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April 24, 2017updated 18 May 2017 2:44pm

PwC – growth in EVs and hybrids will change gov’t tax

By Brian Cantwell

By 2030 every third new registered car in the EU could be an electric vehicle and plug-in hybrid, accounting for a 47% market share according to research by PwC and Nexus Communications.

The 2017 Fleet Europe Taxation Guide, in its 11th year and sponsored by Opel/Vauxhall and Volkswagen Financial Services (VFS), says that such an increase will force governments to re-evaluate the tax systems for this ‘greener’ class of vehicles to avoid losing vital revenue.

The growth forecast for EVs and plug-in hybrids has been made, says the guide, under the assumption that current issues with battery capacity, insufficient installation of charging points and high prices for electric and plug-in hybrid cars will be solved.

The report said it looks likely that governments re-examine the tax benefits of electric and hybrid cars in the light of falling income from car taxation. It advises fleet managers to continue to evaluate the use electric and hybrid cars in order to reduce tax costs, which are often between 15% and 20% of the overall TCO.

The report covers changes that have been made by governments in 23 European countries in the taxation of company vehicles during the last 12 months.

In Belgium the deemed benefit-in-kind from a fuel card provided by an employer will increase for payroll tax purposes, while the center of Antwerp has been turned into a low-emission zone (LEZ) which must not be entered by cars that are older than the Euro norm, while other cities like Brussels may follow suit.

In the Netherlands, car registration tax (BPM) for plug-in hybrid vehicles has been calculated according to a separate table since January 1, 2017.

And for wage tax purposes, the benefit-in-kind of cars registered from January 1, 2017 onwards is now calculated on three categories: 4% for those with no CO2 emissions, 35% for cars that are 15 years and older and 22% for all other cars.

In Germany, the tax free recharging of electric car batteries at the workplace looks likely to result of a proliferation of such facilities, while there is  every chance of an increase in CO2 emissions- based vehicle tax as a result of the implementation of the worldwide harmonized light duty test procedure (WLTP) by manufacturers.

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