The tax advantages of electric cars for liberals
To save money as a self-employed professional, it's essential to be informed about all tax measures and conditions. tax conditions relating to the acquisition of an electric carwhether for professional or personal use.
See also : Automobile taxation for the self-employed: full guide
Ecological bonus
Between 2023 and 2024, the ecological bonus underwent changes, in particular following the decree of February 13, 2024:
- Abolition of the bonus for companies: one of the major changes is the abolition of the ecological bonus for companies when purchasing private cars. However, a €3,000 incentive remains for electric commercial vehicles.
- Bonus amount for individuals: the maximum amount of the ecological bonus for the acquisition of new electric and hydrogen vehicles by individuals has been adjusted to €4,000 in 2024, compared with €5,000 in 2023 for individuals with a reference tax income per unit in excess of €15,400. For the most modest households (with a reference tax income per unit of less than €15,400), the amount of the bonus remains unchanged at €7,000.
- Introduction of an environmental score: a minimum environmental score of 60/100 is now required to qualify for the bonus, underlining the importance of the vehicle's overall environmental impact. The aim is to encourage local and European production.
- Changes to eligibility conditions: the bonus only applies to vehicles with a purchase price not exceeding €47,000 and a mass of less than 2.4 tonnes. These conditions have not changed since 2023, but the introduction of the environmental score is a new requirement.
Also read → Ecological bonus 2023: everything you need to know
Comparative table of the 2023 vs. 2024 ecological bonus
| Ceiling 2023 | Ceiling 2024 | |
|---|---|---|
| New electric or hydrogen car - RFR> €15,400 | 5 000 € | 4 000 € |
| New electric or hydrogen car - RFR≤ €15,400 | 7 000 € | 7 000 € |
| New electric or hydrogen car - legal entity | 3 000 € | - |
| Used electric or hydrogen cars | 1 000 € | - |
| New electric or hydrogen-powered light commercial vehicle -RFR > €15,400 | 6 000 € | 5 000 € |
| New electric or hydrogen-powered light commercial vehicle -RFR ≤ €15,400 | 8 000 € | 8 000 € |
| New electric or hydrogen-powered light commercial vehicle - legal entity | 4 000 € | 3 000 € |
| Used electric or hydrogen-powered light commercial vehicles | 1 000 € | - |
| New 2- or 3-wheel vehicle or electric quadricycle ≤ 3 kW | 100€ | 100€ |
| New 2- or 3-wheel vehicle or electric quadricycle ≥ 3 kW | 900€ | 900€ |
The conversion bonus
Another government incentive for self-employed professionals is the conversion premium, which can be combined with the ecological bonus.
As a self-employed professional, you can benefit from the conversion bonus when you scrap your old combustion engine vehicle and switch to an electric car.
The aim of the conversion bonus is to help all motorists, private and professional alike, to make a successful transition from electric to electric vehicles.
The 2023 conversion premium amounts to 2,500 € for legal entitiesfor the purchase of a 100% electric vehicle.
In addition, the conversion bonus is €2,500 and can be as much as €6,000 for the purchase of an electric vehicle. less than or equal to €47,000 and if your reference tax income is less than or equal to €14,089.
In addition, to encourage the switch to electric vehicles, conditions for scrapped vehicles have been relaxed. The following are now eligible for scrappage all Crit'Air 3 vehiclesvehicles, i.e. all diesel cars registered before 2011 and petrol cars registered before 2006, are eligible for scrappage.
See also : Everything you need to know about the conversion bonus in 2023
Please note that if your professional activity takes place within a Low Emission Zone (ZFE) and you make business trips within this zone, you can also benefit from additional regional aid, in addition to the conversion bonus.
This assistance takes the form of a bonus of up to €1,000granted by the local authority.
See also : Low-emission zone (ZFE): what impact for private individuals and businesses?
