Electric vehicle (EV) adoption has been rapidly growing throughout Europe, driven by both legislative mandates and the increasing urgency of climate change. The European Union (EU) and EFTA member states have implemented a wide array of tax benefits, incentives, and financial support schemes aimed at accelerating the shift towards zero-emission vehicles. In 2024, these policies continue to evolve, reflecting each nation’s individual priorities and approaches to sustainability. This article provides an exhaustive examination of tax benefits and incentives related to electric vehicles (EVs) in the 27 EU member states and the four EFTA member states, alongside the UK, taking into account the most up-to-date information available in 2024.
The policies vary significantly across the continent, with a strong focus on battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). Some nations have also rolled out incentives for fuel cell electric vehicles (FCEVs), especially in regions with an interest in hydrogen energy. However, the fundamental aim across all states is the same: reduce carbon emissions and make EVs more accessible to consumers and businesses.
Austria continues to offer a compelling package of tax benefits for zero-emission vehicles. Business owners can benefit from VAT deductions and exemptions on BEVs and FCEVs, with thresholds that reflect the vehicle’s purchase price. Full VAT deductions apply to vehicles costing less than €40,000, while vehicles valued between €40,000 and €80,000 are eligible for partial deductions. Additionally, all zero-emission vehicles are exempt from both ownership tax and pollution tax, offering considerable financial savings for businesses. For company cars, Austria provides a tax incentive amounting to 15% of the purchase price, with further exemptions from pollution tax for private use of zero-emission company cars, including the electricity used for charging.
Austria also offers direct financial support to private individuals purchasing new zero-emission vehicles. For BEVs and FCEVs with a fully electric range of at least 60km and a gross list price of €60,000 or less, buyers can receive a bonus of €2,000 from the federal government, in addition to a €3,000 importer bonus, available until the end of 2024. Provinces and local communities often provide additional incentives. Infrastructure development is strongly encouraged, with bonuses available for the installation of intelligent charging cables and wallboxes for private use. For example, a grant of €600 is offered for intelligent loading cables and wallboxes in single-family homes, with even larger grants available for multi-family housing complexes.
In Belgium, electric vehicle incentives are primarily driven by the regions, with Brussels, Wallonia, and Flanders each offering distinct tax benefits. In Brussels and Wallonia, BEVs and FCEVs benefit from the minimum tax rate of €61.50, while in Flanders, these vehicles are completely exempt. Similarly, for ownership tax, both Brussels and Wallonia impose a minimum rate of €97.68 annually, while Flanders exempts BEVs and FCEVs from this tax. Corporate users of EVs in Belgium also enjoy substantial benefits, including the maximum deductibility of 100% for company cars. The government has introduced a minimal annual benefit-in-kind tax for these vehicles, set at 4% of the list value.
For private buyers in Flanders, a premium of €5,000 is available for the purchase of a new zero-emission car, as long as the vehicle’s price does not exceed €40,000, including VAT. Additionally, used zero-emission vehicles at least three years old and priced below €60,000 are eligible for a grant of €3,000. Charging infrastructure is also incentivized, with some municipalities in Flanders offering subsidies for installation. In Brussels, companies are exempt from the parking tax if they provide charging stations. Tax deductions of up to 150% are available for companies installing charging infrastructure accessible to the public, while private individuals can receive a 15% tax reduction for installing a charger, with a cap of €1,750 for monodirectional chargers and €8,000 for bidirectional systems.
In Croatia, no excise duties are imposed on electric vehicles, and buyers are exempt from the special environmental tax. The country also runs an annual incentive scheme with limited funds, offering €9,000 for BEVs and €5,000 for PHEVs. These incentives are available until the end of 2024, with the condition that vehicles are kept for at least two years and cost no more than €50,000.
Cyprus provides tax benefits for vehicles emitting less than 120g CO2/km. The government offers up to €12,000 for scrapping and replacing a vehicle emitting less than 50g CO2/km, with the new vehicle’s price capped at €80,000. Buyers can also receive up to €19,000 for the purchase of a new BEV priced at or below €80,000, along with a €1,000 grant for scrapping their used vehicle.
In Denmark, zero-emission vehicles benefit from a range of tax reductions. They pay only 40% of the registration tax, while low-emission vehicles emitting less than 50g CO2/km pay 55%. Additional tax deductions include DKK 165,500 for BEVs, along with a deduction of DKK 500 per kWh of battery capacity, capped at 45 kWh. Ownership taxes are determined by CO2 emissions, with zero-emission vehicles paying a minimum semi-annual tax rate of DKK 390. Moreover, for company cars, the installation of a charging outlet at the employee’s residence is not taxed, offering further savings for businesses.
Estonia offers incentives for new BEVs and FCEVs, providing €5,000 per vehicle for individuals and €4,000 per vehicle for legal entities, covering both purchases and leasing options. This scheme is designed to encourage a broader uptake of electric vehicles across the country.
In Finland, zero-emission passenger cars have been exempt from registration taxes since October 2021. A tax deduction of €170 per month applies to BEVs from 2021 to 2025, with a reduced deduction of €85 per month for cars emitting between 1-100g CO2/km from 2022 to 2025. Charging at workplaces is also exempt from income tax during the same period.
