Vehicle tax management: why is it important to formalize the transfer before the end of the year?

The last few days of the year are a good time to review some tax issues related to vehicle management, especially if you plan to sell one. One of the points that causes the most confusion is the responsibility for paying the Tax on Motor Vehicles (IVTM), commonly known as road tax.

Who pays road tax?

The IVTM is a municipal tax that accrues on January 1 each year. This date is decisive, as the person listed as the owner of the vehicle on January 1 will receive the tax bill, even if the vehicle has been sold subsequently.

At the time of the transaction, the parties may agree on who will ultimately bear the cost, but the formal obligation to the local council will always fall on the owner registered on that date.

What can happen if I sell the vehicle at the beginning of the year?

If you plan to sell a vehicle, but the transfer is not officially registered before December 31, you will still be listed as the owner on January 1. As a result, you will receive the direct debit or tax notification and will have to pay it, even if the vehicle is no longer yours when you receive the bill.

This situation is common and can lead to misunderstandings between the seller and the buyer, especially if it has not been agreed in advance who will bear this cost.

How to avoid problems? Practical advice

To avoid unwanted situations, we recommend:

Formalizing the transfer before December 31, ensuring that it is registered electronically or in person with the DGT or the competent authority.

Keep the receipts for the transfer or deregistration of the vehicle.

Inform the buyer of the importance of completing the paperwork quickly, especially if the transaction takes place at the end of the year.

Check the status of the vehicle in the registry to verify that the change of ownership has been completed or check the vehicle registration certificate in the name of the new owner from the date of sale.

If the sale takes place in the last few days of December and it is not possible to process the change before January, put the agreement on the payment of tax in writing to avoid future conflicts.

If you do not use the vehicle, do not want to pay the tax, but do not want to sell it either, consider temporary deregistration before the end of the year.

The tax management of vehicles is an often overlooked aspect, but it is essential to avoid unexpected costs. If you plan to sell a vehicle at this time of year, get ahead of the game and formalize the transfer before the end of the year: it will save you time, money, and possible misunderstandings.

Contact our team of managers who specialize in this procedure and we will assist you in making the transfer of your vehicle simple and efficient.