The two municipalities in Malaga province that act as 'tax havens' for cars

The data from the General-Directorate of Traffic (DGT) are very telling. There are two municipalities in Malaga province where the number of registered vehicles is skyrocketing. They are Montejaque and Macharaviaya. In the former, for 952 inhabitants there are a total of 14,034 passenger cars and over 21,100 vehicles. So, for every resident, there are more than 14 cars and 22.2 vehicles of all types, including passenger cars, motorbikes, mopeds, lorries and vans. Meanwhile, in Macharaviaya, for its 508 inhabitants, they have a fleet of 6,173 cars (13.2 per inhabitant) and about 7,770 vehicles in total (about 15.3 per capita).

To fully grasp the magnitude of these figures, it's important to bear in mind that in the Malaga town in third place for number of cars per inhabitant, Salares, there are only 1.16 cars per head and, when combining all vehicle types, there are just 1.79 per inhabitant. Beyond this, no town in Malaga province has more than one car per inhabitant. On average, across the province, there is half a car per person and 0.8 vehicles of any type per capita.

So why do Macharaviaya and Montejaque have such a concentration of cars and vehicles in general? They are, as explained in a report published this Thursday by the European association of motorists (AEA), "tax havens" for the vehicle tax (IVTM) payable in Spain.

This tax was created in Spain 35 years ago to replace the vehicle circulation tax (also known as 'el numerito') and generates annual revenues that the AEA estimates at around 3.9 billion euros for municipal coffers.

It is one of the three taxes that local councils are obliged to collect along with the property tax (IBI) and the tax on economic activities (IAE - a business tax on companies with a net turnover of over one million euros).

The IVTM rate varies according to the taxable horsepower of the vehicle for passenger cars, cylinder capacity for motorbikes and the weight and number of seats in the case of lorries and buses respectively. There is a minimum rate for the whole of Spain - with the exception of the Basque Country and Navarre - but the law allows local councils either to increase the rates at their discretion or to apply discounts of up to 75% depending on the type of fuel and engine power.

They can even exempt classic vehicles and vehicles over 25 years old from paying the tax altogether. "But it is this discretionary power of local councils that has made it possible to distort the purpose of the local tax system and that has led to the creation in Spain of real 'tax havens' in relation to the payment of a tax that 38 million taxpayers are obliged to pay," says the AEA report.

AEA's analysis takes the municipalities with the highest number of registered vehicles per inhabitant and compares the tax rates in those places with those of the capital of their province. Let's see what happens with these two in Malaga.

In Montejaque, for example, for the most common vehicles, mid-range utility vehicles (between 800 and 1199 taxable horsepower), the annual rate is 8.52 euros, while in Macharaviaya it is 43.01 euros, compared to 65.80 euros in Malaga city. In the case of medium-to-high-end passenger cars (between 1200 and 1599 taxable horsepower), in Montejaque the rate stays under 18 euros, in Macharaviaya it is 90.79 euros and in Malaga city it is 138.90 euros.

According to the AEA report, these two municipalities in Malaga are the only two 'tax havens' in Andalucía, along with the city of Jaén. The provinces with the cheapest IVTM are Madrid with 12 municipalities, Barcelona with three, Valencia and Alicante (two each) and Castellón, Palma de Mallorca, Zaragoza, Las Palmas, Ciudad Real and Tarragona with one apiece. The study also mentions the provincial capitals of Santa Cruz de Tenerife, Zamora, Palencia, Badajoz, Cáceres and Jaén.

Such are the figures for vehicles per inhabitant. However, the AEA report also provides information on how many were registered last year by companies.

Interestingly, Montejaque and Macharaviaya rank 13th and 14th respectively in Spain, with three cars per capita registered by companies in those two municipalities. That said, they are far behind La Hiruela (Madrid) with more than 50 and Las Rozas de Puerto Real (Madrid) with more than 40. The next Malaga municipality to appear in the ranking by volume of vehicles registered by companies in relation to its population is Riogordo, where 0.2 cars per capita were registered in 2024.

According to AEA's analysis, the rate reductions by certain local councils has led many rental and leasing companies to concentrate the registration of their fleets in small municipalities, where they have opened branches due to their favourable tax treatment. "In return, every year they win the lottery of the 'numerito' for the income they receive from the tax on vehicles that do not even circulate, nor will they ever circulate, in that town", states the report. AEA attributes the origin of this 'tax haven' phenomenon to the elimination of the provincial code on Spanish number plates, which dates back to September 2000. This, they explain, allowed owners of large vehicle fleets to concentrate the registration of their vehicles in municipalities with low taxation.

The data also show the vehicle tax rates by provincial capitals. How does Malaga compare with the other seven capitals of Andalucía? For mid-range vehicles (between 800 and 1199 taxable horsepower), the 65.80 euros charged in the Costa del Sol capital contrasts with the 51.12 euros charged in Jaen, the cheapest in Andalucía, while Granada and Huelva - the most expensive - charge 68.16 euros. That is the most expensive rate in Spain for this category and is also shared by Ciudad Real, Valladolid, Tarragona, Palma de Mallorca and Murcia. It is only exceeded by the Basque capitals that operate their own taxation system such as Bilbao (71.45 euros) and Vitoria (74.31 euros).

For medium-to-high-end cars (between 1200 and 1599hp), in Malaga city the annual fee payable is 138.90 euros, a figure that is exceeded by Granada and Huelva (both 143.88 euros) and Cadiz (142 euros), compared to 114.38 euros in Jaen as the cheapest in the region. The cheapest in Spain is Santa Cruz de Tenerife at less than 72 euros.

Overall, the AEA indicates that the most expensive city councils in Spain are the three Basque capitals, the four Catalan capitals, Ciudad Real, Salamanca, Valladolid, Huelva, Granada and Santander.