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German Lawmakers Back E-Car Tax Breaks

by Ulrika Lomas, Tax-News.com, Brussels

30 October 2012


The German Bundestag, or lower house of parliament, has recently adopted a government bill, providing for an amendment to the country’s insurance tax and motor vehicle tax laws, in the form agreed by the finance committee on October 24.

In accordance with the bill, a ten-year exemption from motor vehicle tax (Kfz-Steuer) will be accorded to individuals electing to purchase purely electric vehicles or fuel cell cars.

Intended to promote the purchase by individuals of the more expensive e-cars, the provision is to be extended to include other purely electric vehicles, namely commercial vehicles, lighter vehicles and motorcycles.

The measure is to apply to vehicles registered between May 18, 2011, and December 31, 2015. E-vehicles registered between January 1, 2016 and December 31, 2020 will benefit from the current five-year tax exemption.

The Bundestag finance committee rejected a proposal put forward by the Alliance 90/Green Party calling for all vehicles with a carbon dioxide emission of below 50 grams per kilometre to benefit from the tax exemption.

German Chancellor Angela Merkel underlined the government’s ongoing and unwavering commitment to Germany becoming a lead market for electro-mobility at the beginning of October, to be achieved notably by means of tax breaks for electric vehicles as well as by the promise of EUR1bn (USD1.3bn) for research and development.

Although Chancellor Merkel conceded at the time that the government’s ambitious target of putting at least a million electric cars on the roads by 2020 will be a difficult goal to achieve, she nevertheless stressed that it would be wrong to give up on that aim, particularly given that there are still a further eight years ahead, during which time dramatic developments in this dynamic sector could take place.

The government also plans to grant special parking rights and access to drivers of electric recharging stations.

TAGS: individuals | environment | tax | vehicle tax | law | Germany | tax breaks

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