What is automobile taxation for the self-employed?
As a self-employed professional, you're probably looking for information on car taxation. It's sometimes difficult to find out what benefits are available when you buy a car to use for work. Our guide to car taxation for the self-employed is here to help. Beev is here to simplify your ecological transition. Throughout this guide, we'll show you the various advantages of switching to an electric vehicle.
If you're self-employed, your car is one of your working tools. Especially if you don't have a fixed place of work and have to travel frequently. So it's important to think about car tax exemption.
However, what does car tax exemption for the self-employed entail? The aim is to reduce the charges and taxes on your company car. This takes into account the depreciation of the electric vehicle and its battery, assistance with financing, and any tax exemptions.
A quick reminder: if your sales exceed €70,000 a year, you're covered by the BNC scheme. For a liberal profession with sales of less than €70,000, the micro-BNC regime applies.
Automobile tax exemption for the self-employed
The purchase of a company vehicle is often one of the biggest expenses for the self-employed. So it's important to ask yourself the right questions about your needs. Not only will this help you find the right electric vehicle, it will also enable you to make the right decision about financing.
Automobile taxation for the liberal professions is not the easiest subject to understand. That's why we're here to guide you through the entire process.
Let's start with two important criteria for the tax exemption of an electric car for the self-employed.
Who should buy an electric vehicle for self-employed professionals?
You have two options if you're considering the purchase of your company car. Either you decide to buy your electric vehicle in the name of your company. Or you can register it as a private asset, making it a private vehicle.
We advise you to register it in your company's name, to make it more interesting for you.
Here are the differences between the two purchasing decisions:
| Vehicle registered in company name | Privately owned vehicle | |
|---|---|---|
|
Usage |
You can deduct depreciation, loan interest and any other vehicle-related expenses on a pro rata basis.
You are subject to the tax on the use of passenger vehicles for economic purposes. |
You can't deduct any car-related costs, such as interest on a loan, vehicle registration or maintenance. You cannot depreciate the vehicle. However, you can deduct expenses related to its use, such as fuel. |
|
Resale |
On resale, the value of business capital gains will be taxed at the standard corporate tax rate. |
You are not subject to capital gains tax. |
What is accounting depreciation? In simple terms, fixed assets are, by definition, goods intended to be used over a period of several years. Their acquisition value must be greater than €500.
Discover several models of electric vehicles available for quick delivery!
Vehicle financing method: leasing, LOA or LLD
If you're wondering which financing method to choose, there are several to choose from. Today, we're going to take a look at the three most commonly used financing methods for the purchase of an electric car for the self-employed.
Firstly, the cash or loan purchase, which simply involves buying the car as mentioned in the previous paragraph. You can, however, decide to pay for the car yourself, or approach a bank to take out a loan.
Secondly, you can opt for leasing, if you register your car in the company's name. Or a lease with purchase option (LOA), if you wish to register your electric vehicle in your private assets. In both cases, the lease is for a fixed term, and allows you to purchase the vehicle at the end of the contract.
Finally, you can opt for a long-term lease (LLD). As a general rule, these are four- to five-year contracts. The advantage of a long-term lease is that you can change vehicles at the end of each contract, to take advantage of a newer vehicle or test drive other electric car models.
| Buy cash or borrow | Lease to own (LOA) | Long-term leasing (LLD) | |
|---|---|---|---|
|
Amortization |
If you buy on credit, you can deduct the interest on the loan.
Depreciation is also deductible, subject to the maximum limit for your vehicle. |
The car is not on the balance sheet.
There is no depreciation to be booked during the lease period. |
The car is not on the balance sheet.
There is no depreciation to be booked during the lease period. |
|
Tax on the use of passenger vehicles for economic purposes |
You are not subject to the tax on the use of passenger vehicles for economic purposes. |
You are not subject to the tax on the use of passenger vehicles for economic purposes. |
You are not subject to the tax on the use of passenger vehicles for economic purposes. |
Passenger cars and commercial vehicles are depreciated on a straight-line basis over 4 or 5 years (i.e. at a rate of 25% or 20% per year).
