Briefing

Which EU countries incentivise company fleets to go electric?

May 31, 2026

A new ranking reveals major gaps in how European governments taxes company cars

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Publication

Interactive dashboard: which countries have the greenest tax systems?

T&E Good Tax Guide 2026

Yearly publication analysing and comparing the car taxation systems across 31 countries in Europe.

May 31, 2026

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Briefing

Lead author

Arnau Oliver Antich

Principal Data Analyst, Electric Vehicles & Fleets Brussels (EU)

Lead analyst

Jordane Faizant

Data Analyst, Electric Vehicles & Fleets Brussels (EU)

Company cars are one of the most important levers for cutting Europe’s oil use and accelerating electrification. They account for around 60% of new car registrations and are driven roughly twice as much as private cars before entering the second-hand market, shaping the fleet for years.

But this potential remains largely untapped, as most EU tax systems fail to send a clear signal to corporate buyers. Only 9 out of 27 Member States clearly incentivise companies to choose EVs, while 18 Member States have tax systems that fail to incentivise companies to go electric, of which 12 MS have no incentive at all. This is particularly significant because several of Europe’s largest car markets - Germany, Spain, Italy and Poland - fall into this group. As a result, 68% of all compact corporate car registrations take place in countries with no clear tax signal to choose an EV, and 49% in countries with no tax incentives at all.

The briefing also shows that governments are not properly taxing petrol use and emissions. Some countries, such as France, Portugal and Slovenia, apply stronger fiscal signals against petrol company cars. Others, including Germany and Poland, tax high oil-consuming cars weakly or even reward them. Germany is the clearest paradox: the larger and more polluting the petrol company car, the bigger the tax benefit.

This matters because combustion company cars will continue entering the EU fleet for years. Around 20 million new ICE company cars are expected to be registered by 2030, and many will later enter the second-hand market. Weak taxation today risks locking households and businesses into higher fuel use, higher running costs and greater exposure to oil price volatility.

The policy lesson is clear: tax design works. Belgium’s corporate EV registrations rose from 8.8% in 2021 to 54.2% in 2025, while France’s true fleet EV uptake reached 41.3% in March 2026. But without stronger reforms, large markets risk locking millions of new combustion company cars into Europe’s fleet. National tax reform, supported by the proposed Clean Corporate Vehicles Regulation, can help close this gap, cut oil dependence and create stronger demand for made-in-EU EVs.

What is the T&E Good Tax Guide about?

The T&E Good Tax Guide is a yearly publication (4th edition) which analyses and compares car taxation systems across Europe

The guide is complemented by an online tool that provides a complete and interactive overview. This analysis has been reviewed by an extensive team of collaborators from each country.

The Guide looks at all taxes paid by new passenger cars in 31 countries (EU-27, the UK, Norway, Iceland and Switzerland) as of May 2026. A distinction between cars registered by private individuals (40% of new registrations in the EU) or by companies (60% of new registrations) is made. Taxes paid in each country are based on the relevant specifications of the vehicle (price, CO₂ emissions, weight, air pollutants, engine capacity, etc.). This