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Austria: Environmental Automobile Tax

(Apr. 2, 2008) On February 29, 2008, Austria promulgated a law entitled Environmental Act 2007 (BUNDESGESETZBLATT (BGBl) I No. 46/2008). This law makes the tax burden on passenger cars and motorcycles dependent on the amount of carbon dioxide that they emit, and the tax on heating oil dependent on the amount of sulfur that it contains. The new tax rates will become effective on July 1, 2008.

The reform act amends the Act on the Average Use Tax of 1991 (BGBl No. 695/1991) that imposes a tax on the purchase of a new motor vehicle, which is measured according to the amount of fuel that the vehicle uses on average. As a rule, the tax is paid by the dealer and passed on to the buyer in the purchase price. From July 1, 2008, on, the average use tax will be reduced by up to €300 (about US$469) if the carbon dioxide emissions of the car are lower than 120 grams per kilometer; for hybrid cars and those that use biofuels, a reduction of up to €500 (about US$781) is available. The tax is increased, on the other hand, by up to €500 for cars that emit more than 180 grams of carbon dioxide per kilometer, and this threshold value will be reduced to 160 grams of carbon dioxide per kilometer on January 1, 2010.

In addition, the reform act amends the Act on the Mineral Oil Tax of 1995 (BGBl No. 630/94) by imposing a tax of €98 per 1,000 liters of heating oil that has a sulfur content of less than 10 milligrams per kilogram and by imposing a tax of €128 on heating oil containing a higher sulfur content.