Taxation is changing following decree no. 2020-169 of 02/27/2020, which formally recognizes the application of a new emissions measurement system for internal combustion vehicles in France.
Taxation is being adjusted to factor in the new Europe-wide method to measure CO2 emissions: the Worldwide Harmonized Light Vehicle Test Procedure (WLTP).
Here are the three major changes that are applicable as of today:
The deductibility ceiling scale for depreciation recognizes registration based on the WLTP standard.
French company vehicle tax (TVS)
The French company vehicle tax (Taxe sur les véhicules de sociétés [TVS]) amount is equal to the sum of two components. The first is based either on the vehicle’s CO2 emissions rate or its tax horsepower. The second is based on the vehicle’s fuel type and the year it was first registered.
The AIR tax stays the same, at €20 for Petrol engines and similar products and €40 for Diesel engines and similar products.
N.B.: tax exemption cases are also changing, with a 12-quarter tax exemption period for Electric/Petrol, Electric/Natural Gas for Vehicles (NGV) and Electric/Liquefied Petroleum Gas (LPG) hybrids with emissions below 120 g/km.
The above-listed hybrids with emissions below 50 g/km are permanently exempt.
Electric/Diesel hybrids do not qualify for tax exemption.
Malus Écologique (French environment-related penalty system)
For vehicles that have undergone community-based certification or approval, penalties will apply henceforth from emissions starting at 138 g/km, in line with this grid.
Contact us for a further analysis of the tax impact on your car fleet or your future project.