Buying vehicles: costs and benefits for your company
There are several benefits companies can gain by buying electric, hybrid and plug-in vehicles, since all of the VAT on the electricity used to charge them is deductible. They can also deduct VAT on purchase, leasing and conversion costs, provided the vehicles are electric or plug-in hybrids, up to €62,500 and €50,000 respectively.
Are there benefits to buying CNG (compressed natural gas) vehicles?
Yes. However, for this type of vehicle the benefit is only 50%, and the purchase cost is capped at €37,500.
Vehicle Tax (ISV), unlike the annual Road Tax (IUC), is paid when the Portuguese registration plate is issued. The amount varies according to the vehicle’s CO2 emissions and engine capacity.
That said, some vehicles are exempt from ISV — fully electric cars, for example. Hybrid and plug-in hybrid vehicles with a battery that charges from the electricity grid, a minimum range of 50 km in electric mode and official emissions below 50 gCO2/km may qualify for reductions.
Companies are taxed differently depending on the purchase cost and the type of vehicle.
AUTONOMOUS TAXATION (TA) IN 2021
| Rate | Vehicle | Value |
| 10% | Passenger cars | <27.500 |
| 7.5% | GNV | <27.500 |
| 5% | Plug-in hybrids | <27.500 |
| 0% | Electric and goods vehicles | <27.500 |
| Rate | Vehicle | Value |
| 27.5%% | Passenger cars | 27.500€ ≤ x < 35.000€ |
| 15% | GNV | 27.500€ ≤ x < 35.000€ |
| 10% | Plug-in hybrids | 27.500€ ≤ x < 35.000€ |
| 0% | Electric and goods vehicles | 27.500€ ≤ x < 35.000€ |
| Rate | Vehicle | Value |
| 35% | Passenger cars | > 35.000€ |
| 27.5% | GNV | > 35.000€ |
| 17.5% | Plug-in hybrids | > 35.000€ |
| 0% | Electric and goods vehicles | > 35.000€ |
Note that if there is a tax loss in the tax period, the autonomous taxation applied to companies is increased by 10%.
In 2021, however, this will not apply to cooperatives or micro, small and medium-sized companies, provided that:
- They had taxable profit in one of the three previous tax periods
- They filed the Modelo 22 and IES returns for the two previous tax periods within the legal deadline
- They report a tax loss in the 2020 and 2021 tax periods, where these correspond to the tax period in which activity began or to one of the two following periods.
It is worth noting that buying electric vehicles in 2021 can be advantageous by applying for the zero-emission vehicle incentive, funded by the Portuguese Environmental Fund (Fundo Ambiental), with potential savings of between €2,000 and €3,000, depending on the type of car chosen.
