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Germany Charges Up Electric Car Tax Breaks

by Ulrika Lomas, Tax-News.com, Brussels

20 May 2016


The German Cabinet approved a draft law on May 18 to improve tax incentives for the purchase of electric vehicles.

The measures extend the current five-year road tax exemption for electric vehicles to ten years. The law will take effect retroactively from January 1, 2016.

In addition, individuals who charge electronic vehicles at their workplace will be entitled to pay a concessionary income tax rate of 25 percent on the fringe benefit.

The new measures follow last month's announcement that buyers of electric and hybrid vehicles will receive grants of EUR4,000 (USD4,500) and EUR3,000, respectively, towards the purchase. The cost of these subsidies, worth EUR1bn in total, are being shared equally by the Government and the auto industry.

The Government is also investing heavily in the infrastructure required to achieve the Government's target of having 1m electric vehicles on the road by 2020, and is spending EUR300m on the construction of 15,000 new charging stations.

TAGS: individuals | environment | tax | tax incentives | law | Germany | construction

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