France offers a mix of national and regional incentives. Regions may grant either total or 50% exemptions from registration taxes for alternatively powered vehicles, including BEVs, HEVs, and PHEVs. BEVs, FCEVs, and PHEVs with a range exceeding 50km are also exempt from the mass-based malus, which is a penalty tax applied to heavier vehicles. Furthermore, EVs emitting less than 60g CO2/km are exempt from the CO2-based ‘TVS’ tax component.
The French government offers a bonus for new BEVs or FCEVs priced under €47,000 and weighing less than 2.4 tonnes. For low-income households, this bonus is €7,000, while for other households, it is €4,000. A scrappage scheme offers up to €5,000 for low-income households trading in an older vehicle for a new BEV or FCEV, with smaller bonuses available for others. These incentives, combined with the recent French push for the green transition, are designed to significantly reduce the total cost of ownership for EVs.
In Germany, a 10-year exemption from ownership tax is granted to BEVs and FCEVs registered before the end of 2025, lasting until 2030 at the latest. Additionally, vehicles emitting less than 95g CO2/km benefit from exemptions from the annual circulation tax. The government has also reduced the taxable amount for company cars, with BEVs and PHEVs attracting significantly lower taxes depending on their list price, though additional restrictions apply to PHEVs.
Germany’s purchase subsidy scheme, which provided substantial financial incentives for BEVs and PHEVs, has officially ended as of 31 December 2023. However, future programs may be introduced as the country continues to focus on decarbonizing the transport sector.
In Greece, buyers of PHEVs with emissions below 50g CO2/km benefit from a 75% reduction in the registration tax, while BEVs and PHEVs are exempt from the personal income presumption system. A variety of cashbacks are available, including up to €8,000 for BEVs and €17,500 for battery-electric taxis, with additional bonuses for scrapping older vehicles.
Hungary exempts BEVs and PHEVs from acquisition and ownership taxes, and since June 2020, the government has offered a purchase incentive of €7,350 for EVs priced up to €32,000, with a smaller incentive of €1,500 available for cars priced between €32,000 and €44,000.
In Ireland, there is a relief of up to €5,000 for BEVs costing up to €40,000, which gradually decreases for vehicles priced between €40,000 and €50,000. BEVs are also exempt from NOx tax, and reduced ownership tax rates apply for PHEVs emitting less than 50g CO2/km.
Each country within the EU and EFTA has taken a unique approach to promoting electric vehicle adoption, but common themes such as tax exemptions, direct purchase incentives, and subsidies for charging infrastructure emerge across the board. These initiatives have played a critical role in driving the adoption of cleaner, more sustainable vehicles and reducing the overall carbon footprint of transportation in Europe.
The shift toward electric vehicles across Europe has been met with enthusiasm from both consumers and businesses, buoyed by government support. However, the true test of these programs will be how they adapt and expand to meet the growing demand for zero-emission transportation and infrastructure over the coming years. With the increasing number of electric vehicles on the road, the next phase will involve scaling charging networks, developing green energy sources to power these vehicles, and continuing to provide financial incentives that make EVs more accessible to a wider population.
TAX BENEFITS AND INCENTIVES – Electric cars | 27 EU member states (2024)
- There are no purchase incentives available in six member states:
- Belgium
- Bulgaria
- Denmark
- Finland
- Latvia
- Slovakia
- BEV Battery electric vehicle
- M1 assenger car
- PHEV Plug-in hybrid electric vehicle
- NEDC New European Driving Cycle
- HEV Hybrid electric vehicle
- WLTP Worldwide Harmonised Light Vehicle Test Procedure
- FCEV Fuel cell electric vehicle (hydrogen)
- EREV Extended-range electric vehicle
- X No benefit or incentive
| Country | Tax Benefits – Acquisition | Tax Benefits – Ownership | Tax Benefits – Company Cars | Incentives – Purchase | Incentives – Infrastructure |
|---|---|---|---|---|---|
| Austria | VAT deduction for zero-emission cars: full deduction up to €40,000; partial between €40,000-€80,000; none > €80,000 | Exempt from ownership and pollution tax for zero-emission cars | Exempt from taxation for private use of zero-emission company cars and charging electricity. | Bonus (until the end of 2024) for the purchase of new cars (private use) with a fully electric range of ≥ 60km and gross list price of ≤ €60,000: €2,000 + €3,000 (importer bonus and federal bonus) for BEVs and FCEVs. Additional incentives are granted by provinces and communities. More details: www.umweltfoerderung.at. | Bonus for private loading infrastructure (e.g., €600 for cables, €900-€1,800 for wallboxes). Additional incentives available by region. More details: umweltfoerderung.at |
