Sustainable mobility: discounts for eco-friendly vehicles and taxes for polluting vehicles
Highly committed to reducing the ecological impact of travel, the Luxembourg government grants financial advantages to applicants to promote greener mobility.
Thus, since 2019, if you buy a zero-emissions car, i.e. one with an engine powered by electricity or hydrogen leads to a purchase discount of €5,000.
For hybrid vehicles (electric and fossil-fuel) with emissions less than or equal to 50g of CO2/km, the discount awarded totals €2,500.
This measure is considered more advantageous and a greater incentive, and for residents it replaces the tax benefit model that was implemented in 2017.It is therefore not possible to combine a purchase discount and tax deductions.
Note that since 2020, the Luxembourg State has applied a new calculation method to assess the environmental impact of motorised vehicles.
For electric and hybrid vehicles, the rules remain the same: emissions must be less than or equal to 50g of CO2/km to benefit from a purchase discount. However, the calculation is based on a new standard, the “Worldwide Harmonised Light Vehicles Test Procedure” (WLTP), allowing an estimate of CO2 emissions that is closer to reality than the old calculation method. The new calculation method will be applied to vehicles put on the road from June 2020.
This new standard also has an impact on the calculation of the annual tax on road vehicles, which is also based on your vehicle’s emissions: the more polluting your vehicle is, the higher the tax to be paid each year. Here, only vehicles put on the road from 1 March 2020 are affected by the new calculation method.
Also on the insurance side, green mobility allows you to benefit from discounts on your insurance premium.