Important changes to bank levy, motor-related insurance tax and the Motor Vehicle Tax Act adopted

The government started its work last Friday with a veritable firework of measures to restructure the budget. In this  newsflash we would like to introduce you to the most important changes regarding the bank levy, motor-related insurance tax and Motor Vehicle Tax Act , as well as their impact on day-to-day business operations.

Changes to the motor related insurance tax

Removal of the tax exemption for electric vehicles: Until now, electric vehicles were exempt from motor-related insurance tax. This exemption will be lifted from 1 April 2025. In the future, only electrically powered mopeds will be exempt from tax.

• New regulation of tax calculation: The regulations for the tax calculation of motor-related insurance tax will be reorganized to improve clarity and comprehensibility. What is new is that, in addition to engine power, the vehicle's own weight will also have an important factor in the calculation of insurance tax in the future. The values entered in the registration certificate (kg and kW) are decisive for the calculation of the motor-related insurance tax. Fractions of kW and kg shall be rounded up to full kilowatts and kilograms. In practice, due to the weight-dependent calculation method for electric motors, problems will arise in individual cases, especially if there are different equipment lines for models whose weight differs significantly from each other and thus different threshold values are applied. Therefore, the final calculation can only be made at the time of delivery of the vehicle. The calculation is as follows:
  • For motorcycles (vehicle category L) whose output of the electric motor in kilowatts exceeds 4 kilowatts, EUR 0.50 per kilowatt of the power of the electric motor reduced by 5 kilowatts, 4 kilowatts is the minimum threshold.
  • For motor vehicles (vehicle category M; separate formula for motorhomes in § 6 para 1 no. 3 VStG.) per kilowatt of the power of the electric motor reduced by 45 kilowatts in kilowatts, 0.25 euros for the first 35 kilowatts, 0.35 euros for the next 25 kilowatts, and 0.45 euros for the kilowatts exceeding this (but at least 10 kilowatts are to be taken into account); and for each kilogram of the dead weight in kilograms reduced by 900 kilograms, 0.015 euros for the first 500 kilograms, for the next 700 kilograms, 0.030 euros, and for the kilograms exceeding this, 0.045 euros (but at least 200 kilograms must be assessed).
  • Adjustments have also been made for hybrid vehicles that have an electric motor in addition to a combustion engine. The motor-related insurance tax is now calculated exclusively on the output of the combustion engine. This means that the power of the electric motor is no longer considered when calculating the tax. The calculation logic is now regulated in § 6 para 1 no. 2 lit c VStG.

Entry into force: The amendments are to apply to the payment of insurance premiums due on or after 1 April 2025 and relating to insurance periods after 31 March 2025, with the following transitional provision being provided: the policyholder shall pay motor-related insurance tax payable on insurance premiums due before 1 October 2025 to which the new provisions have not been applied,  to the extent of the difference between the new and the old tax upon request to the insurer. The difference is to be paid by the insurer by 17 December 2025.   

Amendments to the Motor Vehicle Tax Act

Since the motor-related insurance tax is essentially a form of collection of motor vehicle tax, the changes to the motor-related insurance tax are also reflected in the Motor Vehicle Tax Act. The exemption for electrically powered motor vehicles will be limited to light motorcycles and those motor vehicles that are normally subject to motor vehicle tax.

New regulation of tax calculation: The tax calculation for electrically powered motor vehicles is based on engine power and dead weight, in the same way as the motor-related insurance tax.

Entry into force: The changes will also come into force on 1 April 2025.

Bank levy

The BSMG 2025 introduces massive special contributions with regard to the bank levy. It is envisaged that in the calendar years 2025 and 2026, for credit institutions a special payment will be due in addition to the existing current bank levy. The special payment amounts to

• exceeding an amount of EUR 300 million and not exceeding EUR 20 billion 0.050 %
• exceeding EUR 20 billion 0.061 %

The special payment for the year 2025 is to be paid by 31 October 2025. For the 2025 special payment, the due dates of Section 7 (2) StabAbgG apply. The existing thresholds for the bank levy are not to be applied to the calculation of the special payment. It should be noted that the special payment does not constitute a deductible business expense for CIT purposes.

In addition to the planned special payments for the years 2025 and 2026, the percentages for the current bank levy will also be increased.

In addition, the two limit will also be raised:

• First limit: The bank levy may not exceed 20% (new: 35%) of the annual profit/net loss plus the expenses for the bank levy and the special payment included in the annual profit/net loss for the year, and disregarding the extraordinary result from the provisioning/liquidation of the fund for general bank risks.
• Second limit: The bank levy may not exceed 50% (new: 65%) of the arithmetic average of the last three annual results determined for the first limit. For the calculation of the arithmetic mean, negative annual results are to be set at zero.

The regulations will come into force on 1 January 2025 and will apply for the first time to payments made for tax debts arising after 31 December 2024. Since the first payments for the year 2025 have already been made, the differences caused by the increase are to be paid as of 31 October.

Income tax:

 Extension of the top tax rate of 55% by 4 years until 2029

Value added tax:

Abolition of the zero VAT rate on PV systems

• As of April 1, 2025, the zero VAT rate for supplies, intra-Community acquisitions, imports and installations of photovoltaic modules will be abolished.
• For contracts concluded before 7 March 2025, the VAT zero VAT rate will apply until 31 December 2025.
• All requirements (e.g. delivery to the operator) for the zero VAT rate must be met regardless of the period of application (until 31 March 2025 or 31 December 2025).

Stamp Duty Act:

Increase of the stamp duty for betting from 2% to 5% of the stake, for stamp duty liability arising after March 31, 2025

Adjustments in the area of real estate transfer tax is not (yet) included in the BSMG 2025.

The new lawSMG introduces numerous changes and adjustments that are of great significance for practice. We recommend familiarizing yourself with the new regulations early on. As always, we are very happy to assist you with any questions