Company Car Taxation in 2019

The initial 2019 State Budget proposal envisaged a substantial rise in the special tax levied on company cars (known as autonomous vehicle taxation). In brief, the proposal set out the following:

• Vehicles with an acquisition value below 25 000 euros - an increase in the tax rate of 5 percentage points;
• Vehicles with an acquisition value of 35 000 euros or more - an increase in the tax rate of 2.5 percentage points.

Under the proposal, the rate for vehicles in the 25 000 euros to 35 000 euros bracket would have remained unchanged.

What would this measure have meant for your company?

An analysis was carried out using two vehicles with different acquisition values:

1. Acquisition value = 22 000 euros;
2. Acquisition value = 50 000 euros.

The proposed tax increase was assessed for both vehicles under the following conditions:

1. Without a vehicle-use agreement with the employee;
2. With a vehicle-use agreement with the employee.

The resulting figures are set out below:

1. Tax burden increase of 530 euros;
2. Tax burden remains unchanged;
3. Tax burden increase of 479,25 euros;
4. Tax burden remains unchanged.

However, this measure was not approved and, as a result, the tax burden on company cars will remain unchanged. Let us take a closer look.

Special taxation on company cars in 2019

The autonomous taxation rates for 2019 are therefore as follows:

• AV < 25 000 euros – Autonomous taxation = 10%;
• 25 000 euros ≥ AV > 35 000 euros – Autonomous taxation = 27,50%;
• AV ≥ 35 000 euros – Autonomous taxation = 35%.

Note: AV = Vehicle acquisition value.

Autonomous taxation rates for hybrid vehicles

For hybrid vehicles, the following rates apply in 2019:

• AV < 25 000 euros – Autonomous taxation = 5%;
• 25 000 euros ≥ AV > 35 000 euros – Autonomous taxation = 10%;
• AV ≥ 35 000 euros – Autonomous taxation = 17,5%.

Note: AV = Vehicle acquisition value.

Please note that these rates rise by 10 percentage points whenever your company reports negative results.

Vehicles powered exclusively by electric energy are exempt from this additional vehicle taxation.

Article available from UWU.

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Automotive Taxation. Every month, Razão Automóvel publishes an article from UWU Solutions on automotive taxation. It covers news, changes, key questions and the latest developments surrounding this subject.

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