Green Tax Reform: Details Known So Far – Austria

The limit value of the CO2 penalty will be significantly reduced in several steps from the middle of next year to 2024. The amount of the penalty will increase from € 50 to € 80 during this period. The amount of the CO2 deduction and the maximum tax rate are also being tightened.

It is true that these adjustments could still motivate some to buy a “pick up” for now. Because if there is an irrevocable written sales contract that was entered into before June 1, 2021, the above rules can still apply during a transition period.

Green vehicles are now explicitly exempt from the NoVA not only electric vehicles, but also, for example, hydrogen-powered vehicles. In principle, the exception will apply in the future to all vehicles with a CO2 emission value of 0 g / km.

Other exceptions will be eliminated, namely motor vehicles for the transport of goods up to and including 3,500 kilograms maximum gross vehicle weight. According to the explanations of the law, this means vehicles of class N1. These are, for example, box vans, pick-up trucks, and small vans. Classic cars, however, are still exempt.

There are also changes to the allowance for commuters. It is clarified that when company bikes or electric bikes are used, the flat rate is not lost even if they are used privately. Weekly, monthly or annual tickets for a collective means of transport have tax privileges. This does not apply if these are considered (by the employer) as part of the salary.

There are also changes in the railway. Specifically, the “green” traction current generated by the railway companies from renewable energy sources will be completely exempt from the electricity tax. Partial relief is provided for other pull currents.

Vice Chancellor Werner Kogler and Greens Minister for the Environment Leonore Gewessler presented new steps towards green tax reform on Saturday. The focus is the increase in the standard excise tax for high-emission cars. “Stinks are getting more expensive,” Kogler said. There are also changes to the flat rate for travelers: mobility that respects the environment (public transport and bicycles) will have tax privileges in the future, as will repair services.

For smaller repair services (including repairs and changes), the reduced tax rate of ten percent will apply in the future. This includes, among other things, bicycles, shoes, leather goods, and clothing. According to Gewessler, a change in the law is required at the EU level to reduce the sales tax on major repairs such as appliances. There are easements for public transport and bicycle travelers. In the future, public transport network cards and season tickets will be completely exempt from non-monetary benefits and those who are entitled to a commuter allowance will also receive it in the future if they use a company bicycle.

Furthermore, renewable energy generated by railway companies for their own consumption will be exempt from electricity tax in the future. This makes green electricity generation cheaper. This eases rail traffic by ten million annually and makes more green electricity possible. At the same time, the energy tax will also be reduced at the European level. This measure represents a saving of 23 million euros in rail transport. In total, public transport can be discounted from 33 million euros, calculates the Ministry of Transport.

Measures are also being taken against fuel tourism. The possibility of reimbursing the amounts of input tax that are attributable to the purchase of fuel for companies from third countries is excluded. In either case, you will have to pay 20 percent of the gasoline and diesel sales tax in the future. This makes refueling in Austria more expensive for them, Gewessler explained.

“2021 will definitely be a year of climate protection,” Kogler said, recalling that “the climate crisis will continue, it is there and it will not go away by itself.” The NGO criticism that more should be done to combat global warming was approved by the Environment Minister. The measures presented today are one step, others will follow, according to Gewessler.

Since this year, the standard excise tax (NoVA) and the motor-related insurance tax have given more weight to a vehicle’s CO2 emissions. The turquoise green federal government is now further adapting the standard excise tax in the sense of “greening.” After all, traffic is considered a child problem in Austria’s CO2 balance. Big cars get even more expensive. In the future, the NoVa will also apply to all vehicles classified as small trucks.

There is resistance from car importers. Here are the most important details of the plan presented today Saturday:

What companies should like less is that in the future all vehicles for the transport of passengers and goods up to 3.5 tons will be subject to NoVa. The same is true for SUVs, pickup trucks and vans, which are considered small trucks and are often registered as such by companies. For the Greens, this looks like closing a loophole.

