REMOVING ENVIRONMENTALLY HARMFUL SUBSIDIES: ROUNDTABLE INTERNAL … · 2019-02-14 · Company cars...
10
REMOVING ENVIRONMENTALLY HARMFUL SUBSIDIES: ROUNDTABLE INTERNAL AND EXTERNAL CONTRIBUTIONS - TRANSPORT Kurt Van Dender Head, Tax and Environment Centre for Tax Policy and Administration, OECD Workshop on Environmentally Harmful Subsidies Ministry of Foreign Affairs and International Cooperation Roma, 14 March 2017
Transcript of REMOVING ENVIRONMENTALLY HARMFUL SUBSIDIES: ROUNDTABLE INTERNAL … · 2019-02-14 · Company cars...
REMOVING ENVIRONMENTALLY HARMFUL
SUBSIDIES: ROUNDTABLE INTERNAL AND
EXTERNAL CONTRIBUTIONS - TRANSPORT
Kurt Van Dender Head, Tax and Environment Centre for Tax Policy and Administration, OECD
Workshop on Environmentally Harmful Subsidies Ministry of Foreign Affairs and International Cooperation Roma, 14 March 2017
Environmentally harmful subsidies?
0
2
4
6
8
10
12
14
2
Main external costs of road use – (average congestion cost; Euro-cent/vehicle-km, 2010)
Congestion
Accidents Air pollution Noise
Climate Change
Infrastructure
Environmentally harmful subsidies?
3
Environmental fiscal reform: align taxes with external costs Environmentally harmful subsidies? Preferential tax treatment (compared to what?) - Some types of energy use, e.g. off road transport fuels sometimes
exempt from excise; concessionary VAT rates for some types of vehicles; generous tax deductibility…
- Some road transport fuels, e.g. gasoline vs. diesel - Some road transport uses, e.g. preferential personal income tax
treatment of company cars - (International aviation and shipping)
Environmentally harmful subsidies?
4
The “diesel differential” T
UR
NL
DN
OR
ITA
GB
RG
RC
DE
UF
INS
WE
BE
LF
RA
CH
EIR
LD
NK
ISR
PR
TJP
NA
UT
SV
KC
ZE
KO
RS
VN
ES
P=
>A
RG
LU
XE
ST
ISL
HU
NP
OL
NZ
LC
HL
=>
ZA
FA
US
=>
IN
D=
>C
HN
CA
NU
SA
ME
X=
>R
US
=>
ID
N=
>B
RA
0
10
20
30
Gasoline (road use) Diesel (road use)
Tax rate (EUR per GJ)
5
Company cars - usage
6
6
Company Cars as % of Car Registrations (2009-2011)
0%
10%
20%
30%
40%
50%
60%
SW
E
AU
T
HU
N
BE
L
PR
T
NO
R
SV
N
GB
R
NL
D
DN
K
AU
S
ES
T
FR
A
ISL
ME
X
NZ
L
SA
F
CH
E
SV
K
ES
P
LU
X
FIN
DE
U
ITA
CA
N
US
A
Source: Personal Tax Treatment of Company Cars & Commuting Expenses (Harding,
2013)
Company cars - usage
7
7
Company car registrations are typically more expensive than private cars & emit more CO2 per km
On average, 12% more expensive & 4% more emissions per km
More than 25% more expensive in Germany, Italy, the Netherlands and the Slovak Republic
Company cars emit between 2% (the United Kingdom) & 16% (Italy) more CO₂ than private cars per km
Company cars are used predominantly for personal purposes & are driven further than private cars
Company cars are driven between 1.5 to 3 times further than private cars (12 studies across 5 countries)
Estimates of business use range from 32-39% of total use
Company cars – source of the subsidy
8
8
For equity, fiscal & coherency reasons, personal income tax systems generally aim to tax income regardless of its form
Employees who can use a company car for personal purposes receive a benefit from doing so (a form of income)
Tax systems estimate this benefit so it can be taxed under the personal income tax regime
Under-measurement of this benefit leads to under-taxation: a tax expenditure
To estimate the tax expenditure, we compare the benefit measured in 26 OECD countries with a neutral “benchmark”
Tax expenditure per company car, 2012, EUR
9
9
2 7
63
2 6
62
2 4
26
2 1
95
2 1
76
2 0
57
2 0
41
2 0
15
1 9
92
1 8
26
1 8
13
1 7
96
1 6
00
1 5
12
1 4
46
1 3
82
1 3
02
1 2
84
1 1
18
1 1
07
1 0
18
80
8
772
616
550
240
57
0
500
1000
1500
2000
2500
3000
BE
L
PR
T
DE
U
NZ
L
HU
N
FR
A
ITA
CH
E
LU
X
ME
X
SV
N
DN
K
Ave
rag
e
SV
K
SW
E
ES
P
SA
F
NL
D
GB
R
AU
T
US
A
ES
T
FIN
ISL
AU
S
NO
R
CA
N
Company cars – total tax expenditure
10
10
Total Tax Expenditure (2012) 21
42
52
5
76
2
64
2
287
749
1,6
81
558
2,7
86
501
1,2
61
87
134
159
11
1,9
95
5,1
66
2,0
18
11
2
615
5,1
43
62
2
162
1,4
40
0%
20%
40%
60%
80%
100%
CA
N N…
AU
S
FIN
ISL S…
DN
K
NL
D
US
A
AU
T G…
SA
F
ES
P
LU
X
SV
N
NZ
L
ES
T
BE
L
DE
U
ITA
SV
K
CH
E
FR
A
PR
T H…
M…
Tax received Estimated tax expenditure% of total tax estimated under benchmark (estimated tax foregone in EUR million)
Source: Personal Tax Treatment of Company Cars & Commuting Expenses (Harding, 2013)