Vehicle operating expenses are deductible from taxable profits. Depreciation takes into account the depreciation of your vehicle over time: it can therefore be considered an expense for your company. expense for your company. Depreciation applies only to passenger cars, and is subject to a ceiling.
You should also know that the ecological bonus can be applied regardless of how you finance your vehicle. However, Bruno Le Maire, the French Minister for the Economy, has announced that the ecological bonus will be lowered to €5,000 in 2023, compared with €6,000 at present for electric cars costing less than €47,000. What's more, he plans to reserve this bonus for vehicles manufactured on European soil. So if you're thinking of going electric, you can get in touch with our team right now to get your project off the ground.
Lease an electric car
Would you like to lease an electric car? Beev offers you 100% electric cars at negotiated prices, as well as recharging solutions.
Depreciation of electric vehicles for professionals in 2023
Depreciation ceilings have also changed over the years. Still with the aim of reducing CO2 emissions from combustion-powered cars as much as possible, the depreciation ceilings give electric vehicles an advantage. Here's what's in store for 2022 and 2023. Please note that this table is subject to change, but we're here to make sure you have the most up-to-date information.
| Ceiling | 2022 | 2023 |
|---|---|---|
|
30 000 € |
<20 g de CO2 /km |
<20 g de CO2 /km |
|
20 300 € |
<20 g à 50 g |
<20 g à 50 g |
|
18 300 € |
from 60 g to 135 g |
from 60 g to 130 g |
|
9 900 € |
>of 135 g |
>of 130 g |
Depreciation of electric car batteries
It is also possible to write off the battery of your electric vehicle, which is considered to be part of your vehicle's equipment and can therefore be written off on the basis of an invoice sent by your dealer.
The depreciation base for the battery is between between €10,000 and more than €30,000, depending on the power of the battery and the vehicle and can be carried out either over one year or over the vehicle's depreciation period.
Remember to ask for two invoices, one for the electric car and one for the battery.
Read also - Electric vehicle taxation 2023: your advantages
Taxation of electric cars for the liberal professions
As we saw above, electric vehicles benefit from higher depreciation than other types of vehicle. In fact, you can write off €30,000 of the cost of the vehicle, i.e. almost €15,000 more than for internal combustion vehicles. And if we were to tell you that there are still advantages to buying an electric vehicle...
Exemption from vehicle registration tax
Exemption from vehicle registration tax is decided at regional level. To support the adoption of clean vehicles, several regions have voted to exempt electric vehicles and certain clean vehicles from registration tax.
Exemption from tax on the use of passenger vehicles for business purposes
The "taxe sur l'affectation des véhicules de tourisme à des fins économiques" (tax on the use of private passenger vehicles for economic purposes) is a tax levied on companies with their head office in France or an establishment in France. This tax applies to the passenger vehicles they use, own or lease. The purpose of a passenger vehicle is to transport people. It has a maximum of 9 seats, including the driver. It has a rear bench seat and can carry more than 2 people. It bears the designation VP (véhicule particulier) on the J.1 section of your vehicle registration document.
The tax on the use of passenger cars for business purposes is payable annually to the local business tax office (Service des Impôts des Entreprises - SIE).
Since 2006, the tax on the use of passenger vehicles for economic purposes has been calculated according to a progressive scale that takes several criteria into account:
- The vehicle's CO2 emissions
- Release date
- Vehicle fuel (diesel, petrol)
The aim of this progressive approach is to encourage companies to renew their fleets in favor of newer, less polluting vehicles. Electric vehicles are not subject to the tax on the use of passenger vehicles for economic purposes. This exemption only applies to vehicles emitting less than 60 g/km of CO2.
That's it! You now know everything there is to know about car taxation for the self-employed. Do you have any questions? Leave us a comment!
Read also: Mileage barometer 2023: what allowances?