The conversion premium mainly concerns :
- conditions of eligibility: in 2024, to qualify for the conversion premium, the reference tax income (RFR) per unit must not exceed €24,900. This change introduces an upper limit for eligibility, thus favoring households on modest incomes. In addition, the vehicles eligible for this bonus are restricted to new electric or hydrogen-powered passenger cars or vans, with the eligibility of used vehicles severely restricted.
- Bonus amounts: the amount of the conversion bonus for the purchase or lease of an electric or hydrogen car, or a combination of the two, can reach 80% of the acquisition cost, up to a maximum of €6,000, for individuals meeting certain income and commuting distance conditions. In all other cases, the amount is set at €2,500, again depending on income. These amounts are adjusted to encourage the purchase of clean vehicles by people on lower incomes or with greater mobility needs.
- polluting vehicles to be scra pped: to benefit from the bonus, the old polluting vehicle to be scrapped must belong to certain categories and have been registered before specific dates, depending on the type of fuel. This condition remains in line with the aim of the bonus to encourage the replacement of more polluting vehicles with cleaner options.
- reduction of the bonus for certain categories: the conversion bonus has been adjusted to reduce or eliminate aid for the purchase of certain types of vehicle, notably those costing more than €47,000 or weighing more than 2.4T. The aim of this measure is to target aid towards more affordable, and potentially more environmentally-friendly, electric or hydrogen-powered vehicles.
Deductible electric car expenses for self-employed professionals
Self-employed professionals can deduct the cost of purchasing an electric car directly from their taxable professional income.
As a self-employed professional, you can deduct a certain number of taxes and duties on the purchase of an electric car for your business.
If you're a self-employed professional, acquiring your electric vehicle as a business asset will enable you to deduct a certain number of related to the purchase and maintenance of your vehicle.
If, on the other hand, you decide to register your electric vehicle as a private asset, the conditions for deducting expenses will vary.
As far as private assets are concerned, expenses relating to the ownership of your vehicle will no longer be deductible. In addition, only running costs of your electric car, i.e. expenses relating to the charging ormaintenance and repairs.
We'll now look at all the deductible expenses for your business electric vehicle.
To this end, it's essential to determine which deduction method you'd like to use for your vehicle.
You have the choice of basing your deduction on mileage allowances, or on actual expenses for your business electric vehicle.
We will now look at the terms and conditions relating to each of these two deduction methods.
Kilometric allowances in 2024
The first type of deduction will apply to mileage allowances.
Published annually by the tax authorities, the mileage allowance is a scale based on the vehicle's tax rating and the number of kilometers driven each year in the course of professional activity.
If you use this deduction method for your vehicle, you will be able to claim a significant deduction for expenses incurred in purchasing your electric car, as well as for vehicle ownership costs.
Kilometric allowances will therefore enable you to cover the following costs:
- Depreciation (as owner) or rent (as tenant)
- Battery rental
- Regular maintenance and repairs
- Electricity for recharging
- Tires
- Insurance
As a result, opting for the mileage-based scale is often the most tax-efficient solution for self-employed professionals.
2024 mileage scale for electric cars
| Administrative power | From 0 to 5,000 km | From 5,001 to 20,000 km | > 20,000 km |
|---|---|---|---|
|
3 HP and less |
d * 0.529 * 1.20 |
(d * 0.316) + 1065 * 1.20 |
d * 0.370 * 1.20 |
|
4 CV |
d * 0.606 * 1.20 |
(d * 0.340) + 1330 * 1.20 |
d * 0.407 * 1.20 |
|
5 CV |
d * 0.636 * 1.20 |
(d * 0.357) + 1395 * 1.20 |
d * 0.427 * 1.20 |
|
6 CV |
d * 0.665 * 1.20 |
(d * 0.374) + 1457 * 1.20 |
d * 0.447 * 1.20 |
|
7 CV and more |
d * 0.697 * 1.20 |
(d * 0.394) + 1515 * 1.20 |
d * 0.470 * 1.20 |
Actual costs
However, if you do not wish to deduct your expenses on the basis of mileage allowances, it is also possible to choose to deduct actual expenses.
In this case, the deduction method works in the same way as for all other expenses.
