Car tax reform

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If you've ever bought a car that didn't have Finnish plates, I'll tell you why you got Finnish plates so quickly. Or alternatively, if you drove with transfer stickers for a month and wondered where the plates were - your question will be answered in this blog.

Before 2021, car importers had a problem with the registration of the cars they imported. The Finnish tax system is set up in such a way that the car must in practice be sold to the end user before it can be registered in Finland. The reason is that there is a slight oddity in the tax treatment of the importer. If the importer company registers the car in its own name before selling it - it will have to pay more in other taxes when it sells the car.

Before 2021, only a small proportion of car importers were registered as "registered agents" with the tax administration. A registered agent means that when you sell a car you have imported, you can apply for the registration plates immediately to the customer, and the car tax is applied for and paid retrospectively. Becoming an agent was a cumbersome and reasonably time-consuming process.

Most car importers were therefore not agents until 2021, when the registration plates were only issued after the car tax was paid. The car could be handed over to the customer for driving with transfer stickers until the car tax was paid. Taxes on mass-produced cars came in days or weeks, but for less common cars the tax decision took a month or so.

In December 2020, a button appeared on the Tax website allowing anyone with a business ID to apply to become a "Registered Agent". In other words, the Tax Administration made it possible for anyone to register their imported cars in Finland and resell them without having paid car tax. Most of the old players in the sector joined, but this possibility attracted a huge number of new players to the market.

Car imports were already growing strongly, but this added to that growth. This led to a significant increase in processing times for the tax administration. For example, a car registered in January 2021 may not have received a car tax decision until September 2022.

Consider a situation where a car is imported by a registered agent on 1/2021. The car is registered in Finland and sold to the customer. The customer has paid the car and the car tax to the seller. The processing time for the car tax decision for this car would be 20 months. Once the decision has been issued, the car tax payment period is approximately 6 weeks. We are talking about a time window of almost two years that the tax administration has given the importer "payment time".

To the best of my knowledge, no registered agent has been assessed for creditworthiness or liquidity, nor has the agent been required to provide any kind of guarantee or pledge to the tax authorities. Nor is there any known situation where import volumes have been restricted.

It is probably an endless loan.

Car taxes per car range from hundreds to hundreds of thousands of euros.

The situation raises questions. In Finland, you are not allowed to use a car on the road if you have not paid car tax. Who pays the car tax if the importer does not fulfil his obligation? How much car tax is unpaid?

Have you recently bought a car registered in Finland? Have you paid car tax on your car?


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