Using electric company cars offers not only ecological advantages but also significant tax savings. In this article, you will learn how to benefit from the 0.25% rule and the tax-free installation of charging devices. Additionally, we take a look at the changes starting in 2026: The previous flat-rate allowance for home charging will be abolished. Companies can now reimburse charging costs either based on actual consumption or via the electricity price flat rate – both methods require proof of the charged electricity amount.
All tax benefits mentioned in this article apply specifically to German tax regulations.
Overview of Tax Benefits for Electric and Hybrid Vehicles
The following table provides a summary of the key tax regulations and benefits for electric and hybrid vehicles. This overview offers a quick insight into the various tax incentives and regulations. Detailed information on each point can be found later in the article.
| Description | Regulation | Vehicle Type | Amount |
|---|---|---|---|
| Provision and installation of charging stations | § 3 No. 46 EStG | Electric and Hybrid Vehicles | Tax-free |
| Charging at the workplace | § 3 No. 46 EStG | Electric and Hybrid Vehicles | Tax-free |
| Monthly flat rate for home charging (valid until 31.12.2025) | Flat Rate Reimbursement | Electric Vehicles | 70 EUR (without additional charging option at or from the company) |
| Monthly flat rate for home charging (valid until 31.12.2025) | Flat Rate Reimbursement | Hybrid Vehicles | 35 EUR (without additional charging option at or from the company) |
| Reimbursement from 2026: Electricity price flat rate | Tax-free reimbursement | Electric and hybrid vehicles | Average price according to Destatis (e.g., approx. €0.34/kWh for 2026) |
| Reimbursement of charging costs by kWh-accurate billing | kWh-accurate Reimbursement | Electric and Hybrid Vehicles | Variable |
| Taxable benefit for providing an electric company car with a gross list price up to €100,000 | 0.25% Rule | Electric Vehicles | 0.25% of the list price |
| Taxable benefit for providing an electric company car with a gross list price **over **€100,000 | 0.5% Rule | Electric Vehicles | 0.5% of the list price |
| Taxable benefit for providing a hybrid company car | 0.5% Rule | Hybrid Vehicles | 0.5% of the list price |
| Special depreciation for newly registered fully electric vehicles | Turbo Depreciation | Electric Vehicles | 75% in the first year, staggered until 2027 |
Tax-Free Provision of Charging Stations
A major advantage for employers is the ability to provide their employees with a charging station (Wallbox) and cover the installation costs without it being subject to income tax. This is possible according to § 3 No. 46 EStG . However, if the Wallbox becomes the property of the employee, it becomes subject to income tax and can be taxed at a flat rate of 25%.
Alternatively, a subsidy for a private wallbox can also be taxed at a flat rate of 25% (§ 40 Abs. 2 No. 6 EStG ).
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Tax-Free Charging at the Workplace
The free or discounted charging of electric or hybrid vehicles at the employer’s premises is tax-free if the employer provides this benefit in addition to the employee’s regular salary. This applies to both private and company vehicles.
The tax exemption is not limited to a maximum amount or the number of eligible vehicles and is valid until the end of 2030. It also applies to temporary workers and has been extended until the end of 2030. According to § 4 Abs. 2 Nr. 4 Satz 1 LStDV , the employer does not need to record the tax-free benefits in the employee’s payroll account for simplification purposes. This also includes the tax-free benefits according to § 3 No. 46 EStG.
Reimbursement of Expenses for Company Cars
The tax exemption according to § 3 No. 46 EStG does not apply if the employee charges the company car at home or at third-party locations.
However, the reimbursement of privately incurred electricity costs can still remain tax-free, as it is considered a tax-free reimbursement of expenses for the company car. The reimbursement of expenses for company cars offers employees an attractive way to get privately incurred costs for the company car used for business purposes reimbursed tax-free. This includes the reimbursement of electricity costs when the vehicle is charged at home or at third-party locations. This regulation makes it easier for employees to minimize the costs of operating their company car while benefiting from tax advantages.
The reimbursement of charging costs for a company car can be tax-free in several ways.
Valid Until December 31, 2025: Flat-Rate Expense Reimbursement for Privately Charged Electric and Hybrid Company Cars
Until December 31, 2025, companies could simplify the process by using monthly flat rates for tax-free expense reimbursement. This regulation was introduced by a letter from the Federal Ministry of Finance (BMF) and applied to electric and hybrid company cars charged at home.
The flat rates were:
€70 per month for electric vehicles (without charging option at the employer)
€35 per month for hybrid electric vehicles (without charging option at the employer)
With an additional charging option at the employer:
€30 for electric vehicles
€15 for hybrid electric vehicles
This option will be completely discontinued as of January 1, 2026.
New from 2026: Electricity Price Flat Rate
Starting January 1, 2026, the previous option to reimburse charging costs via monthly flat rates will be eliminated.
Instead, companies can reimburse the costs of charging a company car at home tax-free—optionally using the electricity price flat rate. This flat rate is based on the average household electricity price in the first half of the previous year, published by the Federal Statistical Office (Destatis). The electricity price flat rate applies for the period 2026 to 2030.
- Example: For 2026, the value according to Destatis is around €0.34/kWh. For 3,000 kWh, this results in a tax-free expense reimbursement of approximately €1,020.
Important: The electricity price flat rate applies for the entire calendar year and requires proof of the amount of electricity charged—either via a stationary meter, a mobile meter, or the vehicle’s internal electricity meter.
Further information on these changes can be found here: Billing Charging Costs from 2026 .
Reimbursement of Charging Costs as Expense Reimbursement through kWh-Accurate Recording
This method will remain valid from 2026 onwards and serves as an alternative to the electricity price flat rate.
A precise method for reimbursing charging costs for company cars is kWh-accurate billing. Here, the electricity consumption is accurately recorded either by a separate electricity meter or an appropriate charging station (Wallbox).
Manual kWh-Accurate Billing: The employee records the electricity consumption themselves, for example, by regularly reading an intermediate meter before or in the Wallbox, and submits the collected data to the employer for reimbursement. This method accurately reflects the actual costs but requires precise documentation and possibly additional technical equipment .
Automatic kWh-Accurate Billing: Alternatively, automatic recording and billing can be used. Here, a legally compliant Wallbox with a connection to a billing backend is installed. The employee authenticates themselves using RFID, and the charging processes are automatically transmitted to the company and billed. This method offers a transparent and efficient solution that simplifies billing for both employers and employees. For more information, read our article on the topic: Charging and Billing Company Cars at Home .
The Charge Repay Service from Phoenix Contact enables automatic, precise, and efficient billing of the charged kilowatt-hours for company vehicles. The service offers transparent and accurate recording of charging processes, regardless of the Wallbox used, thus simplifying billing for both employers and employees.
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Our guide highlights the requirements for a home charging solution and explains what is needed to use it for legally compliant billing of company cars. Learn more about the installation of wallboxes, legal frameworks, and efficient billing solutions for home charging.
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Further Information on Taxes and Electric Company Cars
Increase of the Gross List Price for the 0.25% Rule
Another tax advantage is the monetary benefit for providing an electric company car, which is 0.25% of the gross list price, up to a list price of 100,000 EUR.
Special Depreciation for Electric Vehicles
The new turbo depreciation applies to fully electric vehicles used for business purposes, purchased between July 1, 2025, and December 31, 2027. Companies can deduct 75% of the acquisition cost in the first year, followed by staggered depreciation over five years. Plug-in hybrids are excluded.
Logbook as an Alternative to the 0.25% Rule
When it comes to the taxation of electric company cars, employees have the choice between the 0.25% rule and keeping a logbook. Alternatively, a logbook can be kept to accurately document the actual business and private trips. This method can be advantageous if the proportion of private use is low, as it allows for an exact accounting of the actual usage costs and thus potentially leads to a lower tax burden. However, the logbook method also means significantly higher effort, as every trip must be precisely documented. Employees can therefore choose the method that best suits their individual situation.
Taxation of Hybrid Company Cars
Hybrid company cars offer a combination of electric and combustion engines, which also brings tax advantages. However, the taxation of hybrid company cars differs from the taxation of pure electric vehicles.
For plug-in hybrids, the 0.5% rule generally applies. This means that 0.5% of the gross list price of the vehicle must be taxed monthly as a monetary benefit. However, this rule only applies under certain conditions:
Electric Minimum Range: The plug-in hybrid must have a purely electric minimum range of at least 60 kilometers. From 2025, this requirement will be increased to 80 kilometers.
COâ‚‚ Emissions: Alternatively, the COâ‚‚ emissions of the vehicle must not exceed 50 grams per kilometer. The monetary benefit for the private use of a hybrid company car can be determined either as a flat rate, by keeping a logbook, or by kWh-accurate billing, similar to electric company cars.
Budget 2025: Mini-Subsidy for Electric Cars Approved
The federal cabinet has approved the budget for 2025, which includes a moderate subsidy for electric cars. A special depreciation for newly registered fully electric and comparable zero-emission vehicles will be introduced, which will apply retroactively from July 1, 2024, and run until the end of 2028. This measure aims to make the acquisition of such vehicles more attractive.
Charging Private Electric Cars at the Company
More and more employers are offering their employees the opportunity to charge their electric cars during working hours. This is not only practical but also tax-free according to § 3 No. 46 EStG. Although companies are not required to provide charging facilities, both sides benefit if they do.
Employees can charge their vehicles, whether private electric cars or company cars, during working hours and often benefit from reduced electricity prices. Employers, in turn, can fulfill their ecological responsibilities and strengthen their bond with employees. Additionally, offering charging stations for external visitors can increase the company’s attractiveness.
Conclusion: Tax Benefits of Electric Company Cars
Electric company cars offer significant tax savings. Through the 0.25% rule, tax-free installation of charging stations, and the possibility of tax-free charging at the workplace, both companies and their employees can benefit. The various methods for reimbursing charging costs, whether flat rate or kWh-accurate, provide flexible and attractive solutions to minimize operating costs. Additionally, the planned increase in the gross list price for the 0.25% rule opens up further financial incentives.
