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Company electric cars to be taxed at a lower rate

According to information from the news platform Spiegel, the federal government plans to reduce the monetary advantage for electric or plug-in hybrid company cars to 0.5 percent.

Electrified company cars could be taxed more favorably in the future, while no financial incentives are planned for company bicycles. | Photo: G. Soller
Electrified company cars could be taxed more favorably in the future, while no financial incentives are planned for company bicycles. | Photo: G. Soller
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The one-percent rule for electrified company cars could soon become a 0.5-percent rule. According to information from Spiegel, the federal cabinet plans to provide tax relief for users of electrified company cars. It is still controversial whether the benefit will be temporary or permanent - and whether the states will agree. Users of company cars would then have to pay only half as much tax and social security contributions for private use of company cars as before. So far, all company cars are taxed monthly at one percent of the list price. Since electric and plug-in hybrid vehicles are often more expensive, this often impacts the costs: In order for more cars with environmentally friendly drives to be used in company fleets and authorities, only half the list price will apply in the future. The federal cabinet intends to pass the new regulation on August 1, 2018, according to Spiegel. It will cost the treasury around 1.8 billion euros for the years 2019 to 2021. It is still unclear whether the measure will be limited to this period. The Verkehrsclub Deutschland calls for the halving of the monetary benefit to be extended to company bicycles as well, which is not currently planned.

What does that mean?

Promoting (still expensive) electrified vehicles through tax incentives is a correct approach. Even more correct would be extending tax benefits to other types of vehicles as well.

 

Translated automatically from German.
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