It’s the end of tax free buying of new electric vehicles for Swiss drivers as government believes the measure, which aimed to encourage adoption, has been so successful
The Swiss government says it will end tax exemption for e-vehicles from January 1 2024 and all will be subject to the automobile duty. In a surprise statement following a meeting on November 8, it approved an amendment to the Vehicle Duty Ordinance.
In a statement after the meeting it said: “The Federal Council’s aim is to redress shortfalls in tax receipts and to secure the deposits flowing into the motorway and urban transportation fund. The imposition of duty on e-vehicles is part of the budget adjustment concept which the Federal Council adopted at its meeting on 25 January 2023.”
Based on the Vehicle Duty Act, the Federal Council levies 4% duty on vehicles for passenger or goods transport. E‑vehicles have been exempt from automobile duty since its introduction in 1997. At the time, the Federal Council’s aim in introducing the exemption was to create market incentives for the development of electromobility.
But now that Swiss drivers have embraced the technology, the Federal Council decided it was time to reintroduce the tax. It said: “With the growth in electromobility, the situation has now changed significantly. Between 2018 and 2022, annual imports of e-vehicles saw an almost sixfold increase, from around 8,000 to over 45,000.
“In the first half of 2023, some 30,400 e-vehicles were imported. Compared to the figure one year earlier (just under 18,300), this corresponds to an increase of approximately 66%. The share of e-vehicles in total imports was about 23% in the first half of 2023 (previous year: approx. 16%). This increase led to an appreciable decrease in receipts from automobile duty: for 2022 as a whole, the tax shortfall is around CHF 78 million (US$86.6m), and for the current year a shortfall of some CHF 100m (US$111m) to CHF 150m (US$166.5m) is expected. If the exemption from duty had continued, the estimated cumulative tax shortfall for 2024 to 2030 would have been CHF 2bn to CHF 3bn. By making e-vehicles subject to automobile duty, the Federal Council is acting to redress this shortfall.
The Federal Council takes the view that the exemption from duty as an incentive is no longer necessary, given the sharp rise in the share of e-vehicles in total car imports and the convergence of prices. Moreover, the imposition of duty on e-vehicles is part of the budget adjustment concept which the Federal Council adopted at its meeting on 25 January 2023. The future imposition of duty on e-vehicles will have a positive impact on the entire federal budget: an increase in deposits from automobile duty in the motorway and urban transportation fund will mean that the deposits in the fund from mineral oil tax can be reduced, at least temporarily. This will take up to CHF 150 million a year off the general federal budget.
Read the full Federal Council statement HERE
Return to the Decarbonisation News Index HERE
