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For Written Answer on : 15/09/2021
Question Number(s): 263 Question Reference(s): 43300/21
Department: Finance
Asked by: David Stanton T.D.


To ask the Minister for Finance his plans to extend the benefit-in-kind exemption for electric vehicles beyond the current date of 31 December 2022; and if he will make a statement on the matter.


In Finance Act 2019 I legislated for a CO2-based benefit-in-kind (BIK) regime for company cars from 1/1/2023. From that date the amount taxable as BIK remains determined by the car’s original market value (OMV) and the annual business kilometres driven, while new CO2 emissions-based bands will determine whether a standard, discounted, or surcharged rate is taxable. The number of mileage bands is reduced from five to four.

I believe that better value for money for the taxpayer is achieved by curtailing the amount of subsidies available and building an environmental rationale directly into the BIK regime. It was determined in this context that reforming the BIK system to include emissions bands provides for a more sustainable environmental rationale than the continuation of the current system with exemptions for electric vehicles.  The 0% BIK rate forms part of a broader series of very generous measures to support the uptake of electric vehicles, including a reduced rate of 7% VRT, a VRT relief of up to €5,000, low motor tax of €120 per annum, SEAI grants, discounted tolls fees, and 0% BIK on electric charging.

The BIK exemption was intended as a temporary measure and is set to end at year end 2022, coinciding with the onset of the new BIK regime on 1/1/2023. Electric vehicles will benefit from a preferential rate of BIK, ranging from 9 – 22% depending on mileage. ICE vehicles will be subject to higher BIK rates, up to 37.5%. This new structure with CO2-based discounts and surcharges will incentivise employers to provide employees with low-emission cars.

As the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.