Given that cars and vans account for 15% of the European Union’s (EU) CO2 emissions, the target of zero emissions for these vehicles has been set for 2035.
This means that, from that year onwards, all new units entering the EU market must be non-polluting.
It is worth mentioning that there are also interim emission reduction targets for 2030, set at 55% for cars and 50% for vans.
This transition must be supported by a comprehensive infrastructure of charging and refuelling stations.
Therefore, to achieve the proposed targets, European countries are implementing various tax benefits and offering incentives.
Below, Mobility Portal Europe shares the details based on information gathered from the official pages of each country and the European Automobile Manufacturers’ Association (ACEA) portal.
Austria
Regarding tax benefits for acquisition, passenger cars and combined zero-emission vehicles used for commercial purposes—both battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs)—enjoy VAT deductions and exemptions.
Units costing 40,000 euros or less will receive the full deduction, while those costing between 40,000 and 80,000 euros will receive the deduction for the first 40,000 euros.
Additionally, Austria exempts all passenger cars and combined zero-emission vehicles from property tax.
Apart from the aforementioned benefit, a tax incentive of 15% of the purchase price and a special depreciation apply to company vehicles.
In terms of incentives, the country will offer a grant for the purchase of new BEVs and FCEVs for private use until the end of 2024. The grant is 2,000 euros, plus an additional 3,000 euros provided by the importer and the federal government.
To qualify, the vehicles must have an electric range of more than 60 kilometres and a pre-tax list price of up to 60,000 euros.
For private charging infrastructure, Austria will offer a grant of between 600 and 1,800 euros, depending on the type of dwelling (single-family, two-family, or complex) until the end of 2024.
Belgium
Regarding tax benefits for acquisition, Brussels and Wallonia offer a minimum tax rate of 61.50 euros for BEVs and FCEVs. Additionally, for property tax, they have minimum rates of 97.68 euros per year.
In contrast, in Flanders, these two technologies are exempt from these taxes.
It is worth noting that the tax benefits in these three regions also apply to company cars.
In terms of purchase incentives, Flanders offers a grant of 5,000 euros in 2024 for a new zero-emission car purchased by a private individual, a non-profit organisation, or a vehicle-sharing platform, with a price limit of 40,000 euros including VAT.
Used vehicles that are at least three years old and have a list price of less than 60,000 euros can also benefit from this subsidy, amounting to 3,000 euros.
Regarding charging infrastructure incentives, some municipalities in Flanders offer subsidies for its installation.
The City of Brussels exempts companies from parking tax if the space is equipped with a charger.
Moreover, the installation of charging points at companies is 100% deductible, and 150% deductible (in 2024) if accessible to the public; private owners receive tax reductions for installing both unidirectional and bidirectional chargers.
Denmark
Denmark offers tax benefits for the acquisition of zero-emission vehicles: 40% of the registration tax is payable; an additional deduction of DKK 165,500 on the registration tax, and DKK 500 from the taxable value for each kWh of battery capacity.
For low-emission vehicles, 55% of the registration tax is payable, with an additional deduction of DKK 46,250 on the registration tax and DKK 500 from the taxable value for each kWh of battery capacity.
Regarding property taxes, both zero and low-emission cars pay a semi-annual minimum rate of DKK 390.
It is worth mentioning that Denmark does not have incentives for either purchase or charging infrastructure.
For companies, however, the value of a charging point provided along with the vehicle (at the employee’s residence) is not subject to tax.
France
For acquisition, French regions offer tax benefits, which consist of a full or 50% exemption for alternative energy cars, including BEVs and hybrid electric vehicles (HEVs).
Additionally, company vehicles are exempt from the CO2-based tax component (“TVS”) for units emitting less than 60g CO2/km (except diesel vehicles).
The country also provides purchase incentives, including a grant for a new BEV or FCEV. This is 7,000 euros for low-income households and 4,000 euros for others.
There is also a scrappage scheme for a used or new BEV or FCEV costing less than 47,000 euros. This grant is 5,000 euros for low-income households and 1,500 euros for other households or legal entities.
France does not have property tax benefits or incentives for charging infrastructure.
Read more: Renewed energy: the French left’s surprise victory gives eMobility a breath of fresh air
Germany
While Germany does not offer tax benefits for acquisition, it does provide a ten-year exemption from property tax for BEVs and FCEVs registered by 31 December 2025.
The exemption is granted until a maximum of 31 December 2030.
Additionally, vehicles that emit less than 95g of CO2 per kilometre may be exempt from the annual circulation tax.
Company cars benefit from a reduced taxable amount for BEVs and PHEVs (1-0.5% of the gross list price per month).
Germany does not have incentives for either infrastructure or car purchases (funding applications have not been accepted since 31 December 2023).
Italy
Although BEVs do not receive tax benefits for acquisition, they are exempt from property tax for five years.
After this period, a 75% reduction in the tax is applied compared to equivalent petrol vehicles.
HEVs are subject to a minimum flat fee of 2.58 euros per kilowatt.
