Tax benefits for hybrid cars in 2023 and more

Earlier this year, the fleet tax for company cars was given a makeover. For instance, new regulations were introduced to scale back the tax benefits for hybrid cars and, in time, even eliminate them.

But how much longer will the hybrid company car remain appealing? What if you drive a hybrid now or just ordered one? And when will the tax benefit cease to exist entirely?

In this blog, you will get an answer to those questions. Discover everything you need to know about the deductibility of hybrid cars in 2023 and the future.

What kind of hybrid cars are there?

Before we dive into the tax laws, we’ll give you an overview of the different kinds of hybrid cars. There are three different types: full hybrids, mild hybrids and plug-in hybrids.

These all have a combustion engine and an electric engine. But the difference lies in the way both engines are used and charged.

• For full hybrids, the combustion engine and the electric engine can be used separately to drive. When a full hybrid uses its combustion engine, the electric engine charges automatically.
• For mild hybrids, the electric engine supports the combustion engine. This type, too, charges the electric engine automatically when the car is using the combustion engine.
• For plug-in hybrids, the combustion engine and the electric engine can also be used separately. The electric engine also charges while driving, but can be charged with an external source (plug or charging point).

 

What is the current fleet tax on hybrid cars?

Tax benefit for cars

According to the current regulations, all registered hybrid cars are deductible until 2031 for a maximum of 100% and a minimum of 50%. These regulations will still be in force in the future for all cars ordered before the 1st of July 2023.

The actual tax benefit is calculated with a formula. That formula takes the CO₂ emissions of cars into account and – of course – delivers a less favourable result for cars with a greater impact on the environment. The more polluting your car is, the lower the tax benefit percentage.

Hybrid cars with ≤ 45 g/km CO₂ emissions are 100% deductible. Hybrid cars with ≥ 200 g/km CO₂ emissions are 40% deductible.

The average tax benefit percentage for hybrid cars is 95%.

Tax benefit for fuel and charging costs

Additionally, the fuel and charging costs of hybrid cars are also deductible (for now).

For instance, the fuel costs for plug-in hybrids ordered between the 1st of January 2023 and the 1st of July 2023 are 50% deductible until the 31st of December 2026.  For the fuel costs of full and mild hybrids, the same tax benefit percentage applies as the one for cars.

The charging costs for plug-in hybrids ordered from the 1st of January 2023 onward will remain 100% deductible until 2024.

 

What are the future regulations?

Hybrid cars ordered between 1/7/23 and 31/12/25

Hybrid cars ordered between the 1st of July 2023 and the 31st of December 2025 will be deductible for a maximum of 100% and a minimum of 50% until 2024.

As of 2025, the maximum deductibility of the cars will diminish annually by 25% (0% as of 2028). When it comes to full and mild hybrids, the same goes for the fuel costs. The minimal tax benefit for cars will be eliminated entirely after 2024 (0% as of 2025).

For plug-in hybrids, the maximum tax benefit of the charging costs will annually diminish by 25% from 2025 onward (0% as of 2028). For the fuel costs, that won’t be the case until 2026 (0% as of 2028).

The CO₂ contribution for hybrid cars, ordered as of the 1st of July 2023, will systematically rise until 2031. The minimal contribution, for instance, will increase as of 2025 until it reaches a maximum of €31.15, but it will also be multiplied by a factor of 2.25 (2023), increasing to 5.5 (2031).

Hybrid cars ordered after 1/1/26

All hybrid cars ordered after the 1st of January 2026 will no longer be deductible. In other words: as of 2026, it will NO LONGER be tax-efficient to order hybrid company vehicles.

 

Here’s what you need to know:

Are you and your employees driving a hybrid? Not to worry. They will be as beneficial as they get until the end of 2031.

Would you like to order or lease a new hybrid car? You may want to do that before the 1st of July 2023 if you want to enjoy an optimal tax benefit until the end of 2031. If you order or start leasing after that date, the tax benefit percentage of the cars will decrease annually from 2024 onward. Moreover, they won’t be deductible as soon as we enter 2028.

Are you looking to get a maximum tax benefits for your fleet in the future? Then you may want to consider electric driving. You can ease into this by trying out electric leasing. 

Electric cars ordered before the 1st of January 2027 will, after all, remain 100% deductible until 2031. For electric cars ordered on the 1st of January 2027 or after that, the tax benefit will decrease annually. But it won’t be eliminated completely like it will be for the hybrid cars (minimum tax benefit percentage of 67,5% in 2031).

Want to know more about this new fleet tax?

The new tax regulations for company vehicles don’t just apply to hybrid cars. The fiscal playing field also changes for diesel, petrol and (full-)electric cars.

Discover the complete overview of the new taxation for company vehicles in our last blog post or our tax flyer 2023.