| Belgium | Brussels and Wallonia: minimum tax for BEVs/FCEVs (€61.50); Flanders: exempt for BEVs/FCEVs | Minimum rates for BEVs/FCEVs in Brussels and Wallonia (€97.68/year); Flanders: exempt | Max deductibility (100%) for BEVs/FCEVs; minimal benefit in kind (4% list value); PHEVs partially included | Flanders: €5,000 premium in 2024 for a new zero- emission car purchased by a natural person, a non-profit organisation, or a vehicle sharing platform, with a price cap of €40,000 (including VAT). Used zero-emission vehicles of at least three years old and with a list price below €60,000 can also benefit from this grant, with an amount of €3,000. | Private owners: 15% tax reduction on charger installation up to €1,750 (monodirectional) or €8,000 (bidirectional). Municipalities offer additional support. |
| Bulgaria | Tax exemption for electric vehicles. | N/A | N/A | N/A | N/A |
| Croatia | No excise duties for electric vehicles | Exempt from environmental tax for electric vehicles | N/A | Incentive scheme (once a year, limited funds): €9,000 for BEVs €5,000 for PHEVs The purchase deadline is 31 December 2024. The vehicle must be kept for at least two years and cost ≤ €50,000. | N/A |
| Cyprus | Exemption for vehicles emitting ≤ 120g CO2/km | Minimum rate for vehicles emitting ≤ 120g CO2/km | N/A | Up to €12,000 to scrap and replace a vehicle emitting < 50g CO2/km and costing ≤ €80,000. Up to €19,000 to buy a BEV (≤ €80,000) and €1,000 to scrap a used car. | N/A |
| Czechia | Exemption for BEVs/FCEVs emitting ≤ 50g CO2/km from registration fees | BEVs, PHEVs, and FCEVs are exempt from road tax. Road toll: BEVs exempt PHEVs emitting ≤ 50g CO2/km pay 25% Reduced depreciation period for electric vehicle charging stations from 10 to five years (wallboxes and standalone charging stations). Accelerated depreciation for BEVs and FCEVs. | Tax reduction (0.25-1%) for BEVs and 0.5% for PHEVs | Purchase incentives for low- and zero-emission vehicles for state and local government bodies. Guaranteed discounted loans on BEVs, FCEVs, and charging stations for corporate persons with a budget of CZK 1.95bn. | Support for development of charging and hydrogen refilling infrastructure: CZK 6bn total from Ministry of Transport |
| Denmark | Zero-emission vehicles: Pay 40% of the registration tax Additional DKK 165,500 registration tax deduction DKK 500 deduction of taxable value per kWh battery capacity (maximum 45 kWh) Low-emission vehicles (emitting < 50g CO2/km): 55% of the registration tax Additional DKK 46,250 registration tax deduction DKK 500 deduction of taxable value per kWh battery capacity (maximum 45 kWh | Ownership taxes are based on CO2 emissions. Zero-emission cars and cars with CO2 emissions of maximum 58g/km pay the minimum semi-annual tax rate of DKK 390. | The value of a charging stand/outlet provided together with the company car (at the employee’s residence) is not taxed. | N/A | N/A |
| Estonia | N/A | N/A | N/A | New BEVs and FCEVs (purchase and leasing): €5,000/vehicle for individuals €4,000/vehicle for legal persons | N/A |
| Finland | BEVs exempt from registration tax since October 2021 | N/A | €170 monthly tax deduction for BEVs (2021-2025), €85/month for low-emission vehicles | N/A | N/A |
| France | Regional exemption for alternatively powered vehicles (e.g., BEVs, HEVs); BEVs/PHEVs exempt from mass-based mRegions provide an exemption (either total or 50%) for alternatively powered vehicles (ie electric, HEVs, CNG, LPG, and E85). BEVs, FCEVs, and PHEVs (with a range of > 50km) are exempt from the mass-based malus. | CO2-based tax exemption for vehicles emitting <60g CO2/km | Bonus for BEVs/FCEVs ≤ €47,000: €7,000 (low-income households), €4,000 for others | Bonus for a new BEV or FCEV eligible for the minimum environmental score (list established by decree and available here) if ≤ €47,000 and < 2.4 tonnes (t): €7,000 for low-income households €4,000 for other households Scrappage scheme for a second-hand or new BEV or FCEV ≤ €47,000 (same conditions as for the bonus): €5,000 for low-income households €1,500 for other households or a legal entity | N/A |
| Germany | N/A | 10-year exemption for BEVs and FCEVs registered until 31 December 2025. Exemption granted until 31 December 2030 at the latest. Exemption from the annual circulation tax for vehicles emitting ≤ 95g CO2/km. | Reduction of the taxable amount for BEVs and PHEVs (1-0.5% of the gross catalogue price per month). PHEVs must meet additional requirements, which become more stringent over time. Additional reduction of the taxable amount for BEVs with a gross list price up to €60,000 (1-0.25% of gross catalogue price per month). An increase in this price is being discussed | Funding applications are no longer accepted since 31 December 2023. | N/A |