Green vehicles are now explicitly exempted from NoVA not only in electric vehicles, but also, for example, in hydrogen-powered vehicles. In principle, the exception will apply in the future to all vehicles with a CO2 emission value of 0 g / km.

The CO2 exemption from 115 g / km will be reduced. Next year, 3 grams per kilometer is still planned, but there will be an increase to 5 grams from 2022 to 2024.

If a certain CO2 limit is exceeded, a CO2 penalty must be applied. This will double to € 80 per gram from 2021 to 2024. Next year, the penalty will be 200 grams of CO2 per kilometer and 155 grams by 2024.

The NoVA limit will also be gradually increased. For cars, the limit will be raised to 50 percent in 2021. Every year 10 percentage points are added, making the limit in 2024 80 percent. There is also a 20 to 30 percent increase for the most CO2-intensive motorcycles.

A BMW X4M (256 g CO2 / km), which this year (all rounded) costs 116,000 euros gross (NoVA: 21,600 euros) will cost 119,400 euros next year (NoVA 25,200; +3,600 euros) and then in 2024 127,000 (NoVA: 32,800; + 11,200 euros). A Range Rover Sport SVR is currently around 175,000 euros (NoVA 38,300 euros), next year 193,000 euros (NoVA 56,300; +18,000 euros) and 2024 finally 204,000 euros (NoVA 67,000 euros; +29,000 euros).

Against tank tourism and heavy truck traffic, the possibility of reimbursement of the amounts of the input tax for the purchase of fuel for companies from third countries is excluded. Going forward, you must pay 20 percent sales tax on gasoline and diesel.

The environmental protection organizations Global 2000, WWF and Verkehrsclub Österreich (VCÖ) describe the ecological package presented by the federal government turquoise green on Saturday as a “first step that urgently needs to be followed by new measures and, above all, a general concept of the federal government”. There is a lack of understanding among car importers. The head of ÖBB, Andreas Matthä, naturally welcomed the tax exemption for green electricity generated by the railway on Saturday.

“This is an important first step towards greater equity between modes of transport and strengthens the competitiveness of railways,” the senior ÖBB member said in a statement to the APA. “The electricity we generate from eight of our own hydroelectric plants is an essential pillar of our own power generation. We not only ensure long-term rail operations, but we also ensure environmentally friendly mobility. ÖBB already is the largest climate protection company in the country and we save 4 every year, 2 million tons of CO2. “

The measure will alleviate rail traffic by a total of 10 million euros per year. At the same time, the energy tax will also be reduced at the European level. This measure represents a saving of 23 million euros in rail transport.

The entire tax system must be geared towards climate protection and energy efficiency in order to achieve climate goals, require WWF, VCÖ and Global 2000. This requires not only a persistent Minister of the Environment, but above all commitment total of the Federal Minister Chancellor and Finance, according to Karl Schellmann (WWF), Johannes Wahlmüller (GLOBAL2000) and Michael Schwendinger (VCÖ) in unison.

In particular, they call on Finance Minister Gernot Blümel (ÖVP) to come up with concrete proposals for reducing environmentally damaging subsidies and an effective CO2 pricing model that includes a green bonus. The announcement of a greater orientation of the NOVA (standard consumption tax) according to CO2 criteria is positively valued.

There are problems with car importers. “What is happening now is the attempt to push for tax increases at a surprising moment in the middle of the lockdown, without taxation and without the participation of the automotive industry,” criticizes Günther Kerle, spokesman for Austrian car importers. “In the application that is now submitted, we do not see a spread of the NoVA according to ecological aspects, which has always been announced until now, but after an initial analysis of a de facto tax increase on all vehicle classes. “

The fact that in the middle of a lockdown measures are decided by the back door that would bring more tension for an industry that is already on the ground lacks the sensitivity and appreciation of the automotive industry and is incomprehensible to the industry. Such changes, such as those that require changes in the NoVA, are associated with enormous organizational, financial and technical effort.