The 2020 State Budget proposes an indirect reduction in additional corporate vehicle taxation — but how will this reduction affect the taxes associated with my fleet?
In simple terms, the OE 2020 provides that the purchase of vehicles, and the expenses associated with them, have a lower tax rate. Briefly we have:
A reduced additional tax, for vehicles whose acquisition cost is up to 27 500 euros (currently this limit is situated at 25 000 euros);
An additional reduced taxation for hybrid vehicles. Here, the tax rate of 5% includes vehicles with a purchase price of up to 27,500 euros;
The end of the 10% aggravation, when there is a tax loss, for the first two tax periods.
BMW 330e
Case study: What is the fiscal impact of OE 2020 on Joaquim's vehicles?
For a better understanding, let's take a look at the case of Joaquim, a UWU Solutions client, and how he can save around 11 000 euros in 2020 (given the rules in force in 2019).
This year, Joaquim decided to create his company's fleet! To this end, it acquired two vehicles, a plug-in hybrid vehicle and a vehicle powered exclusively by diesel, to cover the daily commute of its employees.
These vehicles had an acquisition cost of 26 000 euros per unit. However, as your company started its activity in November of the previous year, it is still in an investment phase, and it is expected that it will present a negative result.
Meanwhile, Joaquim became aware of the proposed changes in OE 2020 and contacted UWU Solutions, to understand what the fiscal impact on their vehicles will be. Let's see…
Diesel powered vehicle
Assuming that Joaquim's company will present negative results, the diesel vehicle acquired by Joaquim would have:
In 2019: An additional taxation of 27.5% + 10%;
In 2020: An additional 10% tax.
Thus, we would have:
Plug-in Hybrid Vehicle
Similarly, the plug-in hybrid vehicle acquired by Joaquim would have:
In 2019: An additional tax of 10% + 10%;
In 2020: An additional 5% tax.
As far as numbers are concerned, we would have:
According to the proposal for the State Budget for 2020, Joaquim's company may have a annual savings in the additional taxation of approximately:
1787.50 euros in the diesel vehicle;
975 euros on the plug-in hybrid vehicle.
Article available at https://uwu.pt/a/index.php/pt/noticias/oe-2020-o-que-pode-mudar-na-tributacao-da-sua-frota
Car Taxation. Every month, here at Razão Automóvel, there is an article by UWU Solutions on automobile taxation. The news, the changes, the main issues and all the news around this theme.
UWU Solutions started its activity in January 2003, as a company providing Accounting services. Over these more than 15 years of existence, it has been experiencing sustained growth, based on the high quality of services provided and customer satisfaction, which has allowed the development of other skills, namely in the areas of Consulting and Human Resources in a Business Process logic. Outsourcing (BPO).
Currently, the UWU has 16 employees at its service, spread across offices in Lisbon, Caldas da Rainha, Rio Maior and Antwerp (Belgium).
