Electric vehicles: the 40,000 euro limit does not affect BEV models

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the valuation of benefits in kind for the use of company vehicles. The controversy centered on whether the market value limit established in the regulations affected all vehicles with energy efficiency reductions or only certain types.

What the DGT has resolved

The ruling analyzes the application of Article 48 bis of the Personal Income Tax Regulations (RIRPF). The DGT has determined that the 30 percent reduction in the valuation of energy-efficient vehicles is applicable to three categories: battery electric vehicles (BEV), extended-range electric vehicles (E-REV), and plug-in hybrid vehicles (PHEV).

However, the ruling establishes a crucial distinction regarding the valuation cap. The limit of 40,000 euros in market value (before taxes) is only applicable to the plug-in hybrid vehicle (PHEV) category. This means that for battery electric models (BEV) and extended-range models (E-REV), there is no such value ceiling to access the reduction.

What this means for you

This pronouncement has a direct impact on the amount of benefit in kind that the employee must declare. For those employees using battery electric vehicles (BEV), the 30 percent reduction in valuation will be applied to the market value of the vehicle, without the price of the vehicle preventing the benefit of the reduction by exceeding 40,000 euros.

In the case of plug-in hybrid vehicles (PHEV), the regulations remain restrictive: if the market value of the vehicle exceeds 40,000 euros, the 30 percent reduction cannot be applied.

What should be done

It is necessary to analyze the composition of the benefit in kind for employees who have company vehicles. The technical distinction between a BEV model and a PHEV determines the tax burden that the worker must assume. It is recommended to assess the technical nature of the assigned vehicles to ensure that the valuation of the benefit in kind strictly adheres to the provisions of the DGT and the Personal Income Tax (IRPF) regulations.