Self-employed professionals: reduce your business costs with an electric vehicle

July 27, 2023
Electric cars

With the various measures put in place in France, Europe and around the world to reduce CO2 emissions, we're seeing many motorists making the energy transition. In fact, the French automotive market is in constant evolution between January and June 2023: Avere-France reports a 41.7% increase in registrations of electric and plug-in hybrid vehicles compared with the 1st half of 2022.

With inflation on the rise, it's essential for professionals to take into account the business costs of an electric vehicle, by considering, for example, the the cost of recharging the vehicle while keeping cash flow under control.

As vehicles are an almost indispensable means of transport for the self-employed, no matter how often you travel, we are going to give you a few tips on how to reduce your business costs thanks to electric vehicles.

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How much does an electric vehicle cost for a self-employed professional?

Before getting to the heart of the matter, let's take a look at the different costs involved in owning an electric vehicle. When you own a "clean" vehicle, the costs to be expected are as follows:

Mileage costs

Depending on the type of vehicle and engine, mileage rates have been defined by the tax authorities, and since 2021 a 20% increase in mileage allowances has been applied to electric vehicles.. This is a tax advantage. In 2022, this increase was raised to 10%.

Here's a table to help you calculate the mileage costs of an electric vehicle for business travel:

Administrative power (HP)	Distance "d "* from 1 to 5,000 km	Distance "d" from 5,001 to 20,000 km	Distance "d" greater than 20,001 km
3 HP and less	d x 0.529	(d x 0.316) + 1,065	d x 0.370
4 CV	d x 0.606	(d x 0.340) + 1,330	d x 0.407
5 CV	d x 0.636	(d x 0.357) + 1,395	d x 0.427
6 CV	d x 0.665	(d x 0.374) + 1,457	d x 0.447
7 CV and more	d x 0.697	(d x 0.394) + 1,515	d x 0.470

*The unit (d) corresponds to the distance covered in kilometers.

For example, if 3,000 km were driven for business purposes in 2022 with a 5 HP vehicle, the service provider could claim actual expenses of €1,908 (3,000 km x 0.636).

Liberal profession: deductible electric vehicle expenses

As a self-employed professional, you can deduct the cost of purchasing an electric vehicle from your taxable income.

When a self-employed professional wishes to acquire an electric vehicle for business purposesthis can be treated as a business asset, and the costs of acquiring and maintaining the electric vehicle can be deducted. On the other hand, if the vehicle is registered as a private asset, the conditions for deduction will vary.

Business expenses: recharge costs

When owning an electric vehicle, it's essential to think about recharging costs. There are 2 ways of doing this:

deduct the cost of electricity consumption if the vehicle is the vehicle is recharged at home
if recharging is carried out at public recharging points, the recharging costs do not need to be deducted. For accounting purposes, you need only keep your charging invoices in a safe place.

Liberal professionals and electric vehicles: insurance and maintenance costs

To cover all kinds of risks associated with electric vehicles, you need to insure your vehicle, and this also requires an investment. Considered as an expense, insurance costs can be deducted from taxable business income.

As mentioned above, if the electric vehicle is leased, insurance costs can be included in the rental price and are therefore less of an expense for the lessee.

This also applies to vehicle servicing costsincluding maintenance and repair.

Electric vehicles: bonus to further reduce business expenses

Did you know that financial aid is available to help you cut business costs even further? Assistance is available for both private individuals and professionals.

Electric vehicles: national and local financial assistance

On the one hand, you have the financial assistance offered by the French government to encourage motorists to switch to electric mobility.

ecological bonus For buyers and lessors (with a lease contract of more than 2 years), the ecological bonus is capped at €3,000 for legal entities for the acquisition of a low-polluting vehicle. For the ecological bonus to be accessible, the purchase cost of a vehicle must be up to €47,000 at a rate of 27% all taxes included,
conversion bonus In addition to the ecological bonus conversion bonus is also available. The principle is that by scrapping an old combustion-powered vehicle, the motorist can obtain a bonus of up to €4,000 to buy a new or used electric vehicle. What's more, the ecological bonus and the conversion premium can be combined,
additional premium for individuals and professionals living or working in a ZFE-m (Low Emission Mobility Zone), they can obtain €1,000,
local aid Local grants: many regions, départements and towns offer grants to encourage people to switch to electric mobility and install charging stations. The amounts vary from one locality to another. These local subsidies can also be combined with the aforementioned schemes,
advenir : Advenir is designed to help motorists install install charging stations for their electric vehicles,
TVS applicable to internal combustion engine vehicles electric vehicles are exempt from the TVS (Taxe sur les Véhicules de Sociétés), as they are "clean" and emit less than 20 g/km of CO2. This is a good way of reducing business expenses,
tolls If self-employed professionals regularly travel by electric vehicle and use toll roads, a 5% discount on the price of an electronic toll tagfor 1 year on selected freeways in France, with no minimum number of round trips:
- SANEF/SAPN network
- APRR/AREA network (north-eastern France)
- ATMB (Autoroute et Tunnel du Mont Blanc) network: until December 31, 2023, this network offers an even higher discount of 70 % for electric vehicle drivers, with an annual subscription of €1.90.

