Changes in car taxation on 1 January 2021

Car tax when the structure of the vehicle changes

If the structure, purpose of use or ownership of the vehicle is changed after the first registration in a way that affects taxation, the Finnish Transport and Communications Agency (Traficom) will debit the car tax.

Car tax is not debited with regard to a change to the structure of the vehicle that can only be proven by measuring the speed of the vehicle. In practice, the regulation applies to situations involving the upgrading of light two-wheel powered vehicles, three-wheel mopeds and light quadricycles. 

Tax liability when the structure, purpose of use or ownership of a vehicle changes

When a car tax refund paid based on a disability is recovered, the taxpayer is the recipient of the refund, meaning the owner or possessor. In all other cases, the taxpayer is the owner of the vehicle at the time when the change in the factor affecting the basis of the vehicle’s taxation occurred. If determining the owner is not possible, the taxpayer is the owner of the vehicle at the time when the tax authorities became aware of such a change.

Penalty fees

The regulations concerning a penalty fee and a car tax violation are repealed and replaced with a tax penalty, late-filing penalty or negligence penalty based on the nature of the violation.

A tax penalty can be imposed if the car tax return or other statutory information, document or clarification that has been submitted is incomplete or incorrect or if it has not been submitted at all.

A late-filing penalty can be imposed if the tax return was submitted late, but before the tax decision was made. A late-filing penalty can also be imposed if the taxpayer independently corrects or complements the information used as the basis of car taxation to the taxpayer’s own detriment after the set deadline, but before the tax decision is made.

A negligence penalty can be imposed for neglecting to comply with the duty to declare, the clarification obligation, the examination obligation, the accounting obligation, the recordkeeping requirement, or the obligation to keep a driver’s log. This refers to neglecting obligations that are not related to duty to declare taxes.

Interest for late payment in certain situations

Interest for late payment must be paid on car tax when the tax authority carries out taxation on the basis that there is a vehicle in use or in the Transport Register on which no car tax return has been submitted, or the car tax return has been submitted after the set deadline and the levying of tax has been delayed as a result.

When the Finnish Transport and Communications Agency carries out taxation, the interest for late payment is calculated as of the time when the tax authority became aware of the change in the basis of taxation. Therefore, in these situations interest for late payment must also be paid for the time before the due date set in the tax decision. This means that it is not possible to gain interest-free time for payment by violating the regulations on submitting a tax return.

Applying for a preliminary ruling in car taxation

For a fee, Traficom can issue a preliminary ruling on how the Car Tax Act applies to the taxation of a vehicle after the first registration. A preliminary ruling can also be issued on the taxable value of a vehicle or the amount of tax.

A preliminary ruling is issued for a fixed period, and a legally valid preliminary ruling is followed as binding upon the request of the recipient of the preliminary ruling during the period, for which it has been issued, or until the end of the following calendar year after it was issued at maximum. A preliminary ruling on taxable value or the amount of car tax is valid for a maximum of three (3) months as of the date of the ruling, however.