Discount on buying electric cars valid through 2023

21.11.2022 - 21:55
epa09046411 Volvo Cars presents the company's new electric car model Volvo C40 Recharge, in Stockholm, Sweden, 02 March 2021.  EPA-EFE/Claudio Bresciani/TT SWEDEN OUT
 Mynd: EPA-EFE - TT
The Minister of Finance and Economy has proposed that the VAT discount for purchasing electric cars will be valid until 2023, regardless of the number enjoying the concession. Previously, it was thought it would stay in place until 20,000 electric vehicles received the discount.

The minister has submitted a bill to amend various laws on taxes and fees. That bill awaits its first debate but included is a statement that it's likely the 20,000 number will be reached by the middle of next year. 

It says that the government is considering how "support should be maintained for the purchase of clean energy vehicles by individuals, how car rental companies should be encouraged in the transition to cleaner energy, and how to support more environmentally-friendly large and heavy goods transport." 

It is believed that a decision on how the government intends to structure its support can be expected by the end of next year at the latest.  

The proposal to eliminate the 20,000 limit on those getting a VAT discount is designed to ensure consumer predictability. However, it is estimated that the revenue loss to the treasury due to the change could be up to 3.8 billion ISK, and it's also assumed that the number of electric cars will rise further when bought by households, car rental providers and other companies. 

The case is discussed on FÍB, the Association of Icelandic Car Owners website. Runólfur Ólafsson, the association's managing director, says he expects the following steps to be taken when the 20,000 electric car milestone is reached. He also welcomes the fact that the minister has increased the possibilities for transport to play its part in the move to greener energy.

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