The Swedish government has passed several amendments to the climate bonus for cars. These include stricter emissions requirements and improvements for companies wanting to benefit from the bonus. The amendments came into force on 12 July 2022.
Since 1 July 2018, you can apply for a so-called climate bonus from the Swedish Transport Agency when buying a new low-emission car. The amendments to the existing legislation include the removal of the limit on the bonus available to companies, which was previously set at 35 per cent of the price difference between the low-emission car and the closest comparable conventional car. This means that companies can benefit from the climate bonus in the same manner as consumers.
The amendments also include the introduction of a price cap on the climate bonus equal to a new car price of SEK 700,000, meaning that more expensive cars no longer qualify for the bonus. The bonus for plug-in hybrids is reduced from the current level of SEK 45,000 to SEK 20,000 and, in addition, the CO₂ emissions limit for the bonus malus system is being reduced from 60 g CO₂/km to 50 g CO₂/km.
What does this mean for business owners?
It is important to know the licensing date of any new cars because only cars that, under Sweden’s Road Traffic Tax Act, initially become subject to tax after 11 July 2022 are encompassed. The amendments being made to the legislation do not apply to cars that have already been licensed for road use before that date.
Also note that it is the owner of the car that is entitled to the climate bonus. If your company has lease agreements for its cars, the climate bonus is paid to the leasing company. As a lessee, it is important to find out how you can benefit from the climate bonus and how the new law affects your lease agreements for cars delivered after the amendments to the legislation come into force.
The vehicle tax on cars licensed after 11 July may also be higher if the car’s CO₂ emissions exceed the new lower limit. This affects the taxable benefit value of the car as the vehicle tax may be higher than if the car is licensed before the new legislation comes into force.
What applies to company cars that are used for part of a month?
The same rules as before apply to declare a taxable benefit in the shape of a company car that is used for only part of the month.
To keep in mind:
- A company car must always be taxed in the month in which the car is used by the employee. The minimum taxation period is one month, so even if the employee receives the car on the last day of the month, they must pay tax on the full value of the benefit.
- If a company car is replaced, the car available to the employee for the largest part of the month is used for taxation purposes.
- If two cars are used for the same length of time in a month, the average value is used for taxation purposes.
- Any retroactive adjustments concerning company cars must always be reported in the correct period in the employer’s tax returns.
If you have any questions about the new rules and how they affect you, please feel free to contact us here at Azets.