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A tax on combustion vehicles?

According to Eurostat figures for 2021, Poland has become the EU leader in cars registered per 1,000 inhabitants, at 687. At the same time, 37% of cars registered in Poland are 10–20 years old, and more than 41% are over 20 years old. Should Poles fear the adoption of a tax on combustion-engine cars?

Taxing combustion vehicles

The notion of a tax on combustion vehicles is not a new idea. In 2006, the Polish government presented a car tax bill. Under that proposal, the tax would cover cars registered for the first time in Poland pursuant to the Road Traffic Law. The base tax rate was to be PLN 500 of engine displacement, with a multiplier reflecting the Euro emission standard met by the engine (or possibly the absence of that standard). But the bill was eventually withdrawn in 2007, and subsequent governments have abandoned the idea of such regulation.

In Europe, a tax on combustion vehicles is not unusual, and such levies are in place in countries such as Bulgaria, Germany, and the Netherlands. But the method of calculating the tax, and the resulting tax burden, varies significantly from country to country, so it is hard to use the examples from other EU member states to forecast the amount of such a tax in Poland.

Tax on combustion vehicles in Poland

When looking for the legal basis for the obligation to introduce a tax on combustion vehicles in Poland, we should first turn to the Recovery and Resilience Facility, which was established by Regulation (EU) 2021/241 of the European Parliament and the Council of 12 February 2021. The primary objective of this facility was to rebuild the EU’s economy after the Covid-19 pandemic. The overall value of the programme is EUR 800 billion, and the funds are expected to contribute to the smooth digital transition and green transition of the member states.

In retrospect, the Recovery and Resilience Facility has played a much greater role than simply reviving the EU economy. Indeed, as European Commission President Ursula von der Leyen has pointed out, the fund has become a key component of the Green Deal industrial plan, supporting member states on the path to net-zero emissions with additional REPowerEU financial support. Importantly, this solution was adopted in the form of a regulation, meaning that it is directly binding on EU member states and does not require implementation through national legislation.

The recovery and resilience plan submitted by each member state is subject to assessment and approval by the Commission under Art. 19–20 of Regulation 2021/241. The criteria for assessment are:

  • Relevance
  • Effectiveness
  • Efficiency
  • Coherence.

The National Recovery Plan submitted by Poland was assessed under these criteria and approved by the Commission on 1 June 2022 (Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Poland). The annexes to the proposal specify:

  • Reforms and investments under the National Recovery Plan
  • Arrangements and schedule for monitoring and implementation of the National Recovery Plan, including milestones and targets, as well as additional milestones and targets for loan payments
  • Indicators for achieving milestones and targets
  • Arrangements for providing full access by the Commission to the underlying data.

Also, in principle, the proposal indicated that Poland must achieve milestones and targets no later than 31 August 2026.

The annexes establish two milestones relating to the need to pay fees on combustion-engine vehicles:

  • Entry into force of a legal act introducing a registration fee for emissions-related vehicles in line with the “polluter pays” principle
  • Entry into force of a legal act introducing an ownership tax for emissions-related vehicles in line with the “polluter pays” principle.

The registration fee is to be enacted by the end of 2024 at the latest. The purpose of this fee is to stimulate demand for cleaner vehicles. The amount of the fee is to depend on the volume of the vehicle’s CO2 or NOx emissions.

On the other hand, the deadline for introducing a vehicle ownership tax is the middle of 2026. Again, the amount of the tax should be correlated with the vehicle’s CO2 or NOx emissions.

Revenue from the registration fee and ownership tax should be earmarked for reducing negative transportation externalities and developing low-emission public transportation in both urban and rural areas.

Both charges invoke the “polluter pays” principle. This is one of the fundamental principles of environmental law, also enshrined in the Polish legal system (Art. 7 of the Environmental Protection Law). In the legal literature, this principle is generally understood to have a compensatory aspect and a preventive aspect.

The essence of the compensatory aspect is that the polluter also bears the cost of removing the consequences of the pollution it has caused. The preventive aspect is that the entity’s activities that may contribute to generating pollution should be charged with the cost of preventing that pollution. Thus neither dimension calls for restoring the state prior to the pollution, but only calls for financial responsibility. This is why it is so important that the annex to the proposed Council Implementing Decision specifies the method of spending the funds raised this way. Indeed, the Polish authorities will not have discretion in this regard.


Introduction of a tax on combustion vehicles and a registration fee in Poland seems only a matter of time, as Poland will be obliged to introduce such solutions in accordance with the Council Implementing Decision. These solutions should be expected in the next few years. And as disbursement of funds from Poland’s National Recovery Plan will depend on meeting these commitments, it is certainly in Poland’s interest to introduce these regulations.

However, the amounts of the registration fee and the ownership tax for emissions-related vehicles are not yet known, and drafts of the bills to enact these charges have yet to be released. Therefore, any formulas purporting to calculate the amount of tax to be paid in the future should be treated with caution, as they are generally based on the 2006 tax proposal which never came into force. Examples from other member states are not very helpful either.

But it goes without saying that the tax will be felt by a large proportion of the Polish population. Indeed, data from the Central Register of Vehicles and Drivers show that of the 19.5 million passenger cars registered in Poland, only about 100,000 are electric or hybrid vehicles. Thus, in practice, almost 100% of car owners in Poland will be subject to the new tax. Perhaps for many owners of older cars, a way to avoid taxation will be to register the car as an antique. But definitive conclusions in this regard should be withheld until the actual regulations are revealed.

Karol Maćkowiak, Environment practice, Wardyński & Partners