| Greece | 75% reduction in registration tax (RT) for PHEVs up to 50g/km. 50% reduction in RT for HEVs and PHEVs emitting ≥ 50g CO2/km. | HEVs with engine capacity < 1,550cc and registered before 31 October 2010 are exempt from circulation tax. 60% of the circulation tax for HEVs with an engine capacity ≥ 1,550cc registered before 31 October 2010. Exemption for cars emitting < 90g CO2/km (NEDC) or 122g (WLTP). BEVs are exempt from the personal income presumption system. | Exemption of the benefit- in-kind tax for BEVs and PHEVs emitting ≤ 50g CO2/km (NEDC or WLTP) with a net retail price (NRP) ≤ €40,000. €40,000 deductible in the NRP for BEVs and PHEVs up to 50g CO2/km with a higher NRP value. | 30% cashback on NRP for BEVs, with a maximum cashback of €8,000. Extra €1,000 if a car of ≥ 10 years is scrapped, or the buyer is ≤ 29 years old. 40% cashback on NRP for battery-electric taxis, with a maximum cashback of €17,500. Extra €5,000 for scrapping the old taxi, which is mandatory. | N/A |
| Hungary | Exemption for BEVs/PHEVs | Exemption for BEVs/PHEVs | Exemption for BEVs/PHEVs | From 15 June 2020, purchase incentives for electric cars: €7,350 for a gross price of up to €32,000 €1,500 if gross price is €32,000–44,000 | N/A |
| Ireland | €5,000 relief for BEVs up to €40,000. The relief gradually reduces after €40,000 and ends at €50,000. BEVs are exempt from NOx tax. | Minimum rate (€120 per year) for BEVs. Reduced rate (€140 per year) for PHEVs ≤ 50g CO2/km. | 0% benefit-in-kind for the first €50,000 for BEVs | Purchase incentives for individuals: Up to €5,000 for BEVs Up to €5,000 for PHEVs with ≤ 50g CO2/km and full-electric range of ≥ 50km | N/A |
| Italy | Exemption from registration fees for BEVs and PHEVs | BEV: Five-year exemption from the date of first registration. After this period, a 75% tax rate reduction applied to equivalent petrol vehicles. HEV: Application of a minimum flat rate (€2.58/kW). Some regions apply discounts on tax ownership. | BEVs emitting ≤ 20g CO2/km with a selling price of ≤ €35,000 + VAT: €6,000 (without scrappage); a bonus of €7,500 where the Equivalent Economic Situation Indicator (ISEE) < €30,000 €11,000 (with scrappage Euro 0-2); €13,750 with ISEE < €30,000 €10,000 (with scrappage Euro 3); €12,500 with ISEE < €30,000 €9,000 (with scrappage Euro 4); €11,250 with ISEE < €30,000 €0 (with scrappage Euro 5); €8,000 with ISEE < €30,000 PHEVs emitting 21-60g CO2/km with a selling price of ≤ €45,000 + VAT: €4,000 (without scrappage); €5,000 with ISEE < €30,000 €8,000 (with scrappage Euro 0-2); €10,000 with ISEE < €30,000 €6,000 (with scrappage Euro 3); €7,500 with ISEE < €30,000 €5,500 (with scrappage Euro 4); €6,875 with ISEE < €30,000 €0 (with scrappage Euro 5); €5,000 with ISEE < €30,000 | For domestic users, a contribution of 80% of the purchase and installation price of standard power infrastructure for recharging electric vehicles, within the maximum limit of €1,500 per applicant. | |
| Latvia | BEVs exempt from registration costs | Exemption for BEVs from road taxes | Minimum benefit-in-kind tax (€10/year for BEVs) | Purchase incentives for new and used BEVs | Charging infrastructure subsidies (up to €3,000 for shared systems in multi-party buildings; up to €1,500 for wallboxes for private users) |
| Lithuania | VAT deduction for BEVs ≤ €50,000 | Exempt from registration tax for BEVs | Purchase incentives (bonus) for vehicles ≤ six months: BEVs: €5,000 Additional €1,000 for scrapping a used diesel or petrol car, owned for at least 12 months, with a valid MOT Maximum subsidy is €400,000 per company. | Purchase incentives (bonus) for individuals: €2,500 for a used BEV with a first registration after 2 April 2016, or model year 2016 or newer €5,000 for a new BEV not older than six months from the first registration €2,000 for a new PHEV Additional €1,000 for scrapping used diesel or petrol cars, owned for at least 12 months, and with a valid MOT The maximum purchase price of an eligible vehicle is €45,000. | Private charging infrastructure subsidy: Up to €1,500 for wallboxes or charging cables Up to €3,000 for shared systems in multi-party buildings Public charging infrastructure subsidy: up to €10,000 |
| Luxembourg | 50% administrative tax reduction for BEVs | Minimum road tax rate of €30/year for BEVs | Benefit-in-kind tax reduced to 0.5% for BEVs ≤ 18kWh/100km; 0.6% for BEVs > 18kWh/100km | Purchase incentives of €8,000 for BEVs ≤ 18kWh; €3,000 for BEVs > 18kWh | Charging infrastructure incentives range from €750 for wallboxes to €1,650 for intelligent multiuser systems |
| Malta | Minimum road tax for vehicles emitting ≤ 100g CO2/km | Minimum road tax for vehicles emitting ≤ 100g CO2/km | N/A | BEVs: €11,000 for individuals Up to €20,000 for companies (additional incentive if established in and operating from certain localities Additional grant to scrap a vehicle of ≥ 10 years. More details: www.transport.gov.mt/ land/sustainable-transport/ financial-incentives-2023/ new-electric-vehicles-6188. | N/A |
| Netherlands | Exemption from registration fees for BEVs | Exemption from ownership tax for zero-emission vehicles; 50% reduction for PHEVs | Benefit-in-kind tax rate: 16% for BEVs (with a cap at €30,000); no cap for hydrogen-powered vehicles | Subsidy scheme (SEPP) for individuals to buy/lease small or compact BEVs, new or used. Arbitrary depreciation of environmental investments scheme (Vamil) for fuel-cell electric cars or taxis and battery-electric cars equipped with solar panels. More details: www.rvo.nl/subsidie-en- financieringswijzer. | N/A |
