Discover the main vehicle taxation changes in 2019.
Passenger vehicles used for a professional activity are subject to fluctuating tax measures. To help you make sense of all these measures and choose the right vehicle with the right financing method, here is a summary of France’s main vehicle taxation changes in 2019.
Among the measures to be noted at the start of this year :
• a modified eco tax schedule, the continued deductibility of VAT on petrol, and the extension of company car tax to 5-seater pick-ups. France’s eco tax, also referred to as the environmental bonus/malus, applies to new vehicles registered for the first time, whether purchased or rented.
• in 2019, the environmental bonus only concerns electric cars emitting less than 20g of CO2 per km. Hybrid cars are not eligible for this bonus.
As for the environmental malus, it is calculated to the nearest gram in line with a progressive scale. This year, it will apply for vehicles with a CO2 emission level greater than or equal to 117g per km, versus 120g per km in 2018.
• payment of company car tax
France’s company car tax (“taxe sur les véhicules de société” – TVS) comprises two components: the first depends on the vehicle’s CO2 emissions, the second on the vehicle’s age and fuel type. As in 2018, this tax is calculated over an annual fiscal period that coincides with the calendar year. It is payable at the same time – and pursuant to the same terms – as VAT.
Company car tax extended to pick-ups will also be subject to the environmental malus.
As far as VAT is concerned, owners of passenger vehicles used for a professional activity can deduct VAT on petrol purchases made since 2017. The recovery rate has changed from 20% in 2018 to 40% this year.
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