Reform of benefits in kind: Take advantage of incentives for electric vehicles with CarFleet
The February 2025 reform of benefits in kind is designed to encourage French companies to switch their fleets to electric vehicles. It is now up to managers to determine when and in what order their employees can transition to zero-emission vehicles.
Human resources management is evolving following the publication of a decree on February 25, 2025, which appeared in the Official Journal on February 27. This decree amends the rules for assessing benefits in kind (BIK) for company vehicles, replacing the provisions that have been in effect since 2002. The new rules are thus much more favorable to electric vehicles, which companies are encouraged to adopt.
New rates, significant financial impacts
Effective February 1, 2025, all company-provided vehicles are subject to the new benefit-in-kind (BIK) rate schedule. Vehicles made available prior to that date remain subject to the previous rates.
The new rates are as follows:
- Leased vehicles : the rate increases from 30% to 50%, and in the case of reimbursement of fuel costs, from 40% to 67%.
- Purchased vehicles : the rate increases from 9% to 15% (10% for vehicles over five years old, up from 6% previously), and in cases where fuel costs are reimbursed, from 12% to 20% (15% for vehicles over five years old, up from 9% previously).
This increase has two main consequences:
- For the employee : It results in a higher tax and social security base, which can lead to higher taxes and a lower take-home pay.
- For the company : It results in an increase in the employer's social security contributions associated with these benefits.
It should be noted that the new provisions therefore make a fundamental distinction based on the date the vehicle was made available:
- Those available until January 31, 2025
- Those made available starting February 1, 2025
It is the date on which the vehicle is made available to the employee that determines the applicable tax treatment, not the date on which the company acquires the vehicle. As a result, company fleets will be characterized by a variety of applicable tax treatments, with the possibility that a vehicle’s tax treatment may change over the course of its useful life. This adds an additional layer of complexity for fleet managers to consider.
Clear incentives for electric vehicles
The AEN reform also introduces two other changes for vehicles made available since February 1:
- The tax deduction for electric company cars has been increased from 50% to 70%, effective through December 31, 2027. In exchange, the cap has been raised to €4,582 per year, up from €2,000.30 previously.
- This tax credit is now limited to electric vehicles that have received an eco-rating, that is, those that have met the environmental criteria (the ADEME website provides a list of eligible vehicles).
But the new provisions of the AeN are not limited to vehicles: charging stations are also affected.
Thus, the benefit in kind associated with an employer providing a charging station, or covering all or part of the costs of using it, is now authorized through December 31, 2027.
When the charging station is installed at the workplace, the benefit in kind resulting from its use by the employee for non-work-related purposes is valued at zero, including electricity costs.
For charging stations installed outside the workplace, the rules are different:
- If the employer covers all or part of the costs of purchasing and installing a charging station and the station is removed at the end of the employment contract, this coverage is excluded from the basis for calculating social security contributions.
- However, if the charging station is installed at the employee’s home and is not removed at the end of the contract, the cost is excluded from the base for social security contributions up to 50% of the actual expenses the employee would have incurred, with a cap of 1,043.50 euros. These limits increase to 75% of actual expenses and €1,565.20, respectively, for charging stations that are more than five years old.
- Finally, if the employer covers all or part of the other costs associated with the use of an electric vehicle charging station installed outside the workplace or the cost of renting a charging station (excluding electricity costs), this coverage is excluded from the basis for calculating social security contributions, up to 50% of the actual expenses the employee would have incurred.
Incentives that can only encourage employees and companies to switch to 100% electric vehicles… provided that their commutes, driving habits, and living situations allow for it. A fleet management tool like CarFleet can help fleet managers identify the drivers most likely to make the switch to electric vehicles.
CarFleet: Supporting the Transition to Electric Vehicles
Echoes’ CarFleet tool enables an in-depth analysis of the use of internal combustion and electric vehicle fleets within a company, thanks to real-time data generated and transmitted directly by the vehicles to the manufacturers. This data is collected by Echoes without the need to install any devices or make any modifications to the vehicles, thanks to agreements with all manufacturers, and is then processed, consolidated, and displayed in the interface.
This information is invaluable for understanding how the internal combustion engine fleet is used and identifying the drivers or vehicles that are the best candidates for conversion to electric vehicles. Echoes allows you to view the following information for each vehicle:
- Trip history (location, mileage, driving time)
- Average and total consumption
- How often to refuel
This data enables a detailed analysis of drivers’ habits and helps identify those who are most likely to switch to electric vehicles: employees who make short trips, those with low average fuel consumption who are aware of eco-driving practices, or those who keep their vehicles at home overnight and can potentially charge them at home.
However, regulations should not be the only reason companies switch to an electric fleet. Indeed, the superiority of zero-emission vehicles in terms of Total Cost of Ownership (TCO) is now well established. On this topic, long-term leasing company LeasePlan analyzed the European market and determined the average TCO of a car by taking into account the cost of fuel/energy, depreciation, taxes, insurance, and maintenance across 22 European countries*. It estimated that switching to electric vehicles could yield TCO savings of up to 24.5% compared to diesel. This is reason enough for a fleet manager to take a proactive stance in favor of this transition.
Find out now how CarFleet can simplify your fleet management and help you switch to electric vehicles with complete peace of mind.
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