The Association of International Motor Vehicle Manufacturers (VDIK) is calling for support for leased vehicles in the draft bill for the immediate investment program in line with the declining balance method of depreciation. To this end, the VDIK has turned to the Finance Committee of the German Bundestag, which will discuss the planned immediate investment program in a hearing on Monday.
In order to encourage significantly more commercial customers to switch to electromobility, the VDIK proposes that lessees should be able to deduct the full amount of the leasing installments and special leasing payments as a business expense for tax purposes at the start of the leasing contract. With this regulation, commercial vehicle leasing, which accounts for the majority of registrations at more than 60 percent, would be included in the promotion. Alternatively, the legislator could also apply a flat-rate business expense factor of 1.5 for leasing installments to promote the BEV ramp-up.
The draft bill currently provides for the introduction of a temporary “special depreciation” for purely electric vehicles purchased after June 30, 2025 and before January 1, 2028. This planned 75% depreciation in the year of purchase of an electric car used for business purposes is an important signal. However, this tax measure will do too little for the ramp-up of electromobility, as it will not reach the leasing market. In the current form of the draft bill, leasing customers would only benefit from the planned special depreciation if leasing companies pass on the planned tax advantage.
The VDIK welcomes the fact that the German government is now quickly implementing its plans for investment in e-mobility from the coalition agreement and sees the immediate tax investment program as an important first step towards boosting the German economy. Against this backdrop, the VDIK is asking the members of the Finance Committee to consider the proposal for the extension favorably in its hearing and to take it into account in the law.
