The official confirmed the elimination of internal taxes for cars costing between $41 million and $75 million, which previously paid a 20% rate. Considering a dealer margin including taxes of 12%, a car with a final price of approximately $77,600,000 would be exempt from internal taxes. "The table states that automobiles with a price lower than $57,251,826.92 off the factory floor without VAT are exempt from internal taxes," emphasized Domínguez.
In the official's words, "if the price is equal to or higher than that value, the tax is 18%." According to Domínguez, "the elimination of the 20% internal taxes results in an effective reduction of 25%; and the decrease in the rate from 35% to 18% represents an effective reduction from 53.85% to 21.96%."
These changes in internal taxes are "temporary" and will remain in effect until June 2027. Additionally, the rate for cars over $75 million has been reduced from 35% to 18%. Sebastián Domínguez, CEO of SDC Tax Advisors, explained that the reduction is greater than the nominal percentage of the rate because the internal tax is applied to its own amount.
The tax reduction has led some automakers to announce a price decrease for their cars, effective from February. Other dealerships are awaiting the formal implementation of the change to adjust their suggested retail prices, which would impact dealerships for at least a month.
The Minister of Economy detailed that a fall in vehicle sale prices between 15% and 20% is expected with these tax modifications that apply to cars and motorcycles. The government estimates that this measure will contribute to the development of the vehicle market by lowering public sale prices.
