[NEWS] Zemgale Region: lower taxes for low emissions vehicles


On 1 January 2021, amendments to the Law on Vehicle Operation Tax (TEN) and Company Car Tax (UVTN) entered into force, which provides for lower rates of taxation for vehicles with lower emissions.

Whereas vehicles with higher emissions have higher tax rates than before.

From 1 January, TEN rates have been reduced for more environmentally friendly cars. For lorries with a gross vehicle weight of up to 3.5 tonnes, the tax rates are aligned with those for passenger cars. Trucks and buses with a gross vehicle weight of more than 3.5 tonnes with the lowest CO2 emissions (EURO VI) must pay less than before. In addition, all cars with a gross vehicle weight of up to 3.5 tonnes equipped with gas appliances are eligible for a 10% reduction in tax rates.

TEN rates have been increased for lorries and buses with a gross vehicle weight of more than 3.5 tonnes and higher CO2 emissions (EURO 0-5).

For passenger cars registered in Latvia before the end of 2020, TEN rates are not changed and are calculated as before. For passenger cars manufactured from 2021 onwards, TEN rates are applied according to a new internationally recognized methodology.

From 2021, TEN rates for the use of foreign-registered cars in road traffic in Latvia will decrease. TEN rates are as high as for a car registered in Latvia and their calculation considers the time of use of the car in the territory of Latvia.

Changes have also been made in the calculation of UVTN rates. They increase, indexing the current rates according to the changes in the consumer price index from 2017. A new UVTN rate of 82 euros has been set for company cars with high CO2 emissions and an engine capacity of over 3,000 cm3.

In Latvia, the car fleet is the second oldest in Europe and the average age of cars is around 13 years, which is almost twice as much as the European average. Amendments to the law are one of the measures to promote the change of public habits in the long run and to encourage the replacement of a private car or the renewal of a company's fleet by choosing more environmentally friendly cars.