A crackdown on company cars is coming and it will be retroactive. Taxation will change with the Budget from 1 January 2025, also for cars ordered this year. Aniasa estimates an average annual increase in the taxable value of the car benefit of 1,600 euros (+67%) and predicts a backlash on an already under pressure market.
The innovation introduced by the Budget Law is the taxation criterion, which will move from the system based on CO2 emissions to one that takes into account exclusively the type of fuel supplied by the vehicle. With this change, electric vehicles will benefit from a reduced tax rate of 10%, while for plug-in hybrid vehicles the rate will rise to 20%. Other vehicles, such as petrol and diesel ones, will be subject to a much higher tax rate, set at 50%. This new system strongly penalizes traditional combustion vehicles, including those with moderate emissions, between 61 and 160 g/km, for which the tax burden will be increased by 30% to 50%. The change will have a direct impact on costs for companies and employees, particularly for those who use company vehicles in mixed use.
Until now, the system for taxing company cars was based on CO2 emissions, dividing the vehicles into four bands with rates that varied from 25% to 60% depending on the level of emissions. The transition to a food-centric system in 2025 will upset these balances. While on the one hand vehicles with emissions above 190 g/km will see a reduction in taxation from 60% to 50%, those in the intermediate range will suffer an increase of as much as 20 percentage points. And all this also concerns the machines ordered in 2024, unless the Milleproroghe decree intervenes to remove the retroactivity of the provision.
Aniasa, the mobility association of Confindustria, speaks of a measure that will cause a “haemorrhage” in the sector. For 2025, a 30% reduction in long-term rental registrations is expected, equal to approximately 60 thousand units, and a 20% decrease in corporate purchases, i.e. approximately 15 thousand fewer vehicles. In terms of tax revenues, this will translate into an estimated loss of 125 million euros for the State and Local Authorities.
Then there is the impact on costs for employees. The average increase in the taxable value for car fringe benefits is around 1,600 euros, equal to an increase of 67%. This makes owning a company vehicle an increasingly less accessible privilege. For many companies, these figures could translate into a rethink of mobility policies, favoring solutions such as the mileage allowance or reducing the number of company cars assigned. Employees could opt out of this benefit or request alternative financial compensation, while companies could opt for electric or plug-in hybrid vehicles to limit the tax impact. What will happen to company cars?
