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Germany ends tax disadvantage for corporate electric cars

FRANKFURT, June 7 (Reuters) – German legislators voted in tax incentives for drivers of zero-emission corporate cars on Friday, cheering an industry so far disappointed by the country’s flagging electric car market.

Chancellor Angela Merkel wants 1 million electric cars on German roads by 2020 but fewer than 3,000 were sold last year, since her centre-right government refuses to directly subsidize their purchase.

The private use of a company car is treated as taxable income in Germany and measured at a flat monthly rate of 1 percent of the vehicle’s gross list price. So electric cars have been at a disadvantage since their price tag can be as much as double that of a car using a conventional combustion engine.

According to the new law, backdated to Jan. 1, private users can offset the list price with 500 euros per unit of battery size, expressed in kilowatt hours. The maximum offset is 10,000 euros, which would equate to a powerful 20 kWh battery.



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