| Poland | Exemption for BEVs and FCEVs. Exemption for PHEVs up to 2,000cc until end 2029. | Depreciation up to PLN 225,000 for BEVs and FCEVs; PLN 150,000 for low-emission vehicles | N/A | Purchase incentives for individuals and legal persons (purchase, leasing): from PLN 18,750 to PLN 27,000 for BEVs and FCEVs of a maximum price of PLN 225,000. | N/A |
| Portugal | Car tax: BEVs: complete exemption PHEVs: 75% reduction if range in all-electric mode ≥ 50km and < 50g CO2/km HEVs: 40% reduction if range in all-electric mode > 50km and CO2 emissions ≤ 50g/km | Exempt for BEVs; reduced tax for PHEVs | Autonomous corporate income tax: Exemption for BEVs Reduction for PHEVs if range in all-electric mode ≥ 50km and CO2 emissions < 50g/km VAT deduction: 100% for BEVs ≤ €62,500 + VAT 100% for PHEVs ≤ €50,000 + VAT | Private users: €3,000 to buy a new BEV, with purchase price of up to €62,500, limited to one vehicle per person. | N/A |
| Romania | Exemption from VAT for BEVs | N/A | N/A | Renewal scheme (RABLA) for cars: Obligation to scrap at least one vehicle > eight years old Up to €3,300 for an HEV (≤ 150g CO2/km) RABLA PLUS for cars: Bonus of €2,500 for a PHEV (≤ 80g CO2/km) Bonus of €5,000 for a BEV Not mandatory to scrap a vehicle | N/A |
| Slovakia | Maximum registration fee of €33 for BEVs | Road tax exemption for BEVs; 50% reduction for PHEVs | Accelerated depreciation for BEVs and PHEVs (two years) | N/A | N/A |
| Slovenia | Minimum acquisition tax rate (0.5%) for BEVs | N/A | N/A | Incentives of up to €4,500 for BEVs | N/A |
| Spain | BEVs/PHEVs/EREVs/FCEVs: 15% personal income tax deduction (max €3,000); VAT exemption for alternatively powered vehicles emitting ≤ 110g CO2/km | Road tax reduction of 75% in main cities (e.g., Madrid, Barcelona) | Benefit-in-kind tax reduction (30% for BEVs, PHEVs ≤ €40,000; 20% for HEVs ≤ €35,000) | Incentive scheme (MOVES III) until 31 July 2024 for private individuals, depending on whether a vehicle is being scrapped: €4,500-7,000 for BEVs and FCEVs €2,500-5,000 for PHEVs More details: www.idae. es/ayudas-y-financiacion/ para-movilidad-y-vehiculos/ programa-moves-iii. | MOVES III infrastructure program offers incentives to cover 30-70% of eligible costs, depending on the region and type of charging installation |
| Sweden | N/A | Road tax: SEK 360/year for BEVs | The private use of a company car is taxed on benefits. For some cars, there is a permanent tax reduction of the benefit value: BEVs and FCEVs: SEK 350,000 PHEVs: SEK 140,000 The taxable benefit value is based on the new car price and reduced by the amount. The discount may not exceed 50% of the car price | Scrapping premium will be introduced during the second half of 2024. More information will be published on www.boverket.se. | Up to 50% tax deduction for charging box installation (max SEK 50,000); Ladda bilen grant for apartment buildings and workplaces (50% cost coverage) |
| Iceland | 5% customs value tax for BEVs | N/A | N/A | €6,000/ISK 900,000 for a new BEV costing < €67,000/ ISK 10m retail price. Used BEV costing < €67,000/ISK 10m retail price: €4,700/ISK 700,000 for a car of one-two years old €3,350/ISK 500,000 for a car of two-three years old €2,700/ISK 400,000 for a car of three-four years old The total amount allocated in subsidies for zero- emission vehicles (all categories) in 2024 is €50.25m (ISK 7.5bn). | N/A |
| Norway | No VAT for BEVs/FCEVs ≤ NOK 500,000; 25% VAT for value > NOK 500,000 | Tax deduction for low-emission vehicles | N/A | N/A | N/A |
| Switzerland | Various cantonal reductions or exemptions for traffic tax depending on fuel consumption (CO2/km) | Same as acquisition benefits in various cantons | N/A | Various cantonal subsidies for the installation of electromobility infrastructure | N/A |
| UK | N/A | Preferential tax rates for electric and ultra- low emission cars (< 75g CO2/km). More details: www.gov. uk/tax-company-benefits/ tax-on-company-cars. | 35% discount (maximum £2,500) for a converted car to a wheelchair-accessible vehicle. It should: have zero CO2 emissions; be able to travel ≥ 112km without any emissions; and cost < £35,000 (conversion cost not included). | The Electric Vehicle Homecharge Scheme (EVHS): for homeowners who live in apartments and renters. The Workplace Charging Scheme (WCS): a business scheme for electric car charger installation. It covers up to 75% of the cost and maximum £350/socket (maximum 40 sockets). |
APPENDIX 1 – Strategic Analysis of Green Policies Across Selected European States and Their Economic Implications for EV Financing
1. Austria
- Tax Benefits:
- Austria offers a VAT deduction for zero-emission vehicles. The deduction applies on a sliding scale, where vehicles valued at €40,000 or less receive a full VAT deduction, those valued between €40,000 and €80,000 get a deduction for the first €40,000, and no deduction is available for vehicles over €80,000.
