Escorca has been identified as a tax haven for vehicles according to a recent study by the Drivers' Association Automovilitas Europeos Asociados (AEA). The report highlights the significant variations in the Motor Vehicle Tax applied across municipalities in Spain.
In 2025, Escorca registered 3,960 passenger cars despite having a resident population of only 199, resulting in an extraordinary ratio of 19.89 vehicles per inhabitant. This discrepancy is linked to several local councils applying rebates on the motor vehicle tax, making them particularly attractive for vehicle registration.
The AEA's analysis reveals up to a 700% difference between the lowest and highest motor vehicle tax payments in various municipalities. This tax is calculated based on the vehicle's fiscal horsepower for cars, engine capacity for motorcycles, and weight and seating capacity for trucks and buses. However, local councils have the legal discretion to increase rates up to twice the minimum tariff, offer discounts up to 75% depending on fuel type and engine features, or fully exempt certain vehicles.
"This discretionary power of councils has distorted the purpose of the local tax system," the association states, "resulting in actual 'tax havens' within Spain, with Escorca as a prime example."
The report also flags that many rental and leasing companies concentrate the registration of their fleets in small municipalities where branches have been established to take advantage of favourable tax conditions. "Each year, these towns hit the jackpot with the income from vehicles that neither circulate nor ever will through those areas," AEA explains. This phenomenon began in earnest after the removal of provincial identifiers from Spanish number plates in September 2000, which allowed the owners of large fleets to register vehicles in municipalities with lower tax burdens.
Spain’s main vehicle tax havens
The study lists key tax havens including several towns in Madrid such as Moralzarzal, Venturada, Navacerrada, Las Rozas de Puerto Real, Robledo de Chavela, Brunete, Collado Mediano and Patones; plus Finestrat in Alicante and Tejeda in Gran Canaria. These municipalities, with populations ranging from 600 to 15,000, hold 35% of Spain's corporate car registrations — 244,921 vehicles out of a national total of 694,559.
Remarkably, 25 Spanish councils have more vehicles per capita than the United States or Japan. For example, La Hiruela in Madrid, with only 88 inhabitants, has 69 vehicles per inhabitant.
Collection period in the Balearics
In the Balearics, the motor vehicle tax is payable from March to May. The councils across the islands plan to collect around €86 million this year, from over 1,174,000 motorists who own any kind of motor vehicle.