Workplace charging to be tax exempt

The fringe benefit tax on employees who charge an electric vehicle at their workplaces is to be abolished and tax relief is to be introduced in the summer of 2023. The tax relief is expected to reduce both costs and administration and aid the green transition.

Workplace charging to be tax exempt

The Swedish government has agreed a tax relief bill and submitted it to the Swedish parliament to be put to the vote. The bill is expected to be passed by a majority. This will mean that, as of 1 July 2023, tax relief will be introduced for employees who charge an electric car or other vehicle, such as light truck, motorcycle, moped or bike, at the workplace. The tax relief is expected to apply for three years. This is great news for employees and employers. 

At present, employees are subject to fringe benefit tax when charging a private electric car, plug-in hybrid or company car at the workplace. The tax is based on the market value of the electricity. This then provides a basis for employer’s contributions. The new bill is expected to result in reduced tax costs for employees. For employers, it will mean less administration and reduced costs for employer’s contributions. 

The bill will apply to all companies regardless of size or industry. It does, however, require that the charging takes place at a charging point provided by the employer at the workplace. 

The tax relief is being introduced to encourage more people to switch to climate-smart means of transport. Access to charging facilities at the workplace has been and remains central to people’s choices when buying a vehicle. 

This tax bill is expected to encourage more workplaces to install more charging facilities as the tax relief results in straightforward charging administration for employers. 

Sales of electric vehicles and plug-in hybrids are expected to increase as it becomes easier and more cost-effective to drive an electric vehicle to and from work, which will lead to increased demand for charging facilities at workplaces. 

“This is a bill that GARO supports. We’ll see more climate-smart vehicle purchases, and more companies will have the opportunity to become part of the green transition to an electrified and fossil-free society. Become one of the companies to the fore,” says Magnus Hellström, Sales Director.