On September 4, 2024, the Federal Cabinet approved two important changes to the Tax Reform Act, which are particularly exciting for electric car drivers. These new regulations aim to further promote electric mobility in Germany by creating financial incentives. Here are the most important points:
Tax relief for newly purchased electric cars
A new depreciation option is intended to make the purchase of electric vehicles more attractive. Anyone who buys a purely electric vehicle will be able to use
- 40 % in the year of purchase,
- 24 % in the first subsequent year,
- 14 % in the second subsequent year,
- 9 % in the third subsequent year,
- 7 % in the fourth subsequent year,
- 6 % in the fifth subsequent year.
This regulation applies to new electric cars purchased between July 2024 and December 2028. Important: The vehicles must be purely electric and cannot be combined with other special depreciation allowances.
Increase in the maximum amount for company car taxation
Previously, only a quarter of the gross list price or only a quarter of the acquisition costs for electric vehicles with a maximum price of €70,000 was recognized (in accordance with Section 6 (1) no. 4 sentence 2 no. 3 EStG (1% rule) and Section 6 (1) no. 4 sentence 3 no. 3 EStG (logbook rule)). This maximum amount has now been raised to 95,000 euros (Section 6 (1) no. 4 sentence 2 no. 3 and sentence 3 no. 3 EStG-E). This is intended to further increase the attractiveness of zero-emission company cars and encourage companies to purchase more electric vehicles. This regulation applies accordingly to the provision of a company car to an employee (Section 8 (2) sentences 2, 3 and 5 EStG) and is to apply for the first time to vehicles purchased after June 30, 2024.
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The author: Timo Unterberg
Anyone who knows me knows that tax law is my passion! When I am not advising young growth companies and medium-sized corporate clients on restructuring, financing issues or corporate succession, I am on the road as a lecturer in tax consultant training and continuing education. I also regularly write tax-related articles for specialist journals.