Since 1ᵉʳ February 2023, this discount has been in place for electric vehicles, to cope with inflation in tolls, fuel and electricity.

In fact, we've listed a few tips to help you cope with the increase in electricity and help you recharge your electric vehicle.

zero-rate mobility loan (PTZ-m) Since January 1, 2023, the French government has offered a zero-rate loan for the purchase of an electric vehicle weighing up to 2.6 tonnes and emitting less than 50 g/km of CO2. The aim of this scheme is to borrow a sum without paying interest.

A few conditions must be met to benefit from this credit:

- be an individual with a reference tax income per unit of up to €14,089,
- be a legal entity with fewer than 10 employees, and annual sales or balance sheet total for the previous financial year of less than or equal to €2 million,
- be domiciled in or near a low-emission mobility zone (ZFE-m) (for individuals or companies),
- the purchase cost under a long-term or leasing contract must be €47,000 inc. VAT for a passenger car and €60,000 inc. VAT for a light truck (before deducting state aid).

To find out which grants you are eligible for, you can run a simulation on our online platform.

If you need more information about state aid for the liberal professions for the purchase of an electric vehicle.

Business expenses: leasing an electric vehicle

Owning an electric vehicle for a liberal profession can be achieved either by purchasing or leasing. Choosing leasing an electric vehicle can help reduce business costs.

As a reminder, leasing can be done by :

For professional use, we suggest that you opt for a long-term lease (LLD). This allows you to deduct the costs associated with leasing and maintaining your electric vehicle. What's more, it maximizes theamortization of the electric vehicle and reduce tax costs.

Regardless of the type of financing you choose, leasing an electric vehicle offers a number of advantages, including :

with a fixed rent known in advance, it will be easier to control the company's cash flow,
the owner offers a wide choice of electric vehicles. In this case, it will be easier for the lessee to choose a vehicle that meets the needs of the company and its employees, if there are any,
the lessee can change vehicles on a regular basis. As business needs evolve, so do electric vehicles, in terms of equipment, comfort and technology,
services are included in the rent, such as maintenance and insurance for the electric vehicle
by leasing a vehicle, you don't have to worry about reselling it. That's one less thing to worry about.

To find out more : depreciation on leasing: how does it work?

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Tax incentives for electric vehicles

With an electric vehicle, business expenses can also be reduced in tax terms. Firstly, with the total or partial exemption of the proportional regional tax on the electric car registration document.

In this case, here are the costs and taxes for the registration certificate depending on the region:

Regions	Price per CV	Clean vehicle exemption
Île-de-France	46,15 €	100 %
Burgundy-France-Comté	51 €	100 %
Corsica	27 €	100 %
Nouvelle-Aquitaine	41 €	100 %
Hauts-de-France	33 €	100 %
Auvergne-Rhône-Alpes	43 €	100 %
Normandy	35 €	100 %
Pays-de-la-Loire	48 €	100 %
PACA	51,20 €	100 %
Grand-Est	51,20 €	0 %
Occitanie	44 €	0 %
Brittany	55 €	0 %
Centre-Val de Loire	49,80 €	50 %
Guadeloupe	41 €	0 %
French Guiana	42,50 €	0 %
Reunion Island	51 €	0 %
Martinique	30 €	0 %
Mayotte	30 €	0 %

Good to know: if a taxpayer wishes to install an electric vehicle charging station in their home, they are entitled to a tax credit, regardless of income (MaPrimeRénov'). This scheme, which was due to expire in December 2023, has been extended by 2 years for costs paid up to December 31, 2025.

Conclusion

At a time when electric vehicles are being touted as one of the solutions to global warming, it's essential for all professionals to make their energy transition. For the self-employed, electric vehicles are also accessible, whatever your professional activity, and at a reduced cost by applying the various aids offered by the State and the region.

We also have 6 electric cars for the liberal professions.

To find out more, find out how tax-exempt your electric car in 2023 as a self-employed professional.