BUSINESS

Incentives to use electric cars

PROKOPIS HATZINIKOLAOU

The government is preparing significant tax incentives to encourage the use of zero- and low-emission vehicles, as well as the proliferation of electric vehicle charging stations.

The detailed set of incentives is spelled out in a circular by the Independent Authority for Public Revenue (IAPR). As expected, incentives are higher for the purchase of electric vehicles than low-emission hybrids, which have been around some time, while electric vehicles are still scarce.

The government has been keen to promote electric vehicles as the cars on Greece’s roads are among the oldest in Europe. Its aim is for electric cars to account for 30% of vehicles on Greek roads by 2030.

Tax breaks go beyond those already available for the purchase of zero- or low-emission vehicles; according to the IAPR document, they have been extended to the use of electric vehicles. The incentives also extend to those who produce electric vehicles and all kinds of accessories, in order to kick-start a viable Greek industry, something that has never happened before.

For the producers – either companies, or, less likely, individuals – their tax rate on the income gained from this particular activity is reduced by 5%, whatever tax bracket they fall into. The tax applies only from the year this particular activity shows profit; prior to that, it is completely exonerated. The tax reduction is maintained up to and including the fifth year of profitability.

For employees, the cost of compensation they receive from their employers for charging an electric or a low-emissions vehicle (up to 50g of CO2/km) while on company business is not considered as earned income.

Likewise, the use of a company electric or low-emissions car by an employee, partner or shareholder in the enterprise is not considered income for the first €40,000 of the value of the vehicle’s pre-tax retail price. Company cars worth more than this amount are taxed as compensation in kind.

It is also not considered compensation in kind to charge one’s car at the employer’s property for free.

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