Owning a vehicle involves a series of fixed expenses that go beyond fuel, maintenance and repairs. One of the disbursements that vehicle owners must make once a year is the payment of the Tax on Mechanical Traction Vehicles (IVTM), better known as Circulation Tax. It is a direct municipal tax linked to the vehicle itself and not to its use, so it is mandatory to pay regardless of whether it is driven on public roads or forgotten in a garage.
The tax is paid based on the fiscal power of the vehicle, in the case of passenger cars; depending on the displacement, in the case of motorcycles; and the weight and number of seats, in the case of trucks and buses, respectively, in accordance with a minimum rate established for the entire national territory, with the exception of the historical territories of the Basque Country and Navarra. In Spain it affects 37.5 million copies and represents an income of 3,900 million euros for the municipal coffers.
However, the law allows city councils to increase the amount of said tax up to double the minimum rate, which occurs in 12 of the 52 provincial capitals, as well as apply discounts of different kinds. Among the advantages that the regulations offer owners are discounts of up to 75% depending on the fuel and the characteristics of the engines and the exemption from paying the tax in the case of historic vehicles and vehicles over 25 years old.
This set of peculiarities "has distorted the purpose of the tax system", denounces the association for the defense of Associated European Motorists drivers (AEA), with differences of more than 150% between provincial capitals and the creation of tax havens in relation to the tax payment.
With regard to the provincial capitals, a medium-sized vehicle, with 11.99 fiscal horsepower, pays 34.08 euros in Santa Cruz de Tenerife; in Madrid, 59 euros; in Barcelona, 68.16 euros; and in San Sebastián, 87.93. In other words, 158% more expensive in San Sebastián than in Tenerife.
In addition to San Sebastián, the most expensive municipalities that AEA cites in its report are those of Vitoria, Bilbao, Tarragona, Barcelona, Lleida, Palma, Ciudad Real, Valladolid, Huelva and Granada. At the opposite pole are Santa Cruz de Tenerife, Melilla, Ceuta, Zamora, Cáceres, Palencia, Jaén and Badajoz.
In order to attract both private users and, above all, large fleets, some municipalities establish minimum quotas and discounts of all kinds to turn the municipality in question into a tax haven for motorists. This fact has motivated many rental and leasing companies to concentrate the registration of their fleets in small municipalities where they have opened branches due to their favorable tax treatment.
According to AEA in its report, eight municipalities with a population between 500 and 14,000 inhabitants, concentrate 183,604 passenger cars out of a total of 461,257. That is to say, close to 40% of company cars in Spain that, according to the association for the defense of drivers, probably will never circulate in these towns.
These municipalities are Colmenar de Arroyo, Robledo de Chavela, Venturada, Moralzarzal, Navacerrada, Las Rozas de Puerto Real and Patones, in Madrid; and Tejeda, in Las Palmas.
The savings of having a vehicle registered in a tax haven can be up to 800% compared to a municipality in the same province. Thus, for example, the rate charged by the mountain municipality of Colmenar de Arroyo or Robledo de Chavela, in the Community of Madrid, is seven times cheaper than that paid in the capital of Madrid. In Catalonia, what is charged in the municipality of Rajadell or Aguilar de Segarra is eight times less than what the owner of a car pays in Barcelona, according to AEA.
The AEA report on municipal automobile taxation is complemented by a list of 25 municipalities in which the number of newly registered vehicles exceeds the number of registered inhabitants. In some municipalities, motorization rates are much higher than those of the United States or Japan, as is the case in Rozas de Puerto Real (Madrid), with 577 inhabitants, where last year 31 vehicles per inhabitant were registered.
