Electric car addition in 2023: this is what you have to pay

When do I have to pay the addition?

Addition only applies if you have a car available in the name of a company and with which you drive more than 500 private kilometers per year. It does not matter whether the car was bought or leased by the company.

Addition therefore does not apply to private individuals with a private car. You also do not have to pay an addition if you only use a company car for business trips. However, you must then be able to demonstrate with a conclusive overview of all business and private journeys that no more than 500 private kilometers were driven in an entire calendar year.

How much additional tax liability will I have to pay in 2023?

If you drive more than 500 private kilometers per year in a business car and therefore have to pay the addition, normally 22% of the catalog value of that car is ‘added’ to your annual income.

However, the government wants as many motorists as possible to opt for an emission-free car. To make the switch extra attractive, you pay a 16% addition for an electric car instead of 22%.

That 16% applies in 2023 (and 2024) only over a maximum of €30,000. Should the car be more expensive than €30,000, you will pay 22% additional tax on the rest of the amount.

The addition is determined at the time of registration and applies for a maximum period of 60 months. After that, the addition will be determined again on the basis of the rules that apply at that time.

Addition of electric car up to and including 2026

The discount on the addition for electric cars will be phased out until 2026. From 2026 there is no longer any benefit and you also pay the standard rate of 22% addition over the full catalog value for an electric car.

Addition of hydrogen car, hybrid and plug-in hybrid

Until 2026, the same addition rules apply to hydrogen cars as to electric cars, but without a maximum. The lower addition percentage is calculated over the entire catalog value.

There is no additional tax benefit for hybrid and plug-in hybrid models. For every car with a CO2 emission of 1 g/km or higher, you pay a 22% addition on the entire purchase amount.

Why pay the addition?

A company car that you also use for private journeys is considered by the tax authorities as a form of wages and you have to pay tax on wages. With the addition of a car, a certain amount is added to your annual income. You therefore pay for the private use of a business car in the form of additional income tax.

Do you not want to pay an addition? Then you must be able to demonstrate with a conclusive overview of all business and private journeys that no more than 500 private kilometers were driven in a whole calendar year. In the absence of proof, you risk an additional assessment including a fine from the tax authorities. Keep in mind that the choice between paying the addition or keeping a journey registration is only  can be made once per calendar year.

How do you calculate the additional tax liability in 2023?

Let’s take a €40,000 electric car as an example. In 2023, you may add 16% over a maximum of €30,000. For the remainder, an addition of 22% applies.

€ 30.000 x 0,16 = € 4.800
€ 10.000 x 0,22 = € 2.200

So in total you have to “add” €7,000. Then you multiply the addition amount by your income tax. In this example, we assume the tax rate of 37.07%. Then you end up with €7,000 x 0.3707 = €2,483.69 additional income tax per year.

So for a €40,000 electric car, you will pay €206.97 additional tax liability per month in 2023. We omit the effect on the tax credit. By way of comparison: for a petrol car of € 40,000 you pay € 271.85 per month.