Germany mulling tax break for green cars

Germany mulling tax break for green cars
Photo: DPA
The German government is reportedly considering temporarily eliminating taxes on low-emission new cars in an attempt to aid the country’s ailing auto industry.

The regional daily Rheinische Post on Thursday reported that all cars in the greenest classes Euro-5 and Euro-6 purchased next year would be exempt from annual taxes – Kfz-Steuer – for two years.

Anyone buying a car with the emissions class Euro-4 – which covers the majority of all autos registered in the past three years – will be exempt from taxes for one year.

Drivers not planning to buy a new ride next year reportedly won’t see their car tax change in 2009 regardless of its pollution level, though.

Government sources put the cost of the tax breaks at €2 billion for next year. The paper reported the federal government must still cajole German states to agree to the plan by giving them part of its VAT income, because the Kfz-Steuer is state revenue.