
Rainer Uukkivi, director of sales Longo Group, the largest seller of used cars in the Baltic countries, considers, that in addition to the sharp downturn in the sales of cars at the beginning of this year many automobile owners could be beginning to
sell their cars to Latvia and Lithuania, to receive a refund
of registration fees. Marketplace for the sale of used cars. Photo: Longo
Rainer Uukkivi, director of sales Longo Group, the largest seller of used cars in the Baltic countries, considers, that in addition to the sharp downturn
in the sales of cars at the beginning of this year many automobile owners could be beginning to sell their cars to Latvia and Lithuania, to receive a refund of registration fees.
“If at the end of the last decade the increase in the vaccine on alcohol led to scale border trade, then now a tax on automobiles could increase exports of used cars to Latvia and Lithuania. Then Latvia went only taxes, now the cars of Estonian people, Uukkivi predicts.
The Law on the tax on motor vehicles, and the EU requirements provide that if a vehicle is sold over the border, is excluded from the Estonian road registry, a determined part of the registration tax can be recovered.
“In Estonia there could be dozens of such companies ready to start mediary activities to sell used cars in Latvia,Lithuanian or even Finnish markets”, Uukkivi predicts.
According to the law, the possibility of refunding the registration tax will be in force from 1 July of this year. By this time the Ministry of Finance will have developed the exact procedure for people to apply for a refund of the money.
According to the law, no refunds will be made for amounts of less than 300 euros. If the vehicle has been registered in Estonia for less than one year, the main registration duty of 150 euros for light vehicles and 300 euros for trucks with full weight up 3,5 tonnes is not refundable.
The Refundable Registration Fee is calculated on the day the vehicle withdrawal from registration at the primary rate in effect at the moment of payment of the Fee. Refunds will only be made for vehicles up to 10 years old.
For the first three weeks of January of this year the purchases of cars in Estonia have sharply reduced from data from the Department of Transport, two and half fold fewer sold used light vehicles than at the same time in the last year.
An even greater drop in the number of used cars registered for the first time in Estonia, where the number of transactions has fallen by more than three times. According to Uuukkivi, the same decline will continue in February.
“Despite the new tax, people are not refusing to buy automobiles, and the market is likely to normalizebythesummer,”he explained.
According toLongo’srepresentative,the annualtaxonthevehiclessoldbytheymainlyrangesfrom50to200euros,andthetaxisfrom50to200euros.The one-timeregistrationchargeusuallydoes not exceed1000euros.