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New guide reveals complex European tax picture

By Mark Salisbury
Monday, June 4, 2018 - 09:05

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In a challenging and complex European tax landscape, different tax regimes across different European countries make a uniform pan-European fleet policy virtually impossible. So says the 2018 Taxation Guide, which has been produced by Nexus Communication, publishers of Fleet Europe, in conjunction with global accountancy firm, PwC, and which is seen as an indispensible aid to helping fleet decision-makers draw up or adapt company car policies across Europe.

The 12th annual edition of the report paints a picture of tax complexity across the EU due to the differing tax laws of the individual member states; a situation it says is likely to continue, resulting in still more complex and inconsistent taxation of company cars.

Mobility alternatives increase this complexity, as companies’ car policies shift more towards general mobility policies. And new technologies – like those related to the ‘connected car’ – are often accompanied by a growing number of legal questions and uncertainties.  As a result, fleet policies need to be reviewed and adapted more and more frequently in order to keep pace with current legal and technological developments.

The guide also considers the ongoing impact of and fallout from the ‘dieselgate’ affair, and the fact that many companies face falling residual values for diesel vehicles. The guide says it remains to be seen whether individual Governments will grant tax relief in one way or another to compensate for this disadvantage.

One option may be to introduce a special rate of depreciation and spread the effects over several years, said Dr. Alexander Unfried, Global Automotive Tax Sector Leader at report authors, PwC.

“However, diesel vehicles still remain a very good operational and cost effective solution for fleets, especially compared to electric vehicles,” he added.

The guide looks at the tax treatment of EVs in different countries, as many grant tax advantages for their purchase and maintenance; and in some countries it is possible to depreciate the additional price attributable to the battery of an EV separately from the vehicle cost.

However, the guide does not expect to see a rapid change in the make-up of vehicle fleets, as the infrastructure for charging batteries is not guaranteed region-wide and additional recharging stations need to be installed in company car parks and elsewhere.

The 2018 Taxation Guide, which is being sponsored by Skoda and Volkswagen Financial Services, looks at the changes that have been made by Governments in 23 European countries in the taxation of company vehicles during the last 12 months.

And a useful section again includes an overview of the main changes that have been implemented in each country compared to last year. In France, for example, a supplemental tax for vehicles with high CO2 emissions has been introduced, while in Germany the new WLTP (Worldwide Harmonised Light Vehicle Test Procedure) can result in significantly higher vehicle taxes.

Fleet Europe editor-in-chief, Steven Schoefs, commented: “It is clear the old NEDC driving cycle was flawed and needed updating or replacing. The new WLTP procedure, however, turns out to be quite a challenge to implement. Many car models’ fuel economy suffers considerably and CO2 emissions rise in the new driving cycle. This will be felt generally in taxation and in leasing prices.”

The 23 countries covered in the printed version of the 2018 Taxation Guide are: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Russia, Spain, Sweden, Switzerland, Turkey and the United Kingdom.

The digital version expands this to 29, with those from the printed version plus the Baltic states of Estonia, Latvia, Lithuania and three Eastern European countries, Bulgaria, Slovakia and Slovenia.

The Fleet Europe Taxation Guide 2018 can be ordered at a price of €95 (excluding VAT) for the printed version and €85 (excluding VAT) for the digital version. Digitals versions per country can be also ordered at a price of €45 (excluding VAT.)  All are available through the Fleet Europe e-Shop at http://shop.nexuscommunication.be/

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