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Transition from NEDC to WLTP

Transition from NEDC to WLTP

Transition to the WLTP standard in Luxembourg

The Ministry of Mobility and Public Works (MMTP) has recently confirmed the terms and conditions for the entry into force of the new WLTP(1) standards. These WLTP standards replace the previous standards called NEDC(2) and have a lasting impact on the taxation of leased cars: road tax and benefit in kind.

Road Tax

If it was originally planned that for all cars registered as from 1 March 2020, the calculation of the road tax would be based on the emission rates measured in WLTP standard, the government backed down. Vehicles registered before 1 March 2020 will continue to benefit from the NEDC scheme for the duration of the contract.

The implementation of WLTP values for the calculation of motor vehicle tax is delayed until the entry into force of bill n°7506.”

Until the Government communicates this new date (of first registration) from which the road tax will be calculated on the basis of the WLTP values, motor vehicles will continue to benefit from the NEDC scheme subject to confirmation by the Government as to the modalities of application.

However, it is still advisable, especially for cars with a delivery time of several months, to consider the WLTP value at the time of purchase.

Regarding vehicles registered before 1 March 2020, they will continue to benefit from the NEDC scheme for the duration of the contract.

Calculation of the benefit in kind

The impact of the transition to the WLTP standard will be more significant in the calculation of the benefit in kind applicable to company cars. As a reminder, the calculation of the benefit in kind is based on the CO2 emission rate of the vehicle and the type of engine chosen. Three cases may arise:

transition to WLTP EN newsletter

 

Plug-in hybrid vehicles

These new measures also have an impact on the allocation of public incentives. Plug-in hybrid vehicles are eligible for a premium of €2,500 if their emissions are less than 50 g/km of CO2. For those vehicles registered after 1 June 2020 the WLTP values will apply to assess their eligibility.
Detailed information can be found on the government’s website here.

(1) WLTP is the new cycle imposed on car manufacturers to measure car’s CO2 emissions. This cycle was introduced following the scandals (Diesel gate) that shook the automotive sector in 2015. WLTP is supposed to better reflect the CO² emissions of a vehicle under normal conditions of use.
(2) NEDC is the cycle that was in use before WLTP came into force. Under the NEDC cycle, the CO2 emissions of a vehicle are significantly lower than with WLTP because the cycle does not really reflect normal use conditions.

In practical

These new measures will have an impact on your fleet management. If you wish to benefit from our expertise, contact-us!

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