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Valencia and Barcelona rebel against the ‘tax exile’ of vehicle rental companies

The exponential increase in vehicle renting and leasing that has occurred in Spain in the last five years is generating an unexpected effect in the cities where this formula has been implemented with greater force. Despite the fact that the mobile park in the renting modality has shot up 66.07%, according to the figures of the Spanish Vehicle Renting Association (AER), the impact on the traffic tax of the large cities where they operate a good part of these vehicles has been greatly reduced.

Moreover, the City Councils of Barcelona and Valencia, the capitals of the autonomous communities that account for 40% of renting customers, have detected a loss in collection although the number of vehicles that circulate in both cities has not decreased by the same amount.

The two cities attribute this situation to the increase in renting and leasing, as companies are looking for municipalities with less fiscal pressure to register their fleet even though its use will occur mainly in other cities. The technicians of the Valencia Department of Finance, in fact, have already verified the flight of registrations to other localities to avoid the higher taxes that occur in the largest cities, according to Councilor Borja Sanjuán.

“It is a relatively new phenomenon because before the registration was linked to the residence of the owner of the vehicle. The situation changed with the rental companies, which sought the highest tax benefits and registered their fleets in municipalities with lower taxes. growth in renting and leasing among individuals has further intensified the loss in collection “, explains the mayor.

The AER data on the evolution of the market confirm the exponential growth of renting among individuals. Individuals, according to their reports, are the customers who have increased their presence the most in the fleet of vehicles for rent in the last five years “with increases in relative terms of 857.98%”. The weight of this customer segment in the rental park has thus gone from 2.35% in 2015 to 15% in 2020, 12.65 percentage points more.

As a result of this shared damage, the municipalities of both capitals have established an alliance to seek legal solutions that prevent the leakage of registrations or that at least do not imply a reduction in their collection. Madrid already tried unsuccessfully in 2005, during the mandate of Alberto Ruiz-Gallardón, to put an end to the problem of “tax havens” for the registration of vehicles that arose in the Community such as Moralzarzal or Robledo de Chavela, two towns with 16,373 inhabitants and 84,361 vehicles registered in 2017. The council’s claim to recover the 62 million it calculated that the escape of vehicles cost it, however, was rejected by the Supreme Court.

Barcelona and Valencia want to resume now, 15 years later, that attempt by Madrid and propose a joint strategy from another legal perspective. One of the proposals being considered, for example, is that the circulation tax becomes autonomous. That is to say, that the autonomous governments manage the collection and that, subsequently, the income is distributed according to the real traffic registered by the populations. With this, the technicians understand, a more balanced distribution would be achieved, since the margins would be the same for all municipalities.

Another possibility that is on the table and that will be transferred to the Spanish Federation of Municipalities and Provinces (FEMP) for analysis is that the tax is not paid by the owner, as is currently the case, but the end user in his place of residence.

The two cities have already initiated contacts so that the finance technicians, in the hands of the socialists in both consistories, work together on a solution that responds to all sensitivities. And it is that, the final proposal will be transferred to study and debate in the FEMP, the organism that represents all the Spanish city councils and that must give validity to the initiative.

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