Tax advantages for electric company cars

The following is a brief overview of the #tax #benefits in the area of electric vehicles:

Advantages for employees

Free or reduced-price charging of the batteries of electric or hybrid electric vehicles at the employer’s premises is tax-exempt according to § 3 no. 46 EStG (German income tax act) if the employer grants the benefit in addition to the salary owed anyway.

The tax exemption for charging private electric vehicles or hybrid electric vehicles of the employee at the employer’s premises is not limited. Accordingly, charging at any fixed business facility of the employer or a company affiliated with the employer is eligible.

If the employee also refuels at home, please note the following:

Tax-free, the employer may receive the following amounts:

Monthly flat rate for additional charging facility at the employer’s premises:

– 30 euros per month for electric vehicles,

– 15 euros per month for hybrid electric vehicles.

Monthly flat rate without additional charging facility at the employer’s premises:

– 70 euros per month for electric vehicles,

– 35 euros per month for hybrid electric vehicles.

Provision of charging device

Benefits granted by the employer for the company charging device for electric vehicles or hybrid electric vehicles temporarily provided for private use are tax-exempt. However, non-cash benefits from the transfer (gift) of a charging device as well as for contributions to the employee’s expenses for the acquisition and use of a charging device are taxable at a flat rate of 25 per cent (section 40, paragraph 2, sentence 1, no. 6 EStG). The flat-rate taxation is only applicable if the benefits are provided in addition to the remuneration owed anyway.

The assessment basis for calculating the private use of electric and hybrid vehicles under the simplified so-called 1% rule is reduced under certain conditions compared to the assessment basis for normal vehicles.

Advantages for employers:

Section 7c EStG introduced a provision for the special depreciation of new electric utility vehicles as well as electrically powered cargo bicycles of fixed assets. In the year of acquisition, in addition to straight-line depreciation under section 7(1) EStG, special depreciation amounting to 50% of the acquisition costs can be claimed (section 7c(1) EStG). If the assessment basis for the special depreciation (= acquisition costs) is subsequently reduced, this must be taken into account when determining the special depreciation.

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