If there is one topic that has been closely watched recently, it is the future of the benefit-in-kind (BIK) regime for electric company cars in France. This measure, initially due to end on 31 December 2024, has indeed been extended into 2025. Here is an overview of the latest developments.
Since the publication of the order of 25 February 2025, the rules for valuing benefits in kind for electric cars have changed. Here are the main points to remember for companies that provide EVs to their employees.
Background and regulatory changes
The 50% allowance on benefits in kind is one of the flagship tax levers to encourage employers to bring more electric vehicles into their fleets.
Extending this tax allowance aims to offset the higher cost of electric vehicles compared with combustion-engine models. Because the provision of an electric car is treated as a benefit in kind reduced by half, companies pay lower social security contributions, while employees keep more of their purchasing power.
Allowance extended and increased
The 50% tax allowance on the value of the benefit in kind remains in force for 2025, provided the vehicle is fully electric. The annual cap has been raised to €2,000.30.
A new flat-rate calculation grid
Since 1 February 2025, the value of the benefit in kind can be assessed on a flat-rate basis according to the vehicle's age and how it was acquired:
- For a vehicle purchased less than 5 years ago: 15% of the purchase price incl. VAT
- For a vehicle more than 5 years old: 10% of the price incl. VAT
- If the vehicle is leased or under a lease with purchase option: 50% of the total annual cost, or 67% if energy is paid for by the company
An additional 70% reduction applies if the vehicle has a favourable eco-score.
Covering home charging stations
If the company pays for the installation of a charging station at the employee's home and it is returned at the end of the contract, no benefit in kind needs to be declared.
If the charging station is not returned, an exemption applies up to:
- 50% of expenses up to €1,043.50 (charging station less than 5 years old)
- 75% of expenses up to €1,565.20 (charging station more than 5 years old)
Charging at work
On-site charging remains exempt until 31 December 2027.
