Company cars and taxation

Company cars and taxation

From 2024, the tax rules for plug-in hybrid and electric company cars will change. Currently, both types of vehicle benefit from a 100% tax deduction. This means that companies can fully deduct the costs associated with purchasing or leasing these cars.

However, this advantageous situation for plug-in hybrids is coming to an end. From 2025 onwards, the tax deductibility for plug-in hybrid cars will start to decline gradually: it will be 75% in 2025, 50% in 2026, 25% in 2027, and will reach 0% in 2028. This means that the additional tax costs for companies will increase each year, making plug-in hybrids less and less attractive from a tax point of view.

On the other hand, electric cars purchased or leased in 2024 will remain 100% tax-deductible throughout their useful life, provided they are purchased before the end of 2026. This offers stability and a significant financial advantage over the long term. However, from 2027, the tax deduction for new electric cars will also be gradually reduced: 95% in 2027, 90% in 2028, 82.5% in 2029, 75% in 2030, and 67.5% from 2031.

The CO2 contribution will apply when the employee uses the car for private purposes, such as commuting. For fossil-fuelled cars acquired after 30 June 2023, this contribution will be multiplied by 2.25, significantly increasing costs. Plug-in hybrids and electric cars, on the other hand, will continue to benefit from the minimum contribution, making them fiscally more attractive for private journeys.

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