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Tax Reliefs

Dáil Éireann Debate, Tuesday - 3 November 2020

Tuesday, 3 November 2020

Ceisteanna (420)

John Lahart

Ceist:

420. Deputy John Lahart asked the Minister for Finance the changes that have been made to benefit in kind in respect of electric vehicles; if he will address a potential anomaly (details supplied); and if he will make a statement on the matter. [32882/20]

Amharc ar fhreagra

Freagraí scríofa

I made no changes to the BIK regime for company vehicles in Budget 2021. The Deputy may be referring to changes made in Budget 2020 where provision was made to introduce a CO2 based vehicle BIK regime from 2023.

In recognition of the need to further incentivise the uptake of electric vehicles, in Finance Act 2017 I provided for an exemption from benefit-in-kind for employees or Directors provided with a company electric vehicle for private use. In Finance Act 2018 in order to ensure better value for money I limited this exemption to the first €50,000 of the original market value (OMV) of the electric vehicle.

What this means is that an employee or Director, who as part of their remuneration package is provided with an electric car for their private use, where that car has an original market value of €50,000 and will be a low mileage car, will avoid paying PAYE, PRSI and USC on €15,000 of notional income for every year they have the electric car.

This is an exceptionally generous BIK EV regime and by end 2022 it will have been in place 5 years. This is in addition to the €5,000 EV SEAI buyers grant and the €5,000 EV VRT relief that companies benefit from when they acquire electric vehicles.

In Finance Act 2019 I provided for the introduction of a CO2 based vehicle BIK regime from 2023, where the BIK rate for low emission cars ranges from 9% to 22.5%. This current rate for low mileage cars is 30%. The current EV BIK exemption on the first €50,000 OMV is scheduled to lapse at end 2022 - so at a minimum it has a further two years to run.

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