ÖTV Rate on Vehicles – What is ÖTV (Special Consumption Tax)?
In our country, there are certain types of taxes defined. Among them, the Special Consumption Tax (ÖTV) is a tax type that is applied only once. This tax, which is generally noticed when purchasing a vehicle, is collected to ensure social welfare and also contributes to the state.
The Special Consumption Tax (ÖTV) is a tax that was introduced in our country to comply with the European Union regulations, and it was not previously present.
What is ÖTV (Special Consumption Tax)?
Many people wonder what ÖTV is, as it is a tax imposed on purchased goods. Let's explore what ÖTV is.
ÖTV, which stands for Special Consumption Tax, was implemented in our country in 2002. This move was made to harmonize with the European Union and came into effect with the law numbered 4760. This tax, initiated and applied by the European Union, was introduced to provide social benefits. For this reason, ÖTV is applied to products that are considered luxury or harmful to health, such as fur, jewelry, cigarettes, and alcohol.
ÖTV aims to provide social benefits and, with its contributions, greatly helps the state treasury. Since the items subject to this tax are limited, it is easy to track them. It is determined for products such as valuable jewelry and vehicles and has a broad scope.
Unlike VAT, which applies to every new product, ÖTV is not paid every time a product is bought or sold. The person who imports the product is generally responsible for paying the ÖTV. For example, the ÖTV on a brand-new vehicle is paid only once, and no additional ÖTV is required upon resale.
In addition to the general law regarding ÖTV, there are four different types of products and services subject to tax, as follows:
- The former fuel consumption tax has been abolished, and now the tariff for fuel and oil derivatives (Tariff No. 1) applies.
- The former vehicle acquisition tax has been abolished, and now the tariff for vehicle taxes (Tariff No. 2) applies.
- The former additional VAT has been abolished, and now the tariff for products like alcohol and tobacco (Tariff No. 3) applies.
- The former luxury VAT has been abolished, and now the tariff for products like cosmetics, white goods, and similar items (Tariff No. 4) applies.
Persons liable for ÖTV are generally of interest. According to Article 4 of the relevant law, those responsible for paying this tax have been identified. For more detailed information, you can read Article 4 of the law.
ÖTV Rate on Commercial Vehicles
Commercial vehicles are evaluated in a different category compared to regular passenger vehicles. These vehicles are divided into light commercial vehicles and other commercial vehicles, and they may have different ÖTV rates.
In our country, ÖTV rates collected from tax payers can vary from year to year. These rates are generally determined with new laws and are part of efforts to increase the level of social benefit. With the tax update announced in January 2022, the new ÖTV rate for motor vehicles was revealed. According to these rates, the determination is made based on the engine displacement of the vehicles.
Commercial vehicles are those we generally see on the road, such as taxis, buses, and minibuses. These vehicles, which are preferred for commercial purposes, help individuals earn money. For this reason, they are subject to different tax rates compared to regular passenger vehicles. When calculating these tax rates, if the vehicle's engine displacement is less than 1.6 cm³ and the price without tax is below 120,000 TL, a 45% ÖTV is applied. If the vehicle price is between 120,000 and 150,000 TL, the ÖTV is 50%, between 150,000 and 175,000 TL it is 60%, between 175,000 and 200,000 TL it is 70%, and for vehicles over 200,000 TL, a 80% ÖTV is applied. These amounts may have changed with recent regulations, so official announcements should be checked for the most accurate information.
As shown in the statistics above, these tax rates increase or decrease depending on the price of the vehicle. In this context, the ÖTV rate on commercial vehicles is determined as explained above.
ÖTV Rate on Brand-New Vehicles
Brand-new vehicles are typically purchased by individuals for personal use or by those in the car rental business. These vehicles, being new models, offer customers a reliable and low-maintenance option, making them a preferred choice.
The ÖTV rates on brand-new vehicles are determined using the same tax rates as on other vehicles, so there is no special examination required. Especially in car rental businesses in cities like Istanbul, these brand-new vehicles are subject to ÖTV rates as part of the tax legislation.
ÖTV Rate on Luxury Vehicles
The ÖTV rate on luxury vehicles is generally much higher than on other vehicles. This is because ÖTV is determined based on the engine displacement, and the larger the engine, the higher the ÖTV.
For luxury vehicles, the ÖTV rates for vehicles priced over 200,000 TL are generally around 80%. With recent discounts and changes in laws, these tax rates may have undergone changes. To see the current tax rate, one can review the latest regulations.
