In today’s News Flash edition, we would like to present the proposal for the amendment to the Act on motor vehicle tax, where the legislator seeks to support operators of freight and truck transport by generally reducing their tax burden in exchange for increasing toll rates. However, the proposal also negatively impacts the rest of the business environment, which will experience an increase in the tax burden, despite the fact that the overall impact on the state budget is expected to be negative. This proposal has not yet been approved by the government, and its proposed effective date is January 1, 2025.

Changes in the Tax Base

Definition The greatest benefit in the area of motor vehicle tax applies to electric vehicles, which will have a zero tax rate. However, under the proposal, this benefit will no longer apply to all L, M, and N category vehicles powered solely by electricity, as it does currently, but only to vehicles in categories L, M1, and N1. Therefore, electric trucks will no longer be taxed at the favorable rate of zero.

The tax base for trucks will be specified further, and these vehicles will be categorized into M2, M3, N1-N3 types with body code BA or BB, where the tax base will be the maximum technically permissible gross weight in tons and the number of axles according to the vehicle’s documentation. For N3 category vehicles with body code BC or BD, the tax base will be the maximum technically permissible weight of the trailer combination in tons and the number of axles. For vehicles in categories O1 to O4, the tax base will be the vehicle itself. This proposal also abolishes the current taxation of trailer combinations.

Changes in Tax Rates

The proposed law introduces significant changes to tax rates, which are defined in the appendices to the law, as follows:

• Appendix No. 1 – tax rates for category L and M1
• Appendix No. 1a – change of rates previously used for tractors and trailers to tax rates for N1 category vehicles
• Appendix No. 1b – tax rates for categories M2 and N2
• Appendix No. 1c – tax rates for categories M3 and N3 with body code BA or BB
• Appendix No. 1d – tax rates for category N3 with body code BC or BD
• Appendix No. 1e – tax rates for category O.

For L, M1, and N1 category vehicles that are not electric, the annual tax rates remain unchanged. New tax rates will be introduced for other categories. The most significant tax reduction will benefit vehicles in category O, whose annual tax rates are expected to decrease substantially.

Changes in Adjustments to the Annual Tax Rate

One of the most significant changes, which will have the greatest impact on the tax burden for businesses, is the proposed change in the adjustments to the annual tax rate. Under the current regulations, during the first 8 years from the month of the vehicle’s first registration, the annual tax rate is gradually reduced by 25%, then by 20%, and finally by 15%. In the ninth year, the annual tax rate as stated in the appendix of the law is applied, and from the thirteenth year, the annual rate gradually increases by 10% and then by 20%.

This method of adjusting the annual tax rate is proposed to be changed as follows:

• Annual tax rate for the first 36 months from the month of the vehicle’s first registration,
• 10% increase in the annual tax rate for the next 36 months,
• 20% increase in the annual tax rate for the next 36 months,
• 30% increase in the annual tax rate for the next 36 months,
• 40% increase in the annual tax rate for the next 36 months,
• 50% increase in the annual tax rate after the total number of calendar months as per the previous points.

Additionally, the 50% reduction in the already adjusted tax rate for hybrid and hydrogen vehicles and vehicles powered by CNG and LNG will only apply to vehicles in categories L, M1, and N1.

According to the transitional provisions, these new tax rates and adjustments to the annual tax rate are to be applied for the first time when filing a tax return for the 2025 tax period. However, they will need to be reflected in the calculation of tax prepayments for 2025.

If you are concerned about the impact of the increased motor vehicle tax liability on your company and would like to obtain more information, our tax experts will be happy to provide advice in this area.

Barbora Juhásová

Tax Manager | Accace Slovakia

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