Denmark puts brakes on plans for 2020 road tax hike on electric cars

Denmark puts brakes on plans for 2020 road tax hike on electric cars
Photo: Liselotte Sabroe/Ritzau Scanpix
A planned increase on registration fees for electric cars, scheduled to take effect in 2020, has been frozen by the government.

The decision to stop the planned fee increases is set out in the 2020 budget, which was on Monday evening presented by the government and its parliamentary support parties, who will vote through the finance law.

The agreement means that the registration fee for electric cars will stay at the current 20 percent of vehicle value in 2020 and will not rise to 40 percent, as previously planned.

Meanwhile, an increase on the basic deduction on registration fees for electric cars will stay at 40,000 kroner, and not increase to 77,500 kroner as planned.

In practice, only electric cars that cost more than 400,000 are eligible for registration fees.

The agreement to freeze road tax increases on electric cars is expected to cost the Danish treasury around 100 million kroner next year.

Meanwhile, the budget will also introduce a deduction of 40,000 kroner to the taxable base value of company cars.

The aim of that measure is to increase the number of green company cars on the roads. According to the budget, it will cost 25 million kroner next year.

Industry interest organization Autobranchen Denmark said it would have liked to see the road tax plans take on a more long-term character, for example by being made valid for three years.

“Consumers are no different from businesses – they want peace of mind when investing,” Autobranchen Denmark CEO Gitte Seeberg said.

“It’s a big investment for Mr and Mrs Denmark to buy an electric car, so they need to make sure that the value of their electric car does not collapse in a year’s time, otherwise we will never come close to (the government target of) a million electric cars in 2030,” Seeberg added in a written comment.

The parties behind the budget have said that they intend to keep taxes on electric cars steady until a commission next year makes recommendations for how to move forward after 2021.

But the four left-wing groups agree that Danish car taxes should generally be arranged so that they encourage transition to greener vehicles.

READ ALSO: Explained: Why is it so expensive to buy a car in Denmark? 

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