You'll need to keep all your invoices to justify your actual costs, for each and every expense incurred.
However, the complexity of actual expenses arises if you plan to use your combustion-powered vehicle for both business and private purposes.
In such a situation, it quickly becomes tedious to separate expenses incurred on a professional basis from those incurred on a personal basis.
As a professional, you're better off opting for the mileage-based deduction method.
As far as the VAT paid on the purchase of your electric car is concerned, please note that this is not deductible from your business expenses. is not deductible from your business expenses and therefore not recoverable. On the other hand, the VAT applied to your electricity consumption is fully deductible, up to 100%, unlike diesel or petrol, which is 80%.
Tax news for 2024 includes various adjustments to the tax and social framework for liberal professionals, such as the introduction of a European threshold for VAT exemption and changes to the management of the business value-added contribution (CVAE). These changes show a trend towards simplifying and lightening the tax burden for self-employed professionals, thereby facilitating their administrative and financial management.
Depreciation of your electric vehicle
Choosing an electric car as a business vehicle also saves on depreciation costs, compared with those for combustion vehicles.
As a self-employed professional, the depreciation of your electric car will result in a tax deduction for your company, enabling you to reduce your tax rate.
For zero-emission cars or cars with CO2 emissions of less than 20g/km, 30,000 in depreciation on the vehicle and its battery. The same ceiling also applies to healthcare professionals (nurses, doctors, etc.) using an electric vehicle in the course of their duties.
Purchasing an electric car as a self-employed professional allows you to benefit from a more advantageous depreciation ceiling.
Read also: The best electric cars for nurses
Please note that the depreciation period for your electric vehicle is between between 4 and 5 yearsdepending on the nature and conditions of use of your vehicle.
In addition, the car and its electric battery are depreciated separately, as the battery does not count towards the vehicle's depreciation rate.
Its value, defined according to its power, is thus depreciated separately, with no ceiling.
In addition, if you wish to lease your vehicle, we advise you to consider the long-term leasing (LLD) for your electric car.
Choosing a long-term lease means you can deduct the costs of leasing and maintaining your vehicle.
What's more, if you intend to use your electric car for your professional activities over a number of years, it's more advantageous to choose the long-term leasing option.
In addition, leasing your electric car will enable you to maximize the depreciation on your vehicle and thus reduce your tax bill at the same time.
See also : Depreciation on long-term leasing: how does it work?
Other deductible expenses
In addition, other costs relating to the acquisition and use of the electric car are eligible for a tax deduction for self-employed professionals.
We have listed them below:
- Loan interest linked to the purchase of the car:
As a self-employed professional, the loan interest linked to the purchase of an electric car is deductible from your taxable professional income.
This means that the interest paid on your loan dedicated to the purchase of your electric car can be deducted from your professional income tax. - Maintenance and repair costs (corresponding to all costs associated with the maintenance and repair of your vehicle, such as the cost of spare parts, labor and maintenance-related services).
- Insurance costs:
These include compulsory third-party liability insurance, as well as any additional insurance chosen to cover the risks associated with using the vehicle, such as fire or collision insurance. Insurance costs are a type of expense that will also be deductible from your taxable business income. - Electric car recharging costs :
If you recharge your electric vehicle at home, you can deduct the cost of electricity consumption.
If you recharge at public recharging points, in this case no deduction is necessary. All you need to do is keep the invoices showing your recharging costs, for accounting purposes.
Are you looking for the right electric vehicle for your professional needs? If you're still undecided as to which electrified model is best suited to your use and professional activity, don't hesitate to consult our article on the best 100% electric cars for the liberal professions.
Read also : 6 electric cars for the self-employed
In conclusion
We've seen how the purchase of an electric car as part of your professional activity can give rise to significant tax optimization, particularly in terms of deductible vehicle expenses.
Enough to convince you to opt for an electrified model as your professional vehicle.
If so, and you're thinking of buying or leasing an electric vehicle, don't hesitate to get in touch with our Beev experts, who will be able to answer your questions and guide you through your project.
