300 prices in Europe

Do those prices include all taxes, registration fees, and any applicable "luxury" or fuel-efficiency taxes? If so, what's the price of the car without the taxes?

As I mentioned in another thread, in the UK the 300C is expected to cost about GBP 30K when it gets here next year. (This figure may not even refer to the fully loaded version.)

I suppose that sales tax (VAT) at 17.5% would be included in that price. Still makes it significantly dearer in the UK. Like I said elsewhere, 'American' cars are expensive for what you get, so that, unless one seeks exclusivity in this direction, these cars are not a popular proposition. You would think, however, that Chrysler (as opposed to Ford & GM with their extensive European mfg ops) would pursue a lower-price policy to compete more effectively. However, their Jeeps and Voyagers sell quite well in the UK and one does see the PT Cruiser. So one can't blame conversion to RHD and compliance with EU regs alone for the prices?

DAS

All taxes included. Probably a small(ish) fee of E 1000 will be added to deliver the car at the dealer and have it filled with lubricants etc. The price of the car without the taxes is hard to say at the moment, but I guess is it would be around E 50.000 for the 5.7, maybe a bit lower. In the Netherlands we don't have luxury or fuel efficiency taxes (except of course the fuelprice). Roadtaxes are monthly and based on the weight of the car.

Martin

Martin, what is your VAT rate? 16%? Special rate on cars?

DAS

Sorry, just to clarify:

Standard rate = 19% VAT on cars = 20%

(Or are you saying you have 39% on cars??? That can't be?)

DAS

I looked it up, now the following is official.

A car without taxes is say E 30,000.- We have VAT (though we call this BTW) at 19% which gives us E 5700 taxes. So far so good. Now, take that E 30,000.- number again and take 45.2% of it. This is E 13560,-. Subtract the enormous amount of E 1540 which gives us E 12,020.-

So, the car 30,000 car will cost me 30,000+5,700+12,020 = 47,720.-

Or, for any given car myprice = (price*0.452-1540 + price*1.19) Nice uh ? Martin

Where does 1540 come from? (what does it represent?)

So basically you have a tax of 64.2% (.19 + .452).

More like insane.

"Martin Boer" wrote

As if the purchase taxes weren't enough, and the gas taxes weren't enough, you have road taxes.

We have road taxes too - for commercial vehicles. Big, heavy, commercial vehicles. Not cars.

Cars don't cause dammage to roads.

I dunno, could be an arbitrary number.

Yes. I thought it was about 40% total, but it is 'slightly' more.

Thanks. :)

The do fill the roads and the Netherlands is a crowded place. Besides all the taxes, our fuel costs 3 times more than in the USA.

I think this explains why Joe Average around here drives a small car. Even the Neon is considered 'average' around here. Small cars are really smaller.

What's really insane is that some people think the VAT should be used in the US instead of income tax. I'm all for a simplified tax code but can't understand why any one would want a VAT tax.

Art, it's the collection mechanism that is used in VAT rather than the high taxes that are common in Europe. Taxes have been high on vehicles in the UK for example, well before VAT was introduced.

With VAT every step in the value chain collects VAT on behalf of the government and remits it normally monthly.

They deduct from the VAT they have collected, all the VAT in their receipts for things they purchased. So a manufacturer buys metal and pays VAT. Makes a box and sells it and collects VAT. Takes the VAT that they paid to buy the metal from the VAT they collected and remits the difference. So it is literally an added-value tax.

Although it seems overly complicated when you write it out, the governments like it because they don't have to wait for the final sale to collect the taxes on the production, wholesaling and retailing stages. Also in order for a company to get their VAT input deductions, they must also have formal receipts from VAT registered companies so it makes an informal business structure more difficult to participate in (for a corporation).

Using a consumption tax (like sales tax or VAT) instead of an income tax is a separate issue. It would be a problem in the US as the Federal Government is not entitled (I think) to collect sales taxes or regulate commerce in the individual states.

Definitely a nutty formula, more like dreamed up by clever British bureaucrats. And what do they call the non-BTW element? Luxury tax?

This should lead to lower pre-tax prices but, when I bought my car in 2001, I inquired in Germany, France and NL. Interestingly, the lowest pre-tax price appeared to be in Germany, from where I duly bought my car.

I did not realise that there was this extra tax on cars in NL, esp not such a peculiar formula.

And finally, yes, cars do damage roads. Nothing wrong with a road useage tax/fee, if only all the money were ploughed back into roads...

DAS

Don't really understand your question. The English-language version of the tax is VAT, which stands for value-added tax.

It is a sales tax, basically. How the government collects its taxes -- the balance of direct and indirect -- is a matter of politics. VAT is relatively easy to collect but falls on everyone equally, whereas income tax is usually progressive in one way or another, i.e. there is a link between earnings and the amount paid.

In Britain no VAT is levied on food, which is thought to helpful to the poorer sections of society, even though this violates one of the priciples of VAT which is that it should be widely levied and not that high. It is curious that this does not help keep the price of food low in relation to other western European countries, where VAT is levied on food, e.g. 7% or 8% in Germany.

DAS

I had a case I was litigating involving the impact of large heavy trucks on roads. The expert testimony surprised me. The testimony was that not using a road was the worst thing and that a properly built road benefited from use and that moderate heavy truck traffic on a properly built road was not a major factor in road wear. Of course, those experts were testifying for the applicant to put in the gravel mine.

Richard.

What a joke. So why are subdivision roads with light traffic in good shape and main roads full of potholes.

For all vehicles, more significantly for large commercial lorries, the effect on the road depends on the load per axle.

DAS

Well, you can have a better system... Both!, In Mexico the income tax (ISR) is of about 30% of your income, and there is also a VAT tax (IVA) of 15%.

And for cars you have the new car tax (ISAN - 10%) plus VAT (15%)

Example

And finally, you pay "tenencia" of 2.6% of the car value (after taxes) each year, is adjusted through the years for depreciation, supposedly on the first year the car losses only 20% and so on.

In Britain we used to have an extra 'ISAN' of 10% of cars, a kind of a luxury tax, but that was abolished years ago. In some European countries there are varying VAT rates for different classes of goods and there may be a highr rate on cars, so the tax may be called VAT but is an ISAN by another name.

I would venture to state that in every larger country there are sales and income taxes. I suspect that the poster querying VAT (Art) does/did not know what VAT is and how it is applied or there are (serious? proposals to levy sales taxes only, eliminating income tax. It could work but would be seen as grossly unfair and unsocial (in most countries, anyway). From an economic point of view it would, however, not be "insane", I don't think.

DAS

Hehehe, you must be kidding. You think I don't have income tax as well ? Martin