- EVs are exempt from both ownership tax and pollution tax.
- Incentives:
- Purchase bonuses for EVs are available, with €2,000 in government funding and €3,000 in importer bonuses. These incentives are valid for vehicles with a list price under €60,000.
- Austria also provides incentives for charging infrastructure, including subsidies for intelligent charging cables and wallboxes.
- Economic Strategy:
- Austria aims to reduce dependency on fossil fuels and decrease emissions, pushing for early adoption of EVs through these incentives. The generous tax deductions for vehicles under €40,000 show an intent to make EVs accessible to both businesses and middle-class consumers.
- Investment in infrastructure is crucial for long-term sustainability, and Austria is focusing on building the necessary charging networks to support the growing EV market. This is further enhanced by region-specific incentives, showcasing a decentralized approach to promoting EV adoption.
2. Belgium
- Tax Benefits:
- Flanders offers full exemption from registration tax for BEVs and FCEVs, while Brussels and Wallonia provide a minimal tax rate for such vehicles (€61.50 and €97.68 per year, respectively).
- Companies in Belgium can deduct 100% of the costs related to BEVs, with maximum tax deductibility for company cars, including full benefits for private use of BEVs.
- Incentives:
- In Flanders, individuals can receive a €5,000 subsidy for new zero-emission vehicles, and €3,000 for used BEVs at least three years old.
- Some municipalities also provide subsidies for charging infrastructure, with 150% tax deductibility for publicly accessible chargers.
- Economic Strategy:
- Belgium has adopted an aggressive corporate incentive strategy, primarily aiming to electrify company fleets. The focus on company cars and charging infrastructure at corporate premises underlines a policy that believes in the private sector leading the transition to EVs.
- By allowing both new and used EVs to qualify for substantial subsidies, Belgium encourages a broader demographic to adopt EVs, increasing the affordability for lower-income families.
3. Croatia
- Tax Benefits:
- No excise duties and exemptions from environmental taxes for electric vehicles.
- Incentives:
- The government provides €9,000 for new BEVs and €5,000 for PHEVs through a yearly incentive scheme. However, funds are limited, and vehicles must be retained for at least two years.
- Economic Strategy:
- Croatia’s EV incentives focus heavily on financial accessibility for middle-class consumers, with substantial direct payments to those purchasing EVs. However, the limited availability of these funds indicates that the government is cautiously managing the financial burden of these incentives while promoting gradual adoption.
4. Cyprus
- Tax Benefits:
- Vehicles emitting less than 120g CO2/km are exempt from various taxes.
- Incentives:
- Up to €19,000 for the purchase of a BEV, with a cap on vehicle costs of €80,000. Additionally, individuals can receive €1,000 for scrapping old cars.
- Economic Strategy:
- Cyprus is pushing for EV adoption via substantial purchase subsidies, particularly targeting high-emission vehicle replacements. This demonstrates the government’s goal to aggressively reduce emissions from older vehicles while making EVs attractive to a wider audience.
5. Czechia
- Tax Benefits:
- BEVs, FCEVs, and PHEVs emitting ≤ 50g CO2/km are exempt from registration fees and road taxes. BEVs are also exempt from road tolls.
- Charging stations and EV infrastructure benefit from accelerated depreciation, incentivizing businesses to invest in EV infrastructure.
- Incentives:
- Discounted loans for corporations that invest in BEVs, FCEVs, and EV charging stations, with a budget of CZK 1.95bn.
- The Ministry of Transport is investing CZK 6bn into building charging stations and hydrogen refilling infrastructure.
- Economic Strategy:
- Czechia’s focus on business incentives and infrastructure development aligns with a strategy to encourage corporate participation in the green economy. By providing low-cost loans and government support for infrastructure, Czechia is preparing for a larger EV market, particularly targeting businesses and municipalities.
6. Denmark
- Tax Benefits:
- Zero-emission vehicles pay 40% of the registration tax, with significant deductions per kWh of battery capacity.
- CO2-based ownership taxes mean zero-emission cars pay the minimum semi-annual tax of DKK 390.
- Incentives:
- While no direct purchase subsidies are provided, Denmark offers strong tax reductions to make EVs more affordable in the long run.
- Economic Strategy:
- Denmark’s economic model is focused on reducing the long-term cost of ownership rather than offering upfront purchase incentives. The heavy reliance on tax reductions aims to normalize EV ownership, ensuring that the benefits compound over time, particularly for middle-income families.
7. Finland
- Tax Benefits:
- Exemptions from registration taxes for zero-emission vehicles since 2021.
- Monthly tax deductions for BEVs, which remain in place until 2025.
- Incentives:
- Finland does not offer direct purchase subsidies for private consumers but supports companies by offering tax deductions for workplace charging infrastructure and vehicle ownership.
- Economic Strategy:
- Finland focuses on indirect incentives through tax reductions, with a goal to promote long-term EV adoption. The approach is conservative in terms of direct government spending but places emphasis on incentivizing private companies to lead the infrastructure buildout.
8. France
- Tax Benefits:
- BEVs, FCEVs, and PHEVs are exempt from the mass-based malus and receive regional exemptions on taxes for alternatively powered vehicles.
