Motor Vehicle Tax Act (ZDMV-1)

This Act regulates the system and obligation to pay motor vehicle turnover tax (MVT). In 2020, the adoption of the new Motor Vehicles Tax Act (ZDMV-1) introduced a shift in the tax base. While previously determined by engine capacity, power, and fuel type, the tax is now based solely on the CO2 emissions of the vehicle, as measured using the WLTP (Worldwide Harmonised Light Vehicles Test Procedure) standard. The tax is progressive, increasing with higher CO2 emission levels. As a result, vehicles with higher emissions are subject to higher taxation. However, the thresholds for higher tax rates are relatively high, meaning the tax is less effective in promoting the purchase of low-emission vehicles compared to similar measures in some other EU Member States. Additionally, a reduction in the taxable benefit for the private use of electric company vehicles is in force. The benefit has been reduced to 0% of the vehicle's purchase value per month (previously 0.3%).