Tax advantages for e-cars and hybrids as company cars – benefit from 0.25% & 0.5% taxation

The coalition agreement has now been followed by a draft law that provides for higher depreciation for e-cars. The contents of company car taxation for e-cars at least give companies hope. We'll tell you what you need to know and how much you'll save if you opt for an electric car or a plug-in hybrid as your company car.

In order for you to benefit from the favourable taxation of electric cars, the vehicle must currently not cost more than 70,000 euros. We have put together some cheap e-cars for you:

 

Draft law: This should apply to e-cars as company cars

The new black-red government is working on a draft law on the depreciation of e-cars of companies.

These two measures – relevant for company cars – are planned:

• Tax relief for company cars: Gross price limit for tax incentives for e-cars as company cars will be raised from the current 70,000 to 100,000 euros.
• Special depreciation for e-vehicles: Declining depreciation is provided. This starts with a depreciation rate of 75 percent. The depreciation period is 6 years.

You can also find the latest developments on tax advantages for e-cars in our news.

Tax advantages for e-cars as company cars: This will apply in 2025

Since 18.12.2023, there has been no more funding for e-cars. However, the company car privilege remains in place!

The use of an electric car as a company car has been even more attractive since January 1, 2020, because the assessment basis for taxation has been halved again - from 0.5 to 0.25 percent.

 

Growth Opportunities Act passed: List price for company e-cars increased to €70,000

On 22 March 2024, the Bundesrat approved the Growth Opportunities Act. Accordingly, you can now pay tax on a privately used company electric car with a list price of up to €70,000 at the reduced tax rate of 0.25 percent. This means that the price has been raised by €10,000.

The regulation applies retroactively to January 1, 2024. For vehicles that are more expensive, a reduced tax rate of 0.5 percent can also be credited if the car was purchased after December 31, 2023.

There is currently no new regulation for hybrids. The reduced tax rate of o.5 may still be used if the plug-in hybrid either emits a maximum of 50 grams of CO2 per kilometre or drives at least 80 kilometres purely electrically.

 

Taxation of electric cars as company cars

If a company car is also used for private trips, this must be declared as a non-cash benefit in the tax return. When taxing a company car, a lump sum can be taxed on the basis of the 1 percent rule, or you can keep a logbook. The advantage of a logbook is that the exact costs can be calculated, which is especially useful if the company car is rarely used privately.

Ungeachtet dessen, dass der Umweltbonus für Elektroautos und Hybride ausgelaufen ist, bleibt der Steuervorteil für E-Autos bestehen. Es gibt neben den Benziner-Hybriden auch Diesel-Hybrid-Modelle, allerdings werden hiervon deutlich weniger angeboten – unter anderem wegen den höheren Produktionskosten.

0,5 und 0,25 Prozent Regelung für Elektroautos

Wer sich für ein Elektro- oder Hybridauto als Firmenwagen entscheidet, der kann von steuerlichen Vorteilen profitieren. Denn statt einem Prozent vom Bruttolistenpreis werden für Elektroautos bis zu einem Kaufpreis von 70.000 Euro nur 0,25 Prozent angerechnet, die versteuert werden müssen. Ist der Bruttolistenpreis des Elektroautos höher, gibt es immer noch eine Vergünstigung. 0,5 Prozent sind es in diesem Fall. Die Versteuerung eines Dienstwagens mit Elektroantrieb soll in diesem Rahmen bis 2030 gewährleistet sein.

 

Was ist die Viertel-Regelung?

The quarter rule is the basis for calculating the taxable amount when using an electric company car. In the case of a combustion engine as a company car, one percent of the gross list price must be declared as a non-cash benefit on the tax return. Since 2020, only 0.25 percent have to be claimed for an electric company car up to 70,000 euros, i.e. only a quarter of the amount that is set for combustion engines - hence: quarter rule.

Calculation example: 0.25 percent regulation for company cars

The gross list price of the new vehicle is always used as the basis for calculating the tax burden to be calculated, regardless of whether the vehicle was purchased as a new car or not. Let's try to illustrate how the calculation works with an example:

Purchase of a VW ID.3, Pure, 150 hp for a gross list price of €31,495

0.25% of €31,495 = taxable non-cash benefit €78.74 per month and accordingly €944.88 per year.

