Car tax
On 9 August, the President promulgated the amendments to the Motor Vehicle Tax Act and modifications to the Traffic Act, which will enter into force in 2025.
The modifications to the Traffic Act establish a registration fee for automobiles (category M1) and vans (category N1), which must be paid before the vehicle is entered in the register or before the first change of owners if a registration fee for the same vehicle has not been paid yet. For both M1 and N1 vehicles, the registration fee consists of a basic component and a CO2 specific emissions component (except for fully electric vehicles), but for M1 vehicles a mass component is also added.
The Motor Vehicle Tax Act will impose an annual tax liability on vehicle owners or authorised users. In addition to vehicles in categories M1 and N1, certain vehicles in categories L (motorcycles and mopeds), MS2 (wheeled off-road vehicles) and T (wheeled tractors) are also subject to vehicle tax, unlike in the case of the registration fee. For M1 and N1 vehicles, the amount of the tax is calculated on the same basis as the registration fee. For the other categories, the amount of the tax depends on fixed legal parameters such as the age of the vehicle and the engine power. Vehicles older than 10 years are taxed at a lower rate.
Both the registration fee and the motor vehicle tax are determined using an age multiplier (except for the basic rate) for M1 and N1 vehicles, i.e. older vehicles are taxed at a lower rate.
Act on Ratification of the Double Taxation Convention between Estonia and Qatar
On 11 September, the Riigikogu adopted the Act on the Convention between the Republic of Estonia and the State of Qatar for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance and the Protocol Thereto.
The convention will enter into force after both countries have notified each other of the completion of the domestic procedure necessary for the convention to enter into force.