In brief
The 0.25% rule reduces the tax base for the personal use of all-electric company cars to one-quarter of the gross list price. It applies only up to a specified price cap.
Which vehicles are eligible?
Purely battery-electric vehicles and fuel-cell vehicles whose List Price (Gross) does not exceed a legally defined limit. If the price exceeds this limit, a 50 percent assessment may apply. For plug-in hybrids, a reduced assessment applies only if additional technical requirements are met.
What are the implications?
The Monetary Benefit (basic tax) is reduced to one-quarter of the 1% Rule (standard tax), as is the surcharge for trips to the primary place of work. For drivers, this means a noticeably lower monthly cost depending on the vehicle, making electric vehicles a more attractive option without the company having to cover the difference.
What does this mean for fleet planning?
The price cap acts as a limit on vehicle features. A vehicle that slightly exceeds this limit due to special equipment doubles the driver’s tax burden. Anyone seeking to promote electric vehicles should therefore incorporate this limit into their “Car Policy” (vehicle selection criteria) and tailor equipment packages accordingly.
The date of purchase or transfer of the vehicle is decisive for the application of this rule. Since the limit is set by law and can be adjusted, it is advisable to consult with a tax advisor before finalizing budgets.
Further reading
Fleet Management Without Excel Spreadsheets
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