The Federal Cabinet decided today (18 May 2016) that, as a rule, a purchase premium of EUR 4,000 will be paid for the acquisition of a fully electric vehicle (the federal government and industry each bear half of the subsidy – the responsible authority is the Federal Office of Economics and Export Control, Bafa, which will also disburse the premium). For plug-in hybrids, a premium of EUR 3,000 is granted.
Total funding is set at EUR 600 million; once these funds are used up, no further subsidies will be granted. Applications can be submitted online to the Bafa. The funding programme expires in 2019.
It was also decided that purchasers of a new, fully electric vehicle are to be exempt from motor vehicle tax for ten years from the date of initial registration.
In addition, benefits granted by employers to employees – for example, for charging a private electric or hybrid electric vehicle at the employer's premises – will be exempt from tax under the Income Tax Act.
Monetary benefits arising from the free or discounted transfer of charging equipment for such vehicles may also be taxed by the employee at a flat rate of 25%. These new rules are limited to the period from 1 January 2017 to 31 December 2020.
In parallel, a nationwide network of charging stations is to be established (funding guideline for charging infrastructure for electric vehicles in Germany).
Sources: Federal Government / BMF
Frequently asked questions
Frequently asked questions
How much is the purchase premium for electric cars and plug-in hybrids?
For the purchase of a pure electric car, a premium of EUR 4,000 is granted; for plug-in hybrids, the premium amounts to EUR 3,000. The federal government and industry each cover half of the subsidy. The Bundesamt für Wirtschaft und Ausfuhrkontrolle (BAFA) is responsible for disbursement, and applications can also be submitted online.
How long are electric vehicles exempt from motor vehicle tax?
Buyers of a new, fully electric vehicle are exempt from motor vehicle tax (Kfz-Steuer) for ten years from the date of initial registration. This rule is intended to create incentives for switching to electric mobility.
How is charging a private electric vehicle at the employer's premises treated for tax purposes?
Benefits granted by employers to their employees for the electric charging of a private electric or hybrid electric vehicle on company premises are tax-exempt under the EStG. The rule applies for a limited period from 01.01.2017 to 31.12.2020.
How is the transfer of a charging device from employer to employee taxed?
Non-cash benefits arising from the free or discounted transfer of a charging device for electric or hybrid vehicles may be taxed at a flat rate of 25% by the employee. This regulation applies for a limited period from 01/01/2017 to 12/31/2020.
What is the total budget of the electric vehicle subsidy and how long does it run?
The funding program has a total volume of EUR 600 million and runs until 2019. Once the funds are exhausted, no further premium will be paid out – applications are processed on a first-come, first-served basis.