New Walloon car taxation means higher taxes for expensive EVs

Wallonia is finally delivering its car tax reform after much bickering. It will take effect from July 20th and apply only to registration tax (TMC), the tax that must be paid when a new vehicle is purchased and thus registered before it’s allowed on the street.

The annual circulation tax will remain unchanged, but the new version of the reform will retain the central objective of encouraging the purchase of lighter and less polluting cars. However, the more expensive EVs will be disadvantaged in this system, especially if they are powerful and heavy.

Heavier EVs taxed more

Although the original, complex system was simplified, the heavily criticized calculation formula of the circulation tax – based on coefficients related to CO2 emissions but also on the mass or weight of the vehicle – remains unchanged. This means that because EVs tend to be heavier, they will therefore be disadvantaged, especially if they are powerful and in popular SUV models.

In general, EVs and hybrid vehicles get a nice boost, but according to the newspaper L’Avenir, the differences can be enormous. Registration tax is reduced by 90% for cars under 120 KW and 74% for vehicles over – idem ditto for hybrids that benefit from a 20% discount.

But if a Renault Megane, for example, a Peugeot 208 or the Opel Mokka electric, does well with a TMC of 50 euros (instead of the current 61,5 euros), it is very different for a Tesla, which ends up with a TMC of 1 404 euros (Model Y), 1 588 euros (Model 3) and 1 910 euros (the new Model C). That is more than a BMW 3 Series on gasoline (1 477 euros) or diesel (524,4 euros).

‘Social justice’

“You can still choose an EV in lower categories,” Minister Henry justifies the decision, speaking of ‘social justice’. “If someone can afford such an expensive car, they can also pay a high registration tax,” he says.

Whether your car is electric or not, the vehicle’s power is a defining factor in calculating the TMC. It is also necessary to base the calculation on five years and to see that for EVs, the road tax, which must be paid every year, and which is unchanged for the moment, remains lower (92,90 euros) than for internal combustion engine models.

The goal of the reform remains to encourage Walloons to purchase new or used vehicles that are lighter, less powerful, and emit less CO2. Regardless, this will make purchasing some of the more expensive EVs less attractive. Unlike in some other countries, there are also no financial incentives for EV purchases in Wallonia.

The leasing of company cars, which currently accounts for most of the sales of electric vehicles, depends on companies based mainly in Flanders or Brussels, which therefore do not pay the registration tax in Wallonia.

Reduction of TMC based on age

The Walloon government has also provided reductions in the TMC for large families and families in shared custody. It should also be noted that a degressive TMC will be applied to used vehicles based on the car’s age. The reduction is 10% per year up to 5 years and 5% per year after five years with a limit of 15 years.

The new tax system should contribute to the Walloon goal of reducing greenhouse gas emissions by 55% by 2030 compared to 1990. Transport, mainly road, accounts for 22% of Walloon emissions.