Chamber of deputies partially abolishes road tax and supports electromobility

In response to high fuel prices, the chamber of deputies approved a government bill partly abolishing the road tax and granting tax advantages for the use of low-emission vehicles.

Road tax

Within the limits of applicable EU legislation, the bill abolishes the road tax for cars and buses and reduces the tax liability for trucks: a tax liability should only arise when a specified number of axles and total weight (e.g., for vehicles with two axles, 12 tonnes) is exceeded. The proposed changes shall already apply for 2022, regardless of when the law enters into force. The duty to pay advances on road tax for all types of vehicles during 2022 has already been abolished by the Minister of Finance. At the same time, the government plans to take advantage of the possibility to abolish the road tax under EU legislation: this is possible if the member state has introduced a toll system for traffic charges on selected roads; the Czech Republic fulfils this condition.

Income tax

The government's proposal also reduces the amount of taxable income that is added to the tax base of employees using company cars for private purposes. For low-emission vehicles, this amount will be 0.5% of the purchase price of the vehicle instead of the current 1%. A low-emission vehicle is defined as a road vehicle in the M1, M2 or N1 category that does not exceed the CO2 emission limit of 50 g/km and 80% of the emission limits for air pollutants as per the supplement/EU regulation on type-approval of motor vehicles with respect to emissions from light passenger vehicles (Euro 5 and Euro 6). The new rules should apply starting from the 2022 taxable period, regardless of when the vehicle was acquired. The months in which the low-emission vehicles were used for private purposes and the law was not yet effective will be considered in the annual settlement of advances.

The bill further shortens the depreciation period of equipment serving exclusively the charging of electric vehicles or vehicles powered by an internal combustion engine and an electric motor (classic charging stations as well as wallboxes) from 10 to 5 years by reclassifying them from the third to the second depreciation group. Taxpayers who have acquired charging stations before the act’s effective date should be able to reclassify them into the second depreciation group in the 2022 taxable period, or include them directly in this group if they have not yet been depreciated.

The bill also includes an amendment to the Air Protection Act abolishing the obligation to mix biofuels into fuels. The bill will now be considered by the senate.

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