Electric Vehicle Benefit-in-Kind 2025: A Guide to the New 70% Deduction
Despite rising rates, electric vehicles remain the clear favorite in 2025. The government is maintaining an exceptionally favorable tax regime for 100% electric vehicles.
A new 70% tax exemption offsets much of this increase, confirming the government’s commitment to supporting the energy transition in corporate fleets.
- AEN, New
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How does the new 70% deduction work?
The calculation of the benefit in kind for an electric vehicle provided to an employee is now carried out in two steps:
- Calculation of the “gross” AEN: the new, increased rates for 2025 are applied (for example, 15% of the vehicle’s purchase price, including tax).
- Application of the 70% exemption: The resulting amount is then reduced by 70%, up to an annual limit of €4,582.
Example:
Let’s consider the case of an electric vehicle purchased for €60,000:
Gross benefit in kind for 2025: 15% (purchase price) × €60,000 = €9,000
70% deduction: €9,000 × (1 – 70%) = €2,700
Since the annual cap is set at €4,582, the final AEN amount is indeed €2,700.
Comparison with the previous system:
Before 2025, with a lower rate but a 50% reduction, the AEN resulted in a very similar amount. In other words, the new system almost fully offsets the increase in the scales, while making the rules easier to understand.
Note: Flat rate vs. actual cost—a crucial point
A technical but essential detail: the 70% exemption applies only if the benefit in kind is valued using the flat-rate method.
Assessment Method | Tax deduction rate | Annual limit | Comment |
Flat rate | 70 % | 4 582 € | The most cost-effective option for EVs |
Actual expenses | 50 % | 2 000,30 € | Less favorable, but possible if costs are low |
Tip: To maximize the tax benefit, it is therefore recommended to opt for the flat-rate calculation, provided the vehicle meets the eligibility criteria.
The eligibility requirements for this preferential program
This program does not apply automatically: certain specific conditions must be met.
The “environmental score”: the new must-have requirement
Starting February 1, 2025, all electric vehicles made available must achieve a minimum environmental score to qualify for the 70% tax credit. This score, calculated based on several criteria (carbon footprint, recyclability, source of materials, etc.), is intended to encourage the use of vehicles that are more environmentally friendly throughout their entire lifecycle.
Other rules to know
Electricity costs covered by the employer for charging the vehicle are excluded from the calculation of the benefit in kind.
The program has been extended through December 31, 2027, providing businesses with long-term certainty.
In 2025, despite the increase in AEN rates, the preferential treatment for 100% electric vehicles will not only be maintained but also expanded. Thanks to the 70% tax credit (capped at €4,582), employers can continue to benefit from very favorable tax treatment on their electric vehicles.
Two key points to keep in mind:
- Choose the flat-rate valuation to take full advantage of the deduction.
- Check the vehicle's environmental rating before it is made available.
As a result, electric vehicles remain a strategic and sustainable choice for corporate fleets.