If we assume an average tax rate of 40 percent, the ID.3 would cost €378 annually in taxes for private use as a company car.

Electric company car: taxation of the commute to work

In addition to the non-cash benefit, further taxation is also due if the e-car company car is also used for commuting. This is called mileage taxation and is due additionally – but electric and hybrid cars also have an advantage here.

Usually, 0.03 percent of the gross list price per kilometer of one-way travel is incurred. In the case of electric vehicles, only a quarter of the assessment basis is taxed here, while in the case of hybrids it is 0.5 percent. This makes the tax advantage for hybrids and electric cars even more attractive.

Taxation of hybrid company cars in 2024 and 2025

Plug-in hybrids also benefit from discounted taxation if you use the vehicle as a company car.

How long does the 0.5 percent rule for hybrids apply?

When taxing a hybrid company car, 0.5 percent is always applied, regardless of the purchase price. The 0.5 percent rule for hybrid company cars will also apply in 2025 and beyond until 2030. However, hybrid cars must meet the following requirements in order to benefit from the tax advantages:

• Externally rechargeable (i.e. plug-in hybrids only)
• No more than 50 grams of CO2 emissions per km OR electric. Range at least 60 km
• From 2025 at least 80 km

The legislator speaks of the "acquisition", not a "new registration". This means that the tax rate is also reduced if it is a used electric vehicle. However, since the tax advantage has only been in effect since 2019, the employee only benefits if the vehicle was only used as a company car this year. If the car has already been used as a company car in 2018, the normal 1 percent rule comes into force.

The alternative range of at least 80 kilometres from 2025 could soon be abolished, as the Federal Council approved the Growth Opportunities Act on 22 March. Then, from 2025, a hybrid would only be eligible for subsidies if it emits less than 50 grams of CO2 per kilometer.

As mentioned, the regulation for the tax relief will initially apply until the end of 2030. Full or mild hybrids do not receive any advantages.

Calculation example for hybrids

As an example, let's say you decide to buy a Toyota Prius in the standard configuration as a plug-in hybrid. This model has a purely electric range of 86 kilometres, which would also already meet the requirements for 2025. The gross list price is 45,290 euros.

0.5% of €45,290 = taxable non-cash benefit €226.45 per monthand accordingly €2,717.40 per year.

If we assume an average tax rate of 40 percent here as well, the Prius would cost €1,087 in taxes annually for private use as a company car.

Funding for wallboxes for private individuals?

Anyone hoping for state funding for their privately used wallbox is currently still disappointed. At the moment, there are no plans for a new wallbox subsidy.

Charging a company car at home: Use a tax-free lump sum

Whether with or without subsidies, you will inevitably have to charge your company car at home. To ensure that billing works smoothly, there are the following options:

• Wallbox with separate electricity meter
• Installing the intermediate meter
• Wallbox with RFID chip
• Tax-free lump sum

The latter is certainly the easiest way to bill the electricity costs. If a free charging option is possible on the company premises, or a charging card is provided, then only 30 euros per month for e-cars and 15 euros for plug-in hybrids are tax-free.

If there is no charging facility at the employer, the tax-free amount increases to 70 euros per month for electric vehicles and 35 euros for plug-in hybrids.

FAQs on the topic of company car taxation for e-cars

If you still have questions about company car taxation, here are a few more answers.

Which vehicles are taxed at 0.25?

If you also use a company car privately and it cost no more than 70,000 euros, you only have to pay tax on 0.25 percent of the gross list price per month as a non-cash benefit.

Is the purchase price the gross list price?

No, the purchase price does not necessarily have to be the gross list price. Purchase prices may have been influenced by promotions or discounts and may therefore be cheaper than the actual gross list price. The gross list price is the manufacturer's recommended list price, including standard optional equipment.

When does the 0.25 rule apply?

If the gross list price of a car does not exceed 70,000 euros, then the 0.25 percent rule applies. If the gross list price is higher, only 0.5 percent is taxed.