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Tax incentives for electromobility

4 years ago

Climate change is one of the most important topics currently being discussed in politics, society and business. Many companies see opportunities in the use of electromobility. Anyone who provides e-cars or e-bikes in their business can take advantage of tax incentive measures.

Electric vehicles are also becoming increasingly popular with companies. In this way, they can make a contribution to environmental protection and at the same time benefit from tax breaks. Some tax relief options are briefly presented here:

Exemption from motor vehicle tax

The holding of electric vehicles is exempt from motor vehicle tax according to § 3d KraftStG. However, this tax exemption is only granted for the first registration of the electric vehicle in the period from 18 May 2011 to 31 December 2025 for ten years from the date of first registration, but no later than 31 December 2030.

Note: When purchasing or leasing electric vehicles, companies can also benefit from environmental bonuses . This can also play a major role in financing.

Company cars and company bicycles

Providing company cars is often a popular way to offer the employee an additional bonus. And more and more companies are switching to electric vehicles. Why is this so popular?

Electric vehicles will be relieved of income tax under certain conditions. Employers, for example, can enable their employees to charge electrically at their charging facility tax-free. This means that employees can not only use the electric vehicle, but even charge it free of charge. In addition, employees benefit from the fact that tax relief is granted for the private use of electric vehicles through a reduction in the tax base.

Anyone who transfers a charging device to their employee can tax this so-called non-cash benefit at a flat rate of 25 percent. This is often much cheaper than “normal” taxation with the individual tax rate. E-bikes that are not classified as motor vehicles under traffic law can be made available tax-free according to Section 3 No. 37 of the Income Tax Act. And anyone who transfers the e-bike to their employee can pay a flat rate of 25 percent for this non-cash benefit.

Draft of a comprehensive letter from the Federal Ministry of Finance

A comprehensive BMF letter on the use of electric and hybrid electric vehicles is currently being coordinated. The draft letter was published on June 17, 2021. Associations currently have the opportunity to take a stand. The letter takes up in detail,

which vehicles are subsidized,
how the private utility value is determined in the case of the 1% rule or the logbook method,
which cost cap must be observed and
how companies can claim electricity costs as operating expenses.

Why electromobility is an accounting issue

The accounting department should deal with the topic of electromobility. The topic is not exactly simple. There are many tax peculiarities to consider, especially when booking company car taxation, for example. The topic is also still affected by many changes. Depending on the result of the 2021 Bundestag election, it is to be expected that new or amended measures will be launched promptly when it comes to electromobility. Those who are not familiar with this and risk errors in accounting do not make optimal use of tax incentives and may bear a higher tax burden.

Image Credit: Unsplash, Photographer: Tommy Krombacher