Taxes on company cars: updates


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The tax on company vehicles is abolished from 2022 and replaced by a two-year tax on the economic use of passenger vehicles. One is based on carbon dioxide (CO2) emissions and the other is based on the age of the vehicle. The rates of these two taxes are the same as the old tax on company vehicles with the same exceptions. Given the €15,000 reduction applied to the aggregate amount of taxes payable for all passenger cars of the same company, a large number of companies should have nothing to pay.

The first payment of taxes will be made in 2023 for vehicles used for business purposes during the 2022 calendar year, regardless of the dates of the fiscal year. The declaration and payment terms are adapted to the VAT regime. For companies subject to the normal real VAT regime, taxes must be declared and paid in January 2023. In the simplified regime, companies subject to VAT complete the annual VAT return formalities (CA 12 return, due in May 2023. The fiscal year is modeled on the calendar year).

Taxes on passenger vehicles apply to all companies subject to VAT, regardless of their legal status and activity (commercial, industrial, artisanal or liberal, etc.). These two taxes apply to companies, but now also apply to sole proprietors who benefit from the exemption.

TAX CHEATING CAR

Taxes apply to passenger cars marked “VP” in the vehicle registration documents, regardless of body type: sedan, family or utility station wagon, coupe, convertible, etc. These are M1 category vehicles intended for the transportation of passengers and not including more than eight seats in addition to the driver’s seat.

Also, vehicles of category N1 with “pickup” type (with at least five seats) or “van” (with at least two rows of seats) body are taxed. Vehicles are taxed immediately after they are used for economic purposes, regardless of the use declared by the company.

Thus, cars owned by a company and registered in France are used for economic purposes. These can be company-owned or long-term leased vehicles. Cars rented for a period not exceeding one calendar month or thirty consecutive days are free of charge.

Also, vehicles for which the company fully or partially pays the costs incurred by an individual (employee, manager, partner) in connection with their purchase, rental or use in the context of business trips are also taxed.

UNUSED CARS

Vehicles used by sole proprietors are subject to both taxes, but are nevertheless exempt. Cars rented for a period of one calendar month or thirty consecutive days are also exempted from the discount. The same applies to vehicles powered by electricity, hydrogen or a combination of both. Hybrid vehicles with carbon dioxide emissions of no more than 60 g/km are tax-exempt only for CO2 emissions.

TAX CALCULATION

The amount of taxes is calculated according to the annual ratio of the vehicle’s use for economic purposes. This rate is calculated in days, but the company can choose a quarterly lump sum calculation (25% of the number of three-month cycles of the car). This option will be removed in 2025. For vehicles used by employees or managers and subject to reimbursement by the company, the amount of taxes is affected by a coefficient determined by the number of kilometers traveled. Thus, when less than 15,000 km per year, no tax is charged for reimbursement of car expenses (0% rate).

Annual march Coefficient
From 0 to 15,000 0%
15,001 to 25,000 25%
25,001 to 35,000 50%
35,001 to 45,000 75%
More than 45,000 100%

The total amount of taxes payable for vehicles paid for by the company is finally reduced by €15,000. Tax rates for CO2 emissions are tabulated in Article L421-120 of the Goods and Services Tax Code. They range from 17 euros for 21 grams of CO2 emissions per kilometer to 7,747 euros for 269 grams of CO2 emissions per kilometer. Vehicle age tax rates vary by age and fuel.

Seniority tax Fuel Fuel
First registration year Diesel (€) Others (€)
since 2015 40 20
From 2011 to 2014 100 45
From 2006 to 2010 300 45
From 2001 to 2005 400 45
By the year 2000 600 70

Goods and Services Tax Code, L421-93 et ​​seq.

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