If the employee or their family is permitted to use the business automobile for personal purposes, they are responsible for paying the company car tax. For taxation reasons, it is seen as a perk offered by the company and is regarded as a benefit.

The commercial car levy intends to impose a fee on vehicles possessed by vendors, that are utilized not only for business growth but also for individual needs. The calendar year is the revenue time frame for the commercial GST.

Taxpayer

A business or a subsidiary of a multinational enterprise that is listed in the Trade Register is liable for this tax type. An economic unit that is listed in the Corporate Record, and that possesses a transport vehicle is also expected to pay the tax on a company car. 

Taxable cars 

The carriage that is enrolled in the possession or keeping of a business, a division of a global firm, or farmland is taxable. The wheels that are used following a contractual agreement or that are borrowed from an individual other than a business are also included in the list of tax-liable auto machines. 

This list also includes a vehicle that a trader owns or holds and that is used to transport travelers and their luggage. These vehicles shouldn’t have more than eight seats, not counting the driver’s seat. The car must have been listed as a passenger vehicle in the register.

In addition, the tax must be paid for any vehicle with a maximum weight of up to 3000 kg that is licensed as a means of freight transport and contains more than three seats.

Tax rates 

For such an automobile, which was initially licensed after January 1, 2005, and for which details relating to the engine power is recorded in the wheels license record, the accompanying sums shall be charged as commercial vehicle levy:

Table 1

Engine capacity	2016-2020 (in euros)	From 2021 (in euros)
up to 2 000 cm3	29	31
– between 2 001 cm3 and 2 500 cm3	46	49
– between 2 501 and 3 000 cm3	62	66
above 3000 cm3	82	82
Electric car	10	10

Payment of tax 

A taxpayer is required to deposit the business car duty for every car they own or lease into the Budget deficit for the applicable time frame. An individual is required to submit the tax to the Public treasury before the National technological examination is conducted.

The tax must be provided each month while the work agreement is in effect if the person who uses an automobile but is not recognized as its owner instead use it under the work agreement. An individual has the option to fully pay their taxes for the entire taxation term in advance before the Official technological examination.

Exemptions 

Company automobile tax is not required to be paid:

• By a subsidiary of an international retailer. 
• By a farm for a car that is utilized in a lease agreement. 
• For an automobile, the owner has withdrawn from the list due to alienation. 
• For a motor that is recorded as an athletics car. 
• For the moment that the car recorded in Latvia had been taken outside of the country.
• For the duration when the car licensing had been briefly halted.
• for the duration when the usage of it roadways had been forbidden by officials.
• for an automobile that had been licensed with the category of a vintage moving engine. 
• For automobiles owned by a person appointed by the maker of the automobile.
• for cars used exclusively for business purposes. 
• for autos that are classified as emergency vans.