New data shows that motor vehicles generate more than €440 billion in taxation per year for national governments in the major EU markets plus the UK, the European Automobile Manufacturers’ Association (ACEA) reports.

The taxes fall into three broad categories: vehicle acquisition (VAT, sales tax, registration tax); ownership (annual circulation tax, road tax); and motoring (fuel tax).

Motor tax revenues collected by governments have increased by almost 3% compared to the previous year, and the grand total of €440.4 billion is equivalent to more than two and a half times the total budget of the European Union.

This just goes to show the sheer scale of the importance of the automobile industry to Europe. It is clearly paramount to the overall health of the EU economy, and government budgets in particular, that we can successfully re-launch our industry in the aftermath of the COVID-19 crisis.

—Eric-Mark Huitema, ACEA Director General

ACEA published the data in the 2020 edition of its Tax Guide, which compiles the latest information about taxes on vehicle acquisition (VAT, sales tax, registration tax), ownership (annual circulation tax, road tax) and motoring (fuel tax) in the EU and other key markets around the world.

The top 5 countries with the highest motor tax revenues are:

1. Germany − €93.4 billion
2. France − €83.9 billion
3. Italy − €76.3 billion
4. United Kingdom − €54.1 billion

5. Spain − €30.0 billion

According to the new Guide, 24 countries levy car taxes partially or totally based on the CO₂ emissions and/or fuel consumption of a vehicle. The three countries that do not apply CO2-based taxation are Estonia, Lithuania and Poland. Several countries still tax cars on their power, price, weight, cylinder capacity, or a combination of these factors.

The Tax Guide also shows that stimuli for electrically-chargeable cars are available in 24 out of the 27 EU states now. However, just 13 member states offer purchase incentives, such as bonus payments or premiums, to buyers of electric cars. Most countries grant only tax reductions or exemptions.