Extension of tax benefits for electric company cars

The Tax Reform Act will be supplemented by a further measure from the growth initiative, which provides for additional tax benefits for electric company cars.

In its package of measures known as the "growth initiative", the German government has also provided for an extension of the tax benefits for electric company cars. The coalition parties are to incorporate corresponding provisions into the draft of the Tax Reform Act during parliamentary deliberations by means of drafting assistance for amendments that the federal government has now decided on. This law already contains a number of other measures from the "growth initiative".

Two changes are now planned for electric company cars, both of which will apply to electric vehicles purchased from July 2024. Firstly, a new special depreciation allowance will be introduced for newly registered, purely electric and zero-emission vehicles. In the first year, 40 % of the acquisition costs can be written off. The depreciation rate is reduced to 24 % in the second year. As the depreciation rate is so high in the first two years and vehicles have to be depreciated over six years, the depreciation rates from the third year onwards are lower than the rate of 16.67 % for straight-line depreciation. In the third year, the depreciation rate is 14 % and falls to 9, 7 and 6 % in the fourth to sixth years. According to current planning, the special depreciation is limited to purchases until the end of 2028.

In addition to this special depreciation, the maximum gross list price for reduced company car taxation, which was only raised to 70,000 euros at the beginning of the year, is to be increased by a further 25,000 euros to 95,000 euros. If this gross list price is not reached, the private use of the electric company car can be compensated with a quarter of the rates otherwise due under the 1 % rule.