- Incentives:
- France offers a €7,000 bonus for low-income households purchasing a BEV, while higher-income households are eligible for €4,000.
- The scrappage scheme provides an additional €5,000 to replace older vehicles with BEVs.
- Economic Strategy:
- France’s strategy is focused on inclusivity, making EV adoption accessible for low-income households. The heavy emphasis on scrappage and bonuses suggests an urgency to replace older, polluting vehicles, signaling France’s aim to accelerate the transition to a clean energy economy.
9. Estonia
- Tax Benefits: Estonia offers no significant tax benefits for electric vehicles, showing a gap in this area compared to other countries.
- Incentives: New BEVs and FCEVs receive €5,000 for individuals and €4,000 for legal entities.
- Economic Strategy: Estonia’s financial incentives are focused on promoting individual adoption of BEVs, but the absence of substantial tax benefits indicates a lack of comprehensive EV policy. Estonia could aim for a more balanced strategy by integrating tax cuts and further developing EV infrastructure.
10. Finland
- Tax Benefits: Finland exempts zero-emission vehicles from registration taxes, offering tax deductions for BEVs, which will be available until 2025.
- Incentives: Electric vehicle charging at the workplace is exempt from income tax, incentivizing businesses to install charging points.
- Economic Strategy: Finland’s policies favor long-term economic benefits for EV ownership, but the lack of direct purchase incentives suggests a slower, more organic market development. Their focus on tax deductions over large subsidies implies a conservative fiscal policy approach.
11. France
- Tax Benefits: Regions in France offer exemptions (total or partial) for alternatively powered vehicles such as BEVs and FCEVs. There are also tax exemptions for CO2-based taxes for cars emitting less than 60g/km.
- Incentives: France provides a €7,000 bonus for low-income households to purchase BEVs and FCEVs, with a lower bonus of €4,000 for higher-income groups. A scrappage bonus of €5,000 applies when replacing older, high-emission vehicles.
- Economic Strategy: France’s financial strategies prioritize social equity and accessibility, making EVs more affordable for lower-income families. The government’s scrappage scheme suggests a push to remove older, polluting vehicles from circulation, accelerating the switch to cleaner transportation.
12. Germany
- Tax Benefits: Germany exempts BEVs and FCEVs from vehicle taxes for up to 10 years if registered before the end of 2025. Additional reductions apply to PHEVs, with a higher focus on vehicles meeting stringent CO2 emission limits.
- Incentives: While Germany has phased out purchase subsidies after December 2023, past incentives have been considerable, showing that the government had heavily promoted early adoption but is now transitioning to a tax-based incentive system.
- Economic Strategy: Germany’s decision to phase out purchase incentives shows the country’s confidence in the EV market’s maturity. Instead, they are shifting towards indirect incentives like tax reductions to sustain growth while managing budget impacts.
13. Greece
- Tax Benefits: Greece offers a 75% reduction in registration taxes for PHEVs and exemptions from circulation tax for BEVs.
- Incentives: Greece provides significant purchase incentives with a €30% cashback on BEV prices, capped at €8,000, and additional bonuses for scrapping older vehicles.
- Economic Strategy: Greece’s aggressive cashback strategy is likely driven by the need to modernize an older vehicle fleet and reduce emissions quickly. Offering significant scrappage bonuses also shows a government intent on retiring outdated vehicles that contribute heavily to urban pollution.
14. Hungary
- Tax Benefits: Hungary provides exemptions from registration and ownership taxes for both BEVs and PHEVs.
- Incentives: The government offers €7,350 in purchase incentives for EVs priced below €32,000, ensuring the affordability of EVs for lower-income consumers.
- Economic Strategy: Hungary’s strategy includes providing strong purchase incentives for affordable electric cars, ensuring a wider demographic can access these vehicles. This is a reflection of the government’s goal to lower the barriers to EV adoption while stimulating the domestic market for affordable EVs.
15. Ireland
- Tax Benefits: BEVs are eligible for a €5,000 vehicle relief, and a 0% benefit-in-kind tax applies to the first €50,000 of the car’s value for company-owned vehicles.
- Incentives: Purchase incentives of up to €5,000 are provided for BEVs, with reduced incentives for PHEVs, showing a strong preference for fully electric vehicles.
- Economic Strategy: Ireland’s policies focus on creating strong financial incentives for private consumers and businesses, balancing upfront relief with tax benefits. By incentivizing company fleets, Ireland aims to have businesses lead in the transition to electric vehicles.
16. Italy
- Tax Benefits: Italy offers a 5-year exemption from registration taxes for BEVs, followed by a 75% reduction after that period.
- Incentives: Italy provides tiered purchase bonuses, with incentives reaching up to €13,750 for low-income families purchasing BEVs, based on the buyer’s financial situation and whether a scrappage scheme is involved.
- Economic Strategy: Italy’s approach emphasizes socio-economic inclusivity, offering higher incentives to low-income households. The combination of scrappage bonuses and purchase incentives suggests a dual approach: reducing emissions and stimulating demand across income brackets.
17. Latvia
- Tax Benefits: BEVs are exempt from registration costs.
- Incentives: Latvia provides purchase incentives of €5,000 for new BEVs and €2,500 for used BEVs that meet specific criteria, ensuring that consumers at multiple price points can benefit.
