from 1 February to 31 December 2022 the VAT rate for some motor fuels is reduced to 8% and excise rate is reduced to the EU minimum (i.e. 1 104 PLN/1000 litres).
Portugal. Automotive diesel used for agriculture is taxed at a lower VAT rate of 13%.
Slovak Republic. The excise amount is EUR 0.393/l for diesel.
Slovenia. Situation as at 1 January 2022: the amount of EUR 463.94 per 1 000 litres includes the excise duty of EUR 387.67, the strategic stockpile on gasoil used as propellant of EUR 11.66, EUR 8.00 surcharge on energy end-use efficiency on gasoil used as propellant, EUR 9.90 surcharge for the promotion of electricity generation from renewable energy sources and high-efficiency cogeneration on gasoil used as propellant, EUR 46.71 CO2 tax. Temporary reduction: temporary measures to counter rising energy costs (situation as at 5 July 2022) the amount of EUR 341.66 per 1000 litres includes: the excise duty of EUR 330; and EUR 11.66 strategic stockpile.
Spain. The excise amount of EUR 0.379/l includes the general Excise tax (EUR 0.307/l) and the special tax rate (EUR 0.037/l). Temporary reduction: as part of the measures to counter rising energy costs, a temporary subsidy of EUR 0.20/litre applies.
Sweden. The excise tax amount includes the Energy Tax (SEK 2.511/l) and CO2 Tax (SEK 2.292/l). The tax amount of SEK 4.803/l relates to Class 1 automotive diesel (aromatic content < 5%vol.; max sulphur content of 10 wppm. Higher taxes apply to Class 2 (SEK 5.126/l) and Class 3 (SEK 5.293/l) diesel. Temporary reduction: from 1 May 2022, the energy tax on diesel was reduced with SEK 1.45/l (of which SEK 1.05/l is a temporary reduction from May to October 2022).
United States. Average federal and state taxes - there is no VAT. Sales taxes are however levied by states and some other local administrations. There is no federal sales tax. Computing an average sales tax as regards to individual commercial energy products would require disaggregated consumption data for each product, which are currently not available.
European Union. Directive 2003/96/EC sets minimal excise rates for energy products and electricity.
Note: minor differences may occur between some of the amounts indicated in these country notes and those indicated in the table. These may be due to differences in calculation methods between the statistical institutes (who provided the data in the table) and the tax authorities (who provided the country notes).
Canada. The federal Goods and Services Tax is levied at a rate of 5% on aviation fuel and gasoline used in domestic flights. The federal excise rate, when applicable, is CAD 0.04 per litre of aviation fuel and CAD 0.10 per litre of aviation gasoline. Provinces and territories may also impose additional sales taxes and excise rates over and above the applicable federal rate.
Chile. Commercial services provided by aviation companies (notably, international cargo and/or passenger flights) and services provided to non-residents are considered exports. The aviation companies are therefore entitled to claim the refund of the input VAT, including on the fuel. In those cases, the practical effect can be similar to the application of a zero-rate (for ease of reading of the table, the VAT rate indicated in the table is 0 although in practice it is taxed and refunded to the aviation companies and to non-residents).
Colombia. Jet A1 aviation fuel and/or domestic 100/130 aviation fuel subject to 5% of VAT. Aviation fuel supplied for the national passenger air transportation service to and from some departments are not subject to VAT. The VAT amount included in the consumer price results from a specific assessment of the tax bases, based on objective and subjective criteria as follows for 100/130 octane aviation gasoline: (a) for the producer: the official list price at the refinery; (b) for the wholesale distributor: the official list price at the refinery, adding the marketing margin.
Estonia. Aviation gasoline used for private pleasure flights is taxed at an excise rate of EUR 563/1000 l.
Finland. The excise amount includes energy content tax, CO2 tax and strategic stockpile fee.
Germany. Fuels used for private pleasure flights are taxed at an excise rate of EUR 654,50 /1000 l (JET A-1) and 721 /1000l (AVGAS).
Greece. The VAT rate for aviation fuel is 24%. However, in each case the Directive 2006/112/ΕC is applied and a conditional exemption is provided, which is reflected as 0%. For Private/pleasure flights Excise Duties rates for AVGAS (CN code 27101231, 27101270) is EUR 697/1000 litres and for JET A - 1 (CN codes 2710 1921, 2710 1925) is EUR 410/1000 litres.
Hungary. Excise amount depends on the world market price of crude oil. If the world market price of crude oil is higher than 50 USD/barrel the excise amount is HUF 126.432/l (including the excise duty of HUF 124.2/l and the strategic stock fee of HUF 2.232/l). If the world market price of crude oil is 50 USD/barrel or less the excise amount is HUF 131.432 (including the excise duty of HUF 129.2/l and the strategic stock fee of HUF 2.232/l).
Ireland. AVGAS used for commercial aviation is partially relieved from excise. The rate of relief is EUR 0.2323 per litre giving an effective ‘Excise’ rate of EUR 0.4044 per litre.
Italy. This value derives from the weighted average between the excise duty rate in force from 1 January 2022 to 21 March 2022 (included) amounting to 0.7284 euro/litre and that in force from 22 March 2022 to 31 March 2022 amounting to 0.4784 euro/litre.
Netherlands. A zero VAT rate applies to fuels for aircrafts that are used by airlines that are mainly occupied by international transport of persons or goods against remuneration.
Poland. Both fuel charge and excise tax are imposed on aviation fuels. The rate shown in the table includes the excise duty of PLN 1.446/l (JETA-1) and PLN 1.822 (AVGAS) and the fuel charge of PLN 0,18632per kg). As the national excise rates are expressed in PLN per litre whereas fuel charge rate is expressed per kg, the rate for the fuel charge has been converted into a rate per litre by applying the appropriate density of the fuel.
Portugal. Aviation fuels used for commercial flights (i.e. flights for the transport of goods or passengers for consideration, whatever the type of plane) are exempt from excise duties. Fuels used for pleasure private flights are taxed at an excise rate of EUR 560.98 per 1000 litres for aviation gasoline (AVGAS) and EUR 392.35 per 1 000 litres for jet fuel (JET A-1).
Slovenia. Aviation fuels used for private/pleasure flights are taxed at an excise rate of EUR 330.00 per 1000 litres JET A-1 and EUR 421.61 per 1000 litres AVGAS and CO2 tax EUR 39.79 per 1000 litres JET A-1 and EUR 43.25 per 1000 litres AVGAS. Aviation fuels are also subject to surcharge for the promotion of electricity generation from renewable energy sources and high-efficiency cogeneration in amount EUR 9.11 per 1000 litres JET A-1 and 9.13 per 1000 litres AVGAS.
United States. For commercial aviation, the federal tax rate in the US is USD 0.044 per gallon (EUR 0.010 per litre). For non-commercial aviation, kerosene is generally taxed at USD 0.219 per gallon. Aviation gasoline is taxed at USD 0.194 per gallon. In addition, states or local authorities can levy additional taxes on aviation fuel varying from USD 0 and USD 0.235 per gallon for jet fuel (District of Columbia) and USD 0 to USD 0.3048 per gallon (Vermont) for Aviation Gasoline. There is no federal sales tax; States and local sales rates vary from 0% (Delaware, Montana, New Hampshire and Oregon) to more than 9.5% (Tennessee and Louisiana); however, sales tax does not apply to aviation fuel in every state. Temporary reduction: as part of measures to combat the Covid-19 crisis, the federal fuel excise tax on jet fuel used in commercial aviation was suspended from 28 March to 31 December 2020.
References
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[14] Faber, J. and A. O’Leary (2018), Taxing aviation fuels in the EU, CE Delft, Delft.
[3] Filippo Maria D’Arcangelo Ilai Levin Alessia Pagani Mauro Pisu Åsa Johansson (2022), “A framework to decarbonise the economy”, Economic Policy Paper, No. No. 31, OECD, Paris.
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[2] OECD (2021), Carbon prices in times of Covid-19: What has changed in G20 Economies?, OECD, Paris, https://www.oecd.org/tax/tax-policy/carbon-pricing-in-times-of-covid-19-what-has-changed-in-g20-economies.htm.
[9] OECD (2017), Policy Instruments for the Environment (PINE), OECD, https://www.oecd.org/environment/indicators-modelling-outlooks/PINE_database_brochure.pdf.
[15] Teusch, J. and S. Ribansky (2021), “Greening international aviation post COVID-19: What role for kerosene taxes?”, OECD Taxation Working Papers, No. 55, OECD Publishing, Paris, https://doi.org/10.1787/d0e62c41-en.
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Note
← 1. According to International Energy Agency calculations, the « excise » amount includes all taxes, fees and charges, excluding VAT.