4 ms·

Why don’t people buy cars in Germany or Sweden with such tax?

chihuahua 7y ago
Because the government of Denmark has presumably thought of this obvious loophole and found a way to close it. I assume if someone buys a car in Germany or Sweden and wants to register it at their address in Denmark, the Danish bureaucracy says "sure, we'll give you the registration papers as soon as you pay the 225% tax on the purchase price of your new car". It's similar when you buy a car in Oregon (no sales tax) and want to register it in Washington (10% sales tax). If that was a way around paying the tax, every single person in the state would be doing it. The government has thought of this as well. And if you say "oh, I'm even smarter than that, I simply won't register the car in Washington", that gets you a felony conviction when you're caught. It's almost as if governments can anticipate some obvious loopholes and close them.
- avar 7y ago
  There's a legal way to avoid this sort of thing, which is to buy a cheap but upgradable vehicle and retrofit "parts", which usually aren't taxed at the same rate. The most famous example of this sort of thing is the "Chicken Tax": https://www.econlib.org/archives/2018/03/why_the_chicken.html https://www.econlib.org/archives/2018/03/why_the_chicken.htm... So as a private consumer instead of buying a $100k BMW and that ends up costing $225k you'd buy the $100k one, and an entry level $50k base model, and have $75k left to spend on moving parts over before you'd break even. When that's considered tax fraud and when it's considered perfectly legal will differ by country. I assume it isn't illegal for danes to buy a new engine, seats etc. for their existing cars without needing to change the VIN.
  - systemtest 7y ago
    Exactly what happens in the Netherlands. Ford Mustang Ecoboost is €70k, a GT is €111k. For the difference of €41k you can easily put in a V8 with over 500 horsepower, change the wiring harness, change the ECU, brakes, suspension. For less than a GT you can pimp out your EcoBoost and create a better car.
- isostatic 7y ago
  > has presumably thought of this obvious loophole So you don’t know
- mikl 7y ago
  They have indeed. If you reside in Denmark, you are required to have Danish license plates (and thus to pay the aforementioned tax). Even if you have your official residence in Sweden, but you stay the night in Denmark a little too often, the tax authorities will deem that as residing in Denmark. The chances of getting caught are high. If someone who dislikes you notices a car with Swedish plates staying the night too often, they might report you, and the fines for violation are terrifying, the tax itself with 50% on top if memory serves.

Because the government of Denmark has presumably thought of this obvious loophole and found a way to close it. I assume if someone buys a car in Germany or Sweden and wants to register it at their address in Denmark, the Danish bureaucracy says "sure, we'll give you the registration papers as soon as you pay the 225% tax on the purchase price of your new car". It's similar when you buy a car in Oregon (no sales tax) and want to register it in Washington (10% sales tax). If that was a way around paying the tax, every single person in the state would be doing it. The government has thought of this as well. And if you say "oh, I'm even smarter than that, I simply won't register the car in Washington", that gets you a felony conviction when you're caught. It's almost as if governments can anticipate some obvious loopholes and close them.

avar 7y ago
There's a legal way to avoid this sort of thing, which is to buy a cheap but upgradable vehicle and retrofit "parts", which usually aren't taxed at the same rate. The most famous example of this sort of thing is the "Chicken Tax": https://www.econlib.org/archives/2018/03/why_the_chicken.html https://www.econlib.org/archives/2018/03/why_the_chicken.htm... So as a private consumer instead of buying a $100k BMW and that ends up costing $225k you'd buy the $100k one, and an entry level $50k base model, and have $75k left to spend on moving parts over before you'd break even. When that's considered tax fraud and when it's considered perfectly legal will differ by country. I assume it isn't illegal for danes to buy a new engine, seats etc. for their existing cars without needing to change the VIN.
- systemtest 7y ago
  Exactly what happens in the Netherlands. Ford Mustang Ecoboost is €70k, a GT is €111k. For the difference of €41k you can easily put in a V8 with over 500 horsepower, change the wiring harness, change the ECU, brakes, suspension. For less than a GT you can pimp out your EcoBoost and create a better car.
isostatic 7y ago
> has presumably thought of this obvious loophole So you don’t know
mikl 7y ago
They have indeed. If you reside in Denmark, you are required to have Danish license plates (and thus to pay the aforementioned tax). Even if you have your official residence in Sweden, but you stay the night in Denmark a little too often, the tax authorities will deem that as residing in Denmark. The chances of getting caught are high. If someone who dislikes you notices a car with Swedish plates staying the night too often, they might report you, and the fines for violation are terrifying, the tax itself with 50% on top if memory serves.