- Economic Strategy: Latvia’s incentives for both new and used BEVs reveal an inclusive strategy to widen adoption, making EVs accessible to a broader spectrum of society. The focus on used vehicles helps stimulate the secondary market and encourages more widespread EV use.
18. Lithuania
- Tax Benefits: BEVs are exempt from registration taxes, and businesses can deduct VAT on EV purchases up to €50,000.
- Incentives: Purchase bonuses of up to €5,000 for new BEVs and €1,000 for scrapping older vehicles, which helps encourage fleet renewal.
- Economic Strategy: Lithuania’s strategy centers on encouraging vehicle turnover and making new EVs more accessible. The VAT deduction for businesses also indicates a push to involve the corporate sector in the country’s green transition.
19. Luxembourg
- Tax Benefits: Zero-emission vehicles are subject to the minimum annual road tax rate of €30.
- Incentives: Purchase bonuses of €8,000 are available for BEVs consuming ≤18kWh/100km.
- Economic Strategy: Luxembourg incentivizes the purchase of efficient electric vehicles, reflecting a strategy that encourages energy-efficient EV models over more power-hungry options. The country’s modest tax structure helps boost EV adoption without creating excessive government expenditure.
20. Malta
- Tax Benefits: BEVs and PHEVs are eligible for reduced tax rates, particularly for vehicles emitting ≤100g CO2/km.
- Incentives: Malta offers €11,000 for individuals purchasing new BEVs and up to €20,000 for companies, with additional bonuses for scrapping older vehicles.
- Economic Strategy: Malta’s policies prioritize fleet renewal and aim to encourage businesses to switch to electric transportation. The high incentives for scrapping cars suggest a focus on rapidly retiring the oldest, most polluting vehicles.
21. Netherlands
- Tax Benefits: Zero-emission vehicles are exempt from registration taxes and ownership taxes.
- Incentives: The Netherlands offers a subsidy scheme (SEPP) for individuals to buy or lease small BEVs, and corporate entities benefit from an arbitrary depreciation scheme (Vamil) for EV-related investments.
- Economic Strategy: The Netherlands’ focus on corporate and individual subsidies, alongside tax exemptions, highlights the country’s commitment to a rapid transition to EVs, with a strong focus on both personal mobility and corporate adoption.
22. Poland
- Tax Benefits: BEVs and FCEVs are exempt from registration and ownership taxes.
- Incentives: Purchase incentives range from PLN 18,750 to PLN 27,000 for BEVs, with caps on vehicle costs ensuring that the funds are targeted toward mid-market vehicles.
- Economic Strategy: Poland’s policies aim to make EVs accessible to the general population, balancing incentives with vehicle cost caps to manage fiscal expenditure. By promoting BEVs over hybrids, Poland is signaling its commitment to a fully electric future.
23. Portugal
- Tax Benefits: BEVs are fully exempt from registration and ownership taxes.
- Incentives: Private users can receive up to €3,000 for purchasing a BEV, with a purchase price limit of €62,500.
- Economic Strategy: Portugal’s EV policy is focused on gradual, middle-market adoption, with incentives designed to encourage families and small businesses to switch to electric vehicles without burdening the public finances excessively.
24. Romania
- Tax Benefits: BEVs are exempt from ownership taxes.
- Incentives: The RABLA Plus scheme offers €5,000 for purchasing a BEV, with no requirement to scrap an older vehicle. A smaller bonus applies to PHEVs.
- Economic Strategy: Romania’s incentive system is designed to maximize the adoption of BEVs without requiring the scrapping of older vehicles, making it easier for individuals to make the switch. This is aligned with Romania’s goal of increasing EV penetration while managing public spending carefully.
25. Slovakia
- Tax Benefits: BEVs are subject to maximum registration fees of €33 and exempt from road taxes.
- Incentives: Slovakia does not offer significant purchase incentives but focuses on tax reductions for both individuals and businesses.
- Economic Strategy: Slovakia’s focus on minimizing taxes rather than offering direct purchase subsidies suggests a longer-term approach, aiming to lower operational costs for EVs to make them more attractive.
26. Slovenia
- Tax Benefits: Slovenia offers a minimum additional tax rate of 0.5% for BEVs.
- Incentives: The country provides up to €4,500 in purchase bonuses for BEVs, focusing on encouraging individual ownership.
- Economic Strategy: Slovenia’s modest tax reductions and purchase incentives reflect a balanced strategy, ensuring fiscal sustainability while promoting EV adoption.
Countries like Norway, Belgium, and Germany lead with comprehensive tax breaks and incentives designed to push the market toward EV adoption, particularly in the corporate sector. France and Italy offer a strong focus on equitable access by providing higher incentives to low-income households. Estonia and Czechia could strengthen their policy framework by expanding tax benefits and enhancing EV infrastructure support.
These countries adopt a variety of strategies to balance fiscal sustainability with the urgency of transitioning to cleaner energy. Nations with more advanced EV markets are starting to phase out direct purchase subsidies in favor of long-term tax relief, while others rely on direct financial incentives to foster early adoption.
[…] The Comprehensive Overview of Electric Vehicle Tax Benefits and Incentives Across… […]
[…] The Comprehensive Overview of Electric Vehicle Tax Benefits and Incentives Across… […]