As of: March 26, 2024, 6:01 p.m
By: Lars-Eric Nievelstein
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A few months ago the government passed a new traffic light law.
This provides for tax cuts for electric car drivers.
Now it has also overcome the Federal Council
Update from March 22nd, 10:20 a.m.:
The billion-dollar growth package with tax relief and reductions in bureaucracy for companies has been approved.
The Federal Council approved the so-called Growth Opportunities Act on Friday by a majority after discussions in the Mediation Committee.
Finance State Secretary Katja Hessel described the compromise reached as balanced.
“It sends the urgent signal that the economy needs now,” she emphasized in her speech to the country representatives.
Privately used electric cars – traffic light law should adjust taxes
Berlin – The Growth Opportunities Act has been causing lively discussions in politics and business for weeks.
Essentially, the new traffic light law is intended to provide relief for companies.
This in turn should – nomen est omen – create opportunities for growth.
There are also some new regulations for electric car drivers.
The changes specifically concern the Income Tax Act (EStG).
This provides for special treatment for drivers who use company vehicles with low CO₂ emissions privately.
This includes purely electric cars including fuel cell vehicles.
“The private use of a motor vehicle that is used more than 50 percent for business purposes is to be assessed for each calendar month at 1 percent of the domestic list price at the time of initial registration plus the costs for special equipment including sales tax,” says the EStG.
A Tesla at a Supercharger station.
(Symbolic image) A few months ago the government passed a new traffic light law.
This provides for tax cuts for electric car drivers.
© Jochen Tack/Imago
The law reduces the tax base of the affected vehicles by certain amounts, depending on how expensive the car is, when the employer purchased it or what battery life it has.
“If purchased after December 31, 2018 and before January 1, 2031,” if the car also does not cause any carbon dioxide emissions and the gross list price does not exceed 60,000 euros, only a quarter of the assessment basis and a quarter of the acquisition costs should be recognized as sales tax become.
Less taxes for more expensive electric cars
The new traffic light law now increases the range of cars that benefit from this special treatment.
The traffic light coalition originally wanted to raise the gross list price limit to 80,000 euros, but later corrected the figure to 70,000 euros.
“In order to increase demand, taking into account the goals of promoting sustainable mobility and in order to reflect the increased acquisition costs of such vehicles in a practical manner, the existing maximum amount will be increased from 60,000 euros to 80,000 euros,” wrote the federal government in the relevant printed matter (before the 70,000-euro Euro update).
This applies accordingly to the “transfer of a company motor vehicle” to employees.
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In plain language, this means: E-cars can be quite a bit more expensive before they are excluded from the special income tax regime.
This means that drivers of more expensive company electric cars incur fewer taxes.
A few months ago, the traffic light coalition stopped promoting electric cars, which caused severe criticism and a slump in demand.
Federal Council still has to decide – traffic light law not certain
However, there is still a meeting in the Federal Council before the Growth Opportunities Act actually becomes reality.
The CDU and CSU are still blocking the traffic light law.
To agree, they demand more relief for farmers.
There are only days left until the big meeting - and it is not clear whether the Union will jump over its shadow.
Among other things, the Growth Opportunities Act is intended to relieve the burden on pensioners and eliminate double taxation.