Let us briefly summarize their characteristics about Electric cars and cars with a hybrid engine (plug-in) constitute a separate heading.
We introduced you to the accounting and tax arrangements for a company car in our article Car use in business. Electric cars and cars with a hybrid engine (plug-in) constitute a separate heading; the popularity of these continues to grow, and therefore attention needs to be paid to them. Let us briefly summarize their characteristics.
The issue of travel allowances for the use of an electric car was discussed within the Coordination Committee (KOOV) of the Chamber of Tax Advisers and the General Finance Directorate (GFD). Subjects of discussion were in particular:
- establishing the compensation for the use of a private electric car for business purposes,
- the question of the charging of a company electric car or a car with a hybrid engine by an employee at home,
- establishing an employee's benefit in kind for the use of a company electric car for private purposes.
Establishing the compensation for the use of a private electric car for business purposes
If employees use their own car for business purposes, they can charge their employer for the number of kilometers traveled and for fuel used. The purchase price, age, or type of vehicle do not play a role in the rate for kilometers traveled. The amount is fixed (for 2021 it is CZK 4.40/km). This rule can be applied regardless of the type of engine, and so includes electric cars and plug-in hybrids.
As far as fuel used is concerned, according to the GFD, both the price of fuel and the rate of consumption must be demonstrated. For electric cars, the price of fuel is set by decree and for 2021 is CZK 5.00/kWh.
With regard to the rate of consumption, this is based with reference to the standpoint of the Ministry of Labour and Social Affairs on the date stated in the vehicle’s large technical certificate. For plug-in hybrids, the large technical certificate states two values - the consumption of an electric vehicle and the consumption of the internal combustion engine in standardized tests. These values are then added together for car expenses purposes.
The question of the charging of a company electric car or a car with a hybrid engine by an employee at home
Until recently, this issue was a pressing one, since, in cases of the domestic charging of electric vehicles, there was no uniform electricity price to determine the reimbursement of the cost incurred by the employee in charging a vehicle. The situation changed in 2020 when the MLSA Decree No 358/2019 came into force, which also included a reference price for electricity (as already mentioned, for 2021 this reference price is CZK 5.00/kWh).
Ex. With his/her employer’s permission, an employee uses a private electric car for business trips; this car is regularly charged at the family home. In October 2021, he/she made a business trip with this vehicle and, according to the vehicle logbook, covered 180 km. The employee did not provide any proof of the price of the electricity consumed. According to the technical certificate, the electricity consumption of the vehicle is 14 kWh/100 km.
Calculation: The employee is entitled to travel expenses to a total value of CZK 918,-. Of this, the basic amount is CZK 792 (180 km x CZK 4.40) and the amount for electricity consumption is CZK 126 (14 kWh x 1.8 x CZK 5).
Establishing an employee's benefit in kind for the use of a company electric car for private purposes.
If the cost of fuel is paid by the employer and the employee uses a company electric car for private purposes, then the employee's benefit in kind can be calculated as the sum of monthly electricity costs (or petrol and electricity for plug-in hybrids) multiplied by the ratio of private mileage to total mileage for the given month.
Electric cars and road tax
Under Section 3 subpar. f) point 1 of the Road Tax Act, vehicles for the transport of persons or vehicles for the transport of goods with a maximum permissible weight of fewer than 12 tonnes which are powered by electricity (so-called electric cars) are exempt from this tax.
Some electric cars run on hydrogen fuel cells instead of normal batteries. For exemption under this provision of the law, it is necessary to distinguish two types of vehicles using hydrogen:
- hydrogen-only vehicles; and
- hydrogen-powered electric vehicles (hydrogen fuel cell or FCEV).
Vehicles that use hydrogen directly convert the chemical energy of hydrogen into mechanical energy in an internal combustion engine, with a hydrogen internal combustion engine operating in the same way as a petrol or diesel engine. The provisions of § 3 letter f) point 1 of the Road Tax Act cannot be applied to these vehicles, i.e. they are not exempt from road tax.
In the second case, these are electrically powered vehicles that generate electricity through the chemical reaction of hydrogen in fuel cells. These are thus electric cars, and therefore the relevant provisions of the Road Tax Act can be applied to them, and thus they are exempt from road tax.
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