Neale Richmond
Question:279. Deputy Neale Richmond asked the Minister for Finance the status of the benefit-in-kind changes on electric vehicles; and if he will make a statement on the matter. [52820/21]
View answerTuesday, 2 November 2021
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In this year's Budget I announced an extension of the BIK exemption for electric vehicles to end 2025, with a tapering mechanism on the vehicle value threshold.
The current BIK exemption will continue to apply to 31 December 2022 as currently provided for in the legislation. From 2023, the original market value (OMV) reduction for BIK purposes is progressively phased out until end 2025. This extension is in support of Government policy to incentivise the transition to electric vehicles, while the lead in time allows for fleet planning.
To end 2022, a full exemption of €50,000 for employer-provided electric vehicles with an OMV of €50,000 or less applies. For vehicles with an OMV above €50,000, a partial exemption applies whereby the OMV is reduced by €50,000 when calculating the cash equivalent for the car. The tapering mechanism works by progressively reducing this exemption over a further 3 years. The relief serves to reduce the OMV of the vehicle, for the purposes of determining the taxable cash equivalent, by €35,000 in 2023, €20,000 in 2024 and €10,000 in 2025. Any surplus OMV will be subject to BIK in accordance with the standard rates due to commence on 1 January 2023, which incorporates the vehicle’s emissions and mileage.
Full details are set out in the 2021 Finance Bill.