Higher tax liability for electric cars

Part of the recently presented climate agreement is the aim that, from 2025, only zero-emission (i.e. fully electric) passenger cars will be sold. Tax incentives will be phased out gradually in this regard.

Addition

This relates to the additional tax liability that must be calculated for the private use of a company car. This additional tax liability currently amounts to 22% of the car’s list price, unless the car is zero-emission. For a fully electric car, a reduction of 18% is granted on the first €50,000 of the list price. As a result, the additional tax liability on the first €50,000 of the list price is only 4%.

These additional tax rates apply to cars first registered in 2019. Different rates may apply to older cars.

Tax incentives

Once electric cars become commonplace, tax incentives will no longer be necessary. Under the Autobrief II, tax incentives for electric cars were due to end in 2021. The Climate Agreement has postponed this until 2026. The Climate Agreement sets out the following additional tax liability percentages:

Transitional arrangement

The Climate Agreement does not (yet) specify which transitional arrangement will apply. At present, a reduction in the additional tax liability percentage applies for the 60 months following the month in which the car is first registered. To find out whether this will also apply from 2020 onwards, we will have to wait for the draft legislation.

Purchase grant

The tax incentive for electric driving via the additional tax liability percentage applies exclusively to company cars. To make it (more) attractive for private individuals to switch to electric driving as well, a purchase subsidy is to be introduced. The details of this scheme have yet to be finalised. It goes without saying that this subsidy will also be phased out gradually between 2020 and 2026.