Germany wants to halve BIK on EVs and PHEVs
To promote the sales of low-emission vehicles, the Bundesregierung wants to cut the tax on private use of electric and plug-in hybrid company cars by 50 percent. In practice, that means the so-called Dienstwagensteuer would drop to 0.5 percent of the list price starting in 2019. Or, to put it differently, benefit in kind (BIK) will amount to 1 percent of half the list price.
The new 0.5-percent rule for EVs and PHEVs should not apply retroactively, but only for cars with initial registration between 1 January 2019 and 31 December 2021.
How much difference?
Today, the Benefit in Kind is calculated on the basis of the battery size. For electric cars and plug-in hybrids, you can deduct €250 per kWh from the gross list price – with a maximum of €7,500. The monthly Benefit in Kind amounts to 1 percent of the result.
For a car that costs €36,000 and has a battery capacity of 26 kWh, the calculation results in €296 per month (see below). Under the new rule, the BIK would drop to just €180. At a personal tax income rate of 35 percent, the employee would only pay €63 net.
Example:
2018 | |
Gross list price | € 36.000 |
Battery capacity | 26 kWh |
Discount (250 x 26) | € 6.500 |
Calculation basis | € 29.500 |
Monthly BIK | € 295 |
Monthly net cost at 35% tax rate | € 103,25 |
2019-2021 | |
Gross list price | € 36.000 |
Calculation basis 50% | € 18.000 |
Monthly BIK | € 180 |
Monthly net cost at 35% tax rate | € 63 |
Especially PHEVs to benefit
Today, plug-in hybrids offer little advantage over regular diesel and petrol vehicles from a BIK point of view because of their relatively small batteries. With just 10-odd kWh times €250 to deduct from the list price, they are only €25 per month cheaper. At a 35-percent personal income tax rate, that translates to a net advantage of not even €9 per month.
If the 0.5 percent-rule is implemented, a 10-kWh €36.000-plug-in hybrid would represent a gross benefit in kind of €180, or €63 in ‘real’ money, instead of €335 and €117.25, respectively. The net result for the company car driver would be a saving of €54.25 per month.
The fleet association (Fuhrparkverband) welcomes the tax benefit for e-cars. However, Managing Director Axel Schäfer calls for all alternative drives to be promoted. He reckons subsidies should not be one-sided, but favour all alternatives which reduce emissions.
Source: Auto, Motor & Sport