To meet Europe's 2030 climate targets, fiscal rules of the game considerably. If you are considering buying a new company car in the short term, it is best to order it before a certain date as these cars will remain subject to the existing car cost deduction regime for the entire duration.
These are the following boundary dates:
- Hybrid cars (WLTP value = 50): order before 01/01/2023
- Fossil fuel cars: ordering before 01/07/2023
- Electric cars: ordering before 01/01/2027
The future tax regime will be linked to the date of purchase, lease or rental of the car. As was the case in the past with such changes, company cars already ordered but not yet delivered at that time will also be considered purchased. For leases and rentings, the date on which the lease or rental contract is concluded will be taken into account.
If you ordered your car after the applicable cut-off date, the government envisages an extinction scenario where the deductibility of your car will go down (significantly) every year with no cost deduction available for fossil-fuelled or hybrid cars from tax year 2029.
When buying, renting or leasing a hybrid car between 1 January 2023 and 1 July 2023, the existing deduction formula will continue to apply, but the petrol or diesel will only be deductible for up to 50%.
Only pure electric cars will still be tax deductible in the long run. If the relevant electric car is purchased, rented or leased before 1 January 2027, the cost will be fully tax deductible for the entire period of use of the vehicle. For purchases, rentals or leases after 1 January 2027, the tax deductibility will gradually decrease to 67.50% for purchases, rentals or leases after 1 January 2031
For company cars already present in your company, nothing changes regarding tax deductibility.
Publication date : 25/11/2022
