Parliament Adopts Amendment of Motor Vehicle Tax Act Extending Exemption for Electric Cars

The German Bundestag (Parliament) has adopted a bill modifying the Motor Vehicle Tax Act (KraftStG) so as to extend the exemption of electric cars (Section 3d KraftStG).

The bill (ref. no. 17/10424) as amended by the Finance Committee of the Bundestag (ref. 17/11183) extends the presently applicable 5-year tax exemption for electric passenger cars to a 10-year period for all electric cars registered between 18 May 2011 and 31 December 2015. All electric cars registered between 1 January 2016 and 31. December 2020 will benefit from a 5-year tax exemption.

The bill shall enter into force upon promulgation in the Federal Law Gazette. The Federal Council that represents the interests of the Federal States may still object to the bill, but since the bill is not a so-called “consent law”, which would require express consent by the Federal Council, Parliament can overrule an objection by the the Federal Council (regarding the necessary parliament majorities, please see Article 77 para. 4 GG).

The government has repeatedly rejected calls to promote the purchase of electric cars by giving government grants, but said it wanted to stimulate the expansion of electric cars by other means, including tax relief. Lately, Chancellor Merkel reaffirmed the government’s target of having one million electric cars on German roads by 2020.

Source: Bundestag

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