Electric vehicles were considered the ultimate tax privilege: no benefit-in-kind, no wage tax and no social security contributions on the benefit arising from the private use of a company car. Austria´s double budget for 2027/2028 puts an end to this. From 2027 onwards, the benefit-in-kind for zero-emission vehicles will become subject to taxation and social security contributions. This raises a number of practical questions for both companies and employees, which require careful analysis.
Until now, no benefit-in-kind had to be calculated for vehicles with CO₂ emissions of 0 – meaning that the private use of an electric company car was entirely exempt from taxes and social security contributions. This rule will now be abolished through an amendment to the Benefit-in-Kind Valuation Regulation (“Sachbezugswerteverordnung”):
We would be pleased to support you in analysing the specific implications for your business.
The relevant acquisition costs of the vehicle used for calculating the benefit-in-kind must now be reported separately on the annual wage statement (L16). This requirement expressly also applies to zero-emission vehicles, for which no benefit-in-kind value is payable in 2026. The acquisition costs to be reported are the uncapped acquisition costs including VAT and NoVA, regardless of whether the employee makes a contribution towards the vehicle costs or not. However, reporting of the acquisition costs is not required if the employee no longer has a company vehicle available for private use as at 31 December 2026 – for example, because the employment relationship ended during the year or the vehicle was returned.
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What is changing?
Until now, no benefit-in-kind had to be calculated for vehicles with CO₂ emissions of 0 – meaning that the private use of an electric company car was entirely exempt from taxes and social security contributions. This rule will now be abolished through an amendment to the Benefit-in-Kind Valuation Regulation (“Sachbezugswerteverordnung”):
- From the calendar year 2027, the benefit-in-kind value will amount to 0.375% of the vehicle’s acquisition costs (including VAT and NoVA), subject to a monthly cap of EUR 180.00 – calculated based on a maximum acquisition cost of EUR 48,000.00. From the calendar year 2028, the benefit-in-kind value will increase to 0.625% of the acquisition costs, capped at a maximum of EUR 300.00 per month. If it can be demonstrated that the average monthly mileage does not exceed 500 km, half of the respective benefit-in-kind values will apply. The benefit-in-kind values are to be reviewed by the Federal Ministry of Finance by 2030.
- Important: There is currently no transitional provision based on the date of acquisition of the vehicle. This means that the new benefit-in-kind rules will apply from 1 January 2027 to all zero-emission vehicles made available for private use – regardless of whether the vehicle was only recently acquired or has already been in use for several years.
What remains unchanged?
Not everything will change: The option of a preferential salary conversion arrangement (a reduction in gross salary in exchange for the provision of a company car) will remain permissible for zero-emission vehicles. The rules regarding company bicycles and the possibility of tax-free reimbursement of charging costs personally incurred by employees will also remain unaffected. The existing provisions regarding the consideration of employee contributions towards vehicle costs will in future apply equally to zero-emission electric vehicles.Outstandinig questions
The introduction of a benefit-in-kind requirement creates an immediate need for action, particularly for companies that have deliberately invested in electric mobility in recent years and have entered into corresponding company car agreements. Several questions will need to be considered from 2027 onwards:- Many employers have entered into salary conversion agreements in connection with company car arrangements that are based on the previous tax exemption for electric vehicles. How these agreements should be treated from 1 January 2027 onwards and whether adjustments are required will need to be assessed on a case-by-case basis, taking into account the underlying contractual arrangements.
- The newly introduced benefit-in-kind increases the tax and social security burden, meaning that employees’ net pay will decrease if their gross salary remains unchanged. In individual cases, employers may be required – due to existing agreements or employment law provisions – to maintain the employee’s previous net salary through an appropriate compensation payment.
- For companies planning or having already made investments in electric fleets or electric pool vehicles, the new tax and social security burden changes the economic attractiveness of such investments. A new overall cost assessment should therefore be carried out.
- The application of the reduced benefit-in-kind value requires proof that monthly mileage does not exceed 500 km. The requirements set by the tax authorities for this proof are not yet known – in particular, whether a simple mileage record will be sufficient or whether a formal journey log will effectively also be required for electric vehicles.
Next steps
The introduction of a benefit-in-kind for electric vehicles marks the end of a tax advantage and requires companies to reassess their company car strategies. Given the absence of transitional provisions, immediate action is required – both in ongoing payroll processing and with regard to existing company car agreements.We would be pleased to support you in analysing the specific implications for your business.
New reporting requirement on the annual wage statement from 2026
Irrespective of the taxation requirement applying from 2027, an amendment to the Wage Account Regulation (“Lohnkontenverordnung”) must already be taken into account for the calendar year 2026:The relevant acquisition costs of the vehicle used for calculating the benefit-in-kind must now be reported separately on the annual wage statement (L16). This requirement expressly also applies to zero-emission vehicles, for which no benefit-in-kind value is payable in 2026. The acquisition costs to be reported are the uncapped acquisition costs including VAT and NoVA, regardless of whether the employee makes a contribution towards the vehicle costs or not. However, reporting of the acquisition costs is not required if the employee no longer has a company vehicle available for private use as at 31 December 2026 – for example, because the employment relationship ended during the year or the vehicle was returned.
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Tobias Goldberger |
