Diesel cars with engine performance of more than 80 kilowatt will face an additional 150 euro tax if they are not fitted with a particulate filter by July 1, 2005.
In 2006, the penalty rises to 300 euros.
Meanwhile, people who purchase diesel cars with the soot filter will get a 300 euro tax deduction.
Austria Finance Minister Karl-Heinz Grasser hopes this measure will quickly increase the number of cleaner diesel cars. The share of diesel-powered vehicles in Austria is 70 percent, but just 20 percent of newly registered diesel cars have a particle filter.
The Austrian dealer association fears that the penalty will have a negative effect on business.