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Car taxation is an instrument to influence the purchase decisions of consumers. Taxes can be differentiated to support the market introduction of fuel efficient and low CO2 emitting cars. This could greatly facilitate the efforts of car manufacturers to meet their obligations by bringing such vehicles to the market.

Contents 1 European Union 2 See also 3 References 4 External links

The Commission has made a proposal for a Council Directive on passenger car taxation which is currently before the Council and Parliament ^[1].

The Commission encourages again Member States to adopt this proposal as soon as possible and to adapt their car taxation policies so as to promote the purchase of fuel efficient cars throughout the EU and help manufacturers respect the upcoming fuel efficiency framework, thus contributing their share to reducing the CO2 emissions of cars. Taxes differentiated over the whole range of cars on the market, so as to gradually induce a switch towards relatively less emitting cars, would be an efficient way to reduce compliance costs for manufacturers.

Fiscal incentives would also be a powerful way of encouraging the cleanest light-duty vehicle classes into the market. Such incentives should refer to a common EU definition applied across the Community, to avoid a fragmentation of the internal market, and cover all relevant emissions taking into account both air pollution and greenhouse gas emissions requirements. For this purpose, a Light-duty Environmentally Enhanced Vehicle (LEEV) should be defined as a vehicle that both meets the next stage of pollutant emission limit values as laid down in the relevant legislation, and stays below a certain level of CO2 emissions. At present, this level should be the Community objective of 120 g CO2/km. The definition of a LEEV should be subject to regular reviews in order to remain focused on the most advanced end of the new car fleet. ^{[original research?]}

• Registration tax.

1. ^ COM(2005) 261, Proposal for a COUNCIL DIRECTIVE on passenger car related taxes, presented by the Commission

• http://eur-lex.europa.eu/LexUriServ/site/en/com/2007/com2007_0019en01.pdf