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Higher Costs for Gasoline and Diesel Cars
Previously, if you had a company car purchased by your employer, the taxable benefit was calculated at 9% of its purchase price. Starting February 1, 2025, this will rise to 15%. If fuel is included, the rate even jumps to 20%. For leased vehicles, the cost increase is even steeper: from 30% to 50% of the annual cost (including lease, maintenance, and insurance), and up to 67% if the employer covers the fuel costs.
Essentially, businesses will face higher social security charges on these vehicles, and employees may see an increase in their tax liabilities. The objective is clear: make gasoline and diesel cars less appealing to encourage a shift to electric vehicles.
Electric Cars Get Preferential Treatment… But Not All
For electric cars, the government is maintaining a tax reduction, but with a significant change. Previously, they enjoyed a 50% reduction in the valuation of the taxable benefit. Now, it’s 70%, with a cap set at 4,582 euros per year. Another benefit: the electricity used for charging at the office isn’t included in the calculation, and home charging is considered at 50%.
However, this reduction only applies to models with a good “eco-score.” Essentially, only electric vehicles produced in Europe will qualify. This excludes Chinese models like those from BYD or MG, as well as some high-end vehicles that don’t meet the criteria.
Mixed Reactions from Businesses and Employees
Unsurprisingly, industry professionals are not thrilled. The union of long-term rental companies and the organization Mobilians have criticized the reform for being implemented without consultation, featuring complex rules, and increasing charges for businesses. For employees, a company car is often a significant employment benefit, and this reform could diminish its attractiveness.
Forcing a Green Shift in Fleets?
With these new rules, the message is clear: traditional fuel cars are becoming a fiscal burden, while electric vehicles remain favored… at least for certain models. It remains to be seen whether businesses will embrace this change or resist the new pressures.