The Netherlands is the world’s leader in EV adoption thanks to its taxation policies and EV charging infrastructure.

EV ADOPTION – A PART OF EU COMISSION’S ECONOMIC RECOVERY PLAN

After the coronavirus pandemic began to loosen its grasp on Europe, the European Union has been looking for ways to include the electric vehicles (EV) in its economy recovery plans. According to EU Commission’s plan “Sustainable and Smart Mobility Strategy – putting European transport on track for the future” a comprehensive policy must be reinforced to incentivize transport users to make more sustainable choices such as choosing EV over gasoline or diesel cars. These incentives are mainly economic, namely carbon pricing, taxation, and infrastructure charging, but should be complemented by improved information to users.

EV TAXATION POLICIES IN THE NETHERLANDS

The Netherlands is one of the European countries leading the adoption of battery electric vehicles (BEVs), the vehicles that are powered entirely by electricity. The success of The Netherlands lays partly in its taxation policy such as:

Road tax
BEVs are exempted from road taxes.

Registration tax
Zero emission cars are exempt from paying registration tax. For other cars, the system is progressive, with different levels of CO2 emissions that are due different amounts of registration tax.

BiK taxation
Individuals with battery electric vehicles (BEVs have a lower percentage of the list price added to their income when using their company car also privately. For petrol cars this is 22%. For BEVs it was 4% in 2019, 8% in 2020, and 12% in 2021. This will further increase to 16% in 2022 and 17% in 2025.

Recharging infra
There is no incentive for individuals, but companies can make use of the MIA (see ‘profit tax’).

Profit tax
The Netherlands have the ‘MIA’ regulation in which investments in cleaner technology (BEVs) are being encouraged by making them deductible in profit tax. This advantage has significantly decreased over the last years.

VAT RATES ACROSS EUROPE

VAT rates on BEV purchase in Europe vary from country to country but they are around the 20% mark (although they can be as high as 27% in Hungary, as low as 17% in Luxembourg). In Norway BEV purchases are VAT exempt. A low VAT rate is however, not the only decisive factor for a successful adoption of BEV.

The Netherlands, despite of its 21% VAT rate on the purchase of BEV (versus 0% rate in Norway), is the world’s leader for adopting electric vehicles which is a result of country’s long term planning and early investments into charging infrastructure.

THE NETHERLANDS, A LEADER IN EV CHARGING INFRASTRUCTURE ADOPTION

Researchers from stressfreecarrental.com looked at the number of electric vehicles sold in relation to population size, as well as government investment in EV infrastructure and the number of charging points per electric vehicle. It found that the Netherlands was the most advanced in the roll-out of infrastructure and technology followed by Norway and Sweden .

What put the country to the top of the list is its EV charging  infrastructure. The Netherlands has more public charging stations per car than any other country, with one station for every five electric cars currently on the road. By September 2021, the total number of regular charging points increased to 78,279 and fast-charging points to 2,524. Over 49.228 charging points are public (24/7 publicly accessible) and  38,047 are semi-public (limited publicly accessible). South Holland alone (The Hague and Rotterdam area) has over 21 896 regular charging points making it the most electric-friendly province of the Netherlands.

PURCHASE SUBSIDIES

For EV and fuel-cell vehicles the subsidized amount is 9,000 EUR which consists of a federal share (6,000 EUR ) and a manufacturer’s share (3,000 EUR). For BEVs with a net price between 40.000 EUR and 65.000 EUR, the total subsidy is 7,500 EUR . When adhering to certain conditions, car leasing is also eligible. As of November 2020 it was possible to combine the federal subsidy with other local incentives.

Author: Le Thuy Duong, Marketing Communications Specialist at Global VAT Compliance

Sources: eur-lex-europa.eu, business.gov.nl, rvo.nl, stressfreecarrental.com

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