Tax relief for scrapped cars: Will Estonia's new law ease burden on owners?

Around 200,000 vehicles in the Estonian traffic register have destroyed, lost, or suspended registrations. Starting in 2025, owners of these vehicles may be required to pay motor vehicle tax. However, the Ministry of Climate has proposed a bill to exempt individuals who have vehicles with unknown whereabouts registered in their name, as well as those whose cars lack necessary documentation for scrappage, from paying this tax.

Estonia is a country in Northern Europe that borders the Baltic Sea and the Gulf of Finland. The World Bank designates Estonia as an advanced, high-income market economy noted for balanced government budgets, a flat income tax, low tariffs, and low public debt.

In the future, scrap metal owners will have the opportunity to bring their undocumented, old, and unusable scrap metal to metal purchase facilities, thereby significantly enhancing the visual appeal of streetscapes or yards. As per the legislation, removing such vehicles from the registry will be complimentary until 2026, after which a fee of 800 euros will apply.