Deduct an electric car

Electric cars are the winning choice when it comes to tax deductibility

You may have noticed a number of self-employed professionals buying or leasing electric cars, despite the fact that their price is generally higher.

The reason is simple: the ultra-favorable deductibility of these vehicles, and their relative equipment!

For vehicles purchased before 1 January 2020, the deduction was 120%.
Deductibility is now 100% for vehicles purchased from 2020 onwards.

Only from 2031 does tax deductibility decrease significantly, to a maximum of 67.5%. So you still have some time to purchase a tax-advantaged company car 😉.

Hybrids vs. fully electric vehicles

The deductibility of hybrids is not the same as that of fully electric vehicles and, since 2023, the appeal of hybrids has been seriously reduced, at least from a tax point of view.

For hybrids purchased between 2018 and 1 July 2023, the deductibility was given by the following formula, which depends on the CO2 emissions of your hybrid car:

120% - (0.5% x CO2/km)

For hybrids purchased after 1 July 2023, the deductibility will be capped at 75% and this rate will be further reduced in 2026, 2027 & 2028 (see details).

Charging points get a tax-deductible boost

The installation of a charging point, subject to certain conditions, will be more than 100% tax deductible (which means you get a kind of tax ‘credit’).

Deductibility will depend on the date of installation:

• Before 31 December 2022 (tolerated on 31 March 2023): 200%
• Before 31 August 2024: 150
• After 31 August 2024: 100%

The conditions for claiming this deduction are as follows:

• The charging point must be depreciated on a straight-line basis over at least five taxable periods,
• The charging point must be acquired as new or made up as new,
• The charging point must be accessible to the public and freely accessible to any third party at least during the company’s usual opening or closing hours,
• The charging point must be intelligent.

The cost of electricity is also fully deductible

All costs relating to your vehicle follow the same deductibility rules: maintenance, insurance, accessories, registration tax, etc.

• The electricity used to recharge your electric vehicle is therefore 100% deductible (if your vehicle was purchased after 2018).
• Electricity from your hybrid purchased after 1 July 2023 will be deductible at a maximum of 75%. Worse still, the cost of buying their fossil fuel will be deductible at a maximum of 50%.

This is precisely why electric vehicles are so interesting from a tax perspective 😉.