Chapter 3. The Slovenian road transport tax system today
This chapter gives a brief overview of the Slovenian tax system for road transport. It describes the different taxes that are levied on the three relevant tax bases (energy use, vehicle stock and road use), their rates and scope in 2017 as well as the associated revenues that were collected throughout 2017.
The Slovenian tax system for road transport covers the three tax bases, energy use, vehicle stock and road use, to a varying extent. This chapter gives a brief overview on the different taxes, their rates and the bases to which they apply in 2017 as well as the associated revenues that were collected throughout 2017.
Fuel purchased in Slovenia is subject to a fuel specific excise duty, a carbon tax and additional taxes. In addition, a 22% VAT rate applies. Slovenia levies energy taxes within the framework of the EU Energy Tax Directive (2003/96/EC), which sets minimum rates for the taxation of energy products in member states of the EU.
For gasoline, Slovenia applies an excise duty of EUR 0.5078 per litre1 and a carbon tax of EUR 0.0398 per litre. Additional taxes amount to EUR 0.1222 per litre supporting the strategic stockpile, to EUR 0.00736 per litre for promoting energy end-use efficiency, and to EUR 0.00911 per litre for promoting electricity generation from renewable energy sources and high-efficiency cogeneration (European Commission, 2018[1]).
For diesel, the excise duty amounts to EUR 0.4261 per litre2 and the carbon tax to EUR 0.0467 per litre. The higher carbon tax on diesel compared to gasoline reflects the different carbon content of the two fuels. The additional taxes amount to EUR 0.01166 per litre (strategic stockpile), EUR 0.008 per litre (promotion of energy end-use efficiency) and EUR 0.0099 per litre (promotion of electricity generation from renewable energy sources and high-efficiency cogeneration). Refunds can be claimed for diesel that is used for commercial purposes in trucks above 7.5 tonnes, to the extent that the excise duty rate is reduced to EUR 0.330 per litre (European Commission, 2018[1]).
Electricity use is subject to an excise duty of EUR 0.00305 per kWh and an additional tax of EUR 0.0008 per kWh used to promote energy end-use efficiency (European Commission, 2018[1]). Fuel inputs to the production of electricity are also subject to fuel excise duties, a carbon tax, and the relevant additional taxes. These input taxes are not part of the present analysis, although they form part of government revenue. In addition, electricity production in Europe is covered by the European Emissions Trading System, which adds an additional price on the kWh used in Slovenia. Revenues from the auction of tradable permits are not taken into account in the present analysis.
Two types of vehicle taxes exist in Slovenia.3 Passenger cars are subject to a one-time motor vehicle tax when they are registered or put into circulation in Slovenia for the first time. The registration tax applies ad valorem, as a percentage of the vehicle’s sales price (excluding VAT) and is restricted to passenger cars only. Tax rates depend on the type of fuel used and the CO2 emission profile of the vehicle. The registration tax rate is adjusted, for example, according to the vehicle’s environmental criteria based on the European emission standards (EURO), i.e., vehicles associated to a class below EURO 5 are subject to a higher tax. Battery electric vehicles (BEV) pay the lowest rate (0.5%). Exemptions from the registration tax apply to vehicles for large families, disabled people, ambulances, as well as for historic, sport and diplomatic vehicles (Ministry of Finance of Slovenia, 2018[2]).
When registering a vehicle in Slovenia (for personal and commercial use) the vehicle user is also subject to an annual motor vehicle tax. The tax is based on the vehicle category (passenger car, different truck types, buses, motorbikes) and adjusted according to the vehicle’s capacity or weight. For example, passenger cars pay a fixed rate according to their engine capacity (ranging from EUR 62 for engines below 1 350 cm3 to EUR 565 for engines above 4 000 cm3). Trucks without trailers are taxed based on the maximum allowed weight (ranging from a fixed rate of EUR 101.94 for trucks below 4 tonnes and a varying rate of EUR 22.86 per tonne for trucks that weigh more than 4 tonnes). The tax increases by class when the vehicle has a rating below EURO 5 and decreases when the vehicle’s class is above EURO 4. Several exemptions from the annual motor vehicle tax apply, in particular, vehicles that exclusively run on electricity (BEVs) are exempt from the tax, while hybrids and plug-in hybrids are not exempt (Ministry of Finance of Slovenia, 2018[2]). As opposed to an ownership tax levied independently of registration, the Slovenian annual vehicle tax only applies to users of registered vehicles.
Road use in Slovenia, more precisely motorway use, is subject to either an obligation to carry a vignette or a kilometre-based toll depending on the specific vehicle category. Vehicles that weigh more than 3.5 tonnes pay a kilometre price when driving on motorways, collected through a modern microwave technology system that communicates with installed gantries. The toll rate depends on the number of axles as well as the EURO class of the vehicle and ranges from EUR 0.1464 per km (for EURO 6 vehicles with two to three axles) to EUR 0.5074 per km (for vehicles with more than three axles and an emission class below EURO 3). Vehicles below 3.5 tonnes, on the other hand, are required to have a valid vignette when circulating on Slovenian motorways. The price of vignettes depends on the vehicle category (motorcycles, two-track motor vehicles and caravans), its height and the length of the validity of the vignette. In particular, vignettes are available with a yearly, monthly or weekly validity period.
In 2017, an amount of EUR 7 892 million was collected in total taxes at the central government level in Slovenia (OECD, 2018[3]).4 Revenues from excise duties and carbon taxes levied on fuels in road transport amount to EUR 1 152 million, representing 14.6% of total tax revenue at the central level. Revenues from vehicle taxes amount to EUR 187.5 million, or 2.3% of total revenues (Ministry of Finance of Slovenia, 2018[4]). Revenues from tolls and vignettes amounted to EUR 431 million in 2017. These funds are collected by the Slovenian motorway company and are not part of the government budget. They represent 5.5% when compared to total tax revenue collected at the central government level.
Although other tax provisions may affect revenues and tax bases beyond those discussed above, they are not included in the present analysis; for example, the tax treatment of commuting expenses and company cars used for private purposes (Harding, 2014[5]). OECD (2018[6]) finds that “the reimbursement of expenses incurred in relation to work-related travel, including transportation costs to and from work, is not taxed under the [personal income tax]” in Slovenia. Generous tax treatment of transport to work allowances reduces tax revenues, although the policy rationale for such benefits (i.e., limited transport infrastructure at the time of introduction) may be less relevant today. Likewise, the analysis does not look at the revenue effects from tax incentives for zero- and low-emission vehicles (such as purchase subsidies for BEVs and PHEVs) or for public transport (German et al., 2018[7]).
References
[1] European Commission (2018), Excise Duty Tables Part II Energy products and Electricity, https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/excise_duties/energy_products/rates/excise_duties-part_ii_energy_products_en.pdf.
[7] German, R. et al. (2018), Vehicle Emissions and Impacts of Taxes and Incentives in the Evolution of Past Emissions. Report to EEA, European Topic Centre on Air Pollution and Climate Change Mitigation, https://acm.eionet.europa.eu/reports/EIONET_Rep_ETCACM_2018_1_vehicle_taxes.
[5] Harding, M. (2014), “Personal Tax Treatment of Company Cars and Commuting Expenses: Estimating the Fiscal and Environmental Costs”, OECD Taxation Working Papers, No. 20, OECD Publishing, Paris, https://dx.doi.org/10.1787/5jz14cg1s7vl-en.
[4] Ministry of Finance of Slovenia (2018), Correspondance with Ministry of Finance of Slovenia, 5 October 2018.
[2] Ministry of Finance of Slovenia (2018), Taxation in Slovenia 2018, Republic of Slovenia, http://www.mf.gov.si/fileadmin/mf.gov.si/pageuploads/Davki_in_carine/Angle%C5%A1ki/Taxation_in_Slovenia_2018.pdf.
[6] OECD (2018), OECD Tax Policy Reviews: Slovenia 2018, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264303898-en.
[3] OECD (2018), Revenue Statistics 2018, OECD Publishing, Paris, https://dx.doi.org/10.1787/rev_stats-2018-en.
Notes
← 1. The analysis uses excise duty rates as applicable throughout 2017. The excise duty for gasoline is set at EUR 0.47829 per litre as of 22 May 2018.
← 2. The analysis uses excise duty rates as applicable throughout 2017. The excise duty for diesel is set at EUR 0.39272 per litre as of 22 May 2018.
← 3. A new tax applies to vehicles that are deregistered as of 1st April 2019.
← 4. The figure is based on the OECD Global Revenue Statistics Database and includes revenue collected at the federal or central level. It excludes the supranational level, local governments and social security funds, as neither of these government levels collects taxes on energy use, vehicles or road use in Slovenia.