two new car taxes
From January 1, 2022, the tax on company vehicles (TVS) was replaced by two taxes on the use of vehicles for economic purposes:
- Tax on CO2 emissions;
- and tax based on age of vehicles.
Their payment is made in January of each year.
Who is responsible for CO2 emissions tax and vehicle age tax?
These taxes are paid by the following companies:
- keep vehicles reserved for economic purposes;
- or dispose of under a lease or security (a long-term lease, i.e. for more than one calendar month or for a period of 30 consecutive days);
- or assumes the cost of purchasing or using such vehicles.
According to the tax authorities, the concept of business implies the following:
- implementation of economic activity (CGI, article 256 A);
- and that this activity is subject to VAT (CGI, article 256 B).
However, the following are not affected:
- natural persons carrying out professional activities on their own behalf;
- certain economic activities: agricultural or forestry activities (according to de minimis agricultural regulations), public passenger transport, driving or piloting instructions, sports competitions;
- philosophical, religious, political, patriotic, civic or trade union organizations and non-profit organizations whose management is disinterested (while all these organizations are exempt from VAT).
Which vehicles are taxed?
These two taxes apply to passenger cars, namely (CIBS, article L. 421-2):
- to M1 category vehicles other than special purpose vehicles but including wheelchair accessible;
- Among the vehicles of category N1: with the body of a pick-up and having at least 5 seats and not designated for the operation of ski lifts and ski slopes only, including Vans with bodies that incorporate at least two rows of seats (or are likely to enter after easy handling) and are designated for the carriage of persons.
Motor vehicles used only for economic purposes fall within the scope of taxes levied on passenger cars. Specifically, this criterion is met when the vehicle fulfills one of the following conditions:
- must be leased by the company on a long-term basis or registered in France ;
- travel on a public highway with a company fully or partially responsible for the costs employment by a natural person to dispose of or use it;
- in cases other than the first two cases, to drive on a road in public use for the purpose of carrying out economic activities.
Which cars are exempt from these taxes?
|
Type of vehicle |
Vehicle age tax |
|
Circulation is permitted only for construction, marketing, repair or vehicle maintenance needs and does not carry out any other transport operation. |
Out of scope (not affected for economic purposes) |
|
They are immobilized or arrested at the request of state authorities |
Out of scope (not affected for economic purposes) |
|
It is wheelchair accessible |
Free |
|
Whose energy source is electricity, hydrogen, or a combination of both |
Free |
|
It exclusively affects the rental or temporary replacement of the customers’ immobilized vehicle |
Free |
|
Short-term rental (a period not exceeding one calendar month or thirty consecutive days) |
Free |
The energy source is electricity or hydrogen on the one hand and natural gas, liquefied petroleum gas, gasoline or superethanol E85 on the other, or hybrid vehicles that combine natural gas or liquefied petroleum gas on the one hand. , on the other hand, gasoline or superethanol E85 can benefit from a tax exemption for carbon dioxide (CO2) emissions, but is not taxed due to the age of the vehicles.
Declaration and payment
Formalities for declaration and payment of CO2 emissions tax and vehicle age tax depend on the company’s VAT status:
- subject taxpayers normal real diet those who are not liable for tax or VAT must declare the tax on n3310 annex A persons who are not liable for VAT by January 25, which they must submit during the January following the tax period;
- Taxpayers subject to the simplified VAT tax regime should use form 3517 (CA12). must be submitted for the year in which the tax is payable.
The tax authorities offer a calculation help sheet for each tax at impots.gouv.fr (form 2857-FC-SD and 2858-FC-SD respectively).