Additionally, the country offers purchase incentives for BEVs with a sales price of less than 35,000 euros plus VAT:
- 6,000 euros (without scrappage); a grant of 7,500 euros if the Equivalent Economic Situation Indicator (ISEE) < 30,000 euros
- 11,000 euros (with scrappage Euro 0-2); 13,750 euros with ISEE below 30,000 euros
- 10,000 euros (with scrappage Euro 3); 12,500 euros with ISEE below 30,000 euros
- 9,000 euros (with scrappage Euro 4); 11,250 euros with ISEE below 30,000euros
- 0 euros (with scrappage Euro 5); 8,000 euros with ISEE below 30,000 euros
PHEVs with a sales price of less than 45,000 euros plus VAT receive the following incentives:
- 4,000 euros (without scrappage); 5,000 euros with ISEE below 30,000 euros
- 8,000 euros (with scrappage Euro 0-2); 10,000 euros with ISEE below 30,000 euros
- 6,000 euros (with scrappage Euro 3); 7,500 euros with ISEE below 30,000 euros
- 5,500 euros (with scrappage Euro 4); 6,875 euros with ISEE below 30,000 euros
- 0 euros (with scrappage Euro 5); 5,000 euros with ISEE below 30,000 euros
Netherlands
In the Netherlands, zero-emission cars are exempt from acquisition and property taxes. PHEVs, however, must pay 50% of the property tax.
Tax benefits for zero-emission company vehicles include a minimum rate (16%). The limit is 30,000 euros for BEVs and there is no limit for hydrogen-powered vehicles.
The country also offers a Subsidy Scheme for Environmental Performance (SEPP) for individuals looking to buy or lease small or compact new or used BEVs.
Additionally, there is a discretionary depreciation under the Environmental Investment Scheme (Vamil) for fuel cell electric vehicles or taxis and battery electric vehicles equipped with solar panels.
Poland
In Poland, BEVs, FCEVs, and PHEVs with engines up to 2,000 cc are exempt from acquisition taxes.
Regarding property tax, the following tax benefits apply: up to PLN 225,000 can be depreciated for BEVs and FCEVs; up to PLN 150,000 for vehicles emitting between 0 and 50 g of CO2/km; and up to PLN 100,000 for vehicles emitting more than 50 g of CO2/km.
Additionally, individuals and legal entities can receive purchase incentives ranging from PLN 18,750 to PLN 27,000 for BEVs and FCEVs, with a maximum price of PLN 225,000.
This country does not offer incentives for charging infrastructure.
Read more: “Mój Elektryk”: Poland’s pioneering eMobility project facing funding shortfall
Portugal
In Portugal, BEVs are exempt from acquisition taxes, PHEVs benefit from a 75% reduction, and HEVs receive a 40% reduction.
Additionally, BEVs are not subject to property tax.
For company cars, BEVs are exempt from autonomous corporate income tax, while PHEVs receive a reduction.
BEVs can also benefit from a 100% VAT deduction if they cost less than 62,500 euros plus VAT, and PHEVs can receive a 100% VAT deduction if they cost less than 50,000 euros plus VAT.
Portugal offers purchase incentives: private users can receive a grant of 3,000 euros for buying a new BEV with a purchase price of up to 62,500 euros.
Read more: UVE reveals: how to stand out as a CPO in the Portuguese market?
Slovakia
Slovakia provides tax benefits for car acquisition: for BEVs, the maximum registration fee is 33 euros, and PHEVs benefit from a 50% reduction.
Regarding the Road Tax, BEVs are exempt, while hybrids pay only 50% of the tax.
Slovakia does not offer incentives for either car purchases or charging infrastructure.
Spain
Regarding tax benefits for acquisition, in Spain, vehicles emitting less than 120 g of CO2 per kilometre are exempt from the “special tax.”
For 2023-2024, the following applies:
- BEVs, PHEVs, Extended-Range Electric Vehicles (EREVs), and FCEVs for private use enjoy a 15% personal income tax (IRPF) deduction on the acquisition cost (excluding taxes) up to a maximum of 3,000 euros. The maximum price of the vehicle must be 45,000 euros (excluding taxes).
- The cost of installing home infrastructure is eligible for a 15% IRPF deduction (maximum of 4,000 euros).
In major cities (such as Madrid, Barcelona, Zaragoza, and Valencia), BEVs receive a 75% reduction in road tax.
For company cars used for private purposes, these are considered a benefit in kind and are subject to IRPF calculations:
- 30% reduction for BEVs and PHEVs costing less than 40,000 euros.
- 20% reduction for HEVs costing up to 35,000 euros.
Regarding purchase incentives, the MOVES III Plan will remain in effect until December 2024.
Initially allocated with a budget of 400 million euros, the program has been extended, reaching a total budget of 1.550 billion euros.
According to ACEA, MOVES III offers the following purchase incentives:
- 4,500-7,000 euros for BEVs and FCEVs.
- 2,500-5,000 euros for PHEVs.
Additionally, funds have been extended for other subsidised initiatives:
- MOVES Corridors for deploying charging points along TEN-T corridors.
- MOVES Fleets: subsidies for renewing heavy electric vehicles.
Read more: New round of MOVES III and the eMobility sector reacts to government action
Sweden
Although Sweden does not offer tax benefits for the acquisition of cars, it does implement a low annual road tax (SEK 360) for zero-emission vehicles and PHEVs.
Additionally, the private use of a company car is taxed as a benefit: there is a permanent reduction in the value of the benefit, which is SEK 350,000 for BEVs and FCEVs, and SEK 140,000 for PHEVs.
Regarding purchase incentives, a scrappage bonus is expected to be introduced in the second half of 2024.
Additionally, the “Ladda bilen” subsidy is available for installing AC charging points for residents in apartment buildings and workplaces. It covers up to 50% of the costs, with a maximum of SEK 15,000 per charging point.
Read more: Top 5: How Are European Cities with the Most Charging Points Progressing?
Switzerland
In Switzerland, sustainable cars do not receive tax benefits for acquisition, but several cantons reduce or exempt road tax for a specific period, depending on fuel consumption. This also applies to company vehicles.
While there are no incentives for car purchases, several cantons and municipalities contribute to the costs of installing charging infrastructure.
