The tax incentives in the IVTM and "eco-friendly cars": The spanish case

Abstract

This article describes research that was carried out regarding the tax incentives in Spain associated with the "eco-friendly car," which are reflected in its share of taxes on motor-driven vehicles. The study focused on the electric vehicle, the hybrid, and the liquefied petroleum gas vehicle. First, the current regulatory framework was addressed. The maximum bonus limits were considered, as well as how each of 68 cities examined the incentives. The qualitative and quantitative differences among the Spanish cities were discussed. Next, the annual tax savings on the Tax on motor vehicles (IVTM) quota were calculated, and the differences in the tax savings depending on the municipality and type of vehicle were noted, as well as the temporal duration of the bonus. Finally, the average tax savings were calculated based on the type of vehicle, power and municipality. It is clear that, although the tax incentives are positive, they must be complemented by other measures if the public authorities in Spain want to achieve a change in mentality and an increase in the acquisition of "eco-friendly cars" that eliminate pollutants (powered by the combustion of gasoline or diesel).