IVTM is payable even if the vehicle is prohibited from circulating

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the application of the Tax on Motor Vehicles (IVTM) in relation to urban mobility restrictions. The inquiry focused on determining whether the taxable event occurs when a vehicle, although registered, is prohibited from accessing certain public roads because it does not meet the environmental requirements demanded by the municipality.

What the DGT has ruled

The DGT establishes that the taxable event for the IVTM requires vehicles to be fit for circulation on public roads. However, the administration clarifies that eligibility for this tax is defined by two specific criteria:

• That the vehicle is registered in the corresponding public registries.
• That the vehicle has not been deregistered from said registries.

In this sense, the tax authority determines that it is not relevant to the tax whether the circulation of a vehicle is not permitted on certain public roads. If the vehicle meets the registration requirements and has not been deregistered, the tax obligation persists, regardless of the mobility limitations imposed by environmental criteria in the municipality of residence.

What this means for you

This ruling directly affects owners of vehicles that are subject to mobility restrictions. If you own a vehicle that, due to its environmental label or age, is prohibited from traveling on the public roads of your municipality but maintains its current registration, you must continue to pay the IVTM in full.

The applied regulation, the Recast Text of the Law on Local Regime (TRLRHL), links the tax obligation to the status of being a registered vehicle and not to the effective capacity to travel through all the streets of a specific locality.

What you should do

In light of this resolution, it is necessary for owners of vehicles with circulation restrictions to verify their administrative status in the vehicle registry. Since the prohibition of driving in certain areas does not exempt one from paying the local tax, it is fundamental to consider this cost in the management of your vehicles. It is recommended to assess each particular situation to understand the impact of environmental regulations on the local tax burden.