Spain offers tax breaks for EVs
The Spanish government is aiming to boost sales of electric cars with a tax break for private individuals. The Council of Ministers has approved a deduction of 15 per cent of income tax for the purchase of electric vehicles.
This tax relief will apply until 31 December 2025. The maximum deduction that can be claimed from the time of the electric car purchase is 20,000 euros. This measure has already been examined and approved by the EU Commission under state aid law. For corporate income tax, a tax incentive is also to be introduced for companies to install charging stations for both private and public use. Further details have not yet been made public.
In any case, it is unclear what will happen politically in Spain after Spain’s Prime Minister Pedro Sánchez called early elections for 23 July. The Spanish government recently adjusted its electric mobility subsidy programme Moves III. Spain is also promoting the production of electric vehicles and batteries through its PERTE programme.
As reported by Reuters, Economy Minister Nadia Calvino told a news conference on Tuesday, “The aim is to consolidate the investments underway in our country for the modernisation of the auto industry.”
The tax breaks now decided on for electric vehicles are part of a larger anti-inflation package that was originally meant to expire on 30 June. The aid, which includes a reduction of the VAT on basic foodstuffs and a promotion of public transport, has now been extended until the end of the year.
According to the newspaper El Pais, no VAT has been levied on basic foodstuffs in Spain since January 2023, and on products such as pasta or oil, VAT has been lowered to five per cent. In addition, there are subsidies on fuel purchases for transport companies and farmers and livestock breeders – the subsidy amounts to 10 cents per litre until 30 September and five cents per litre in the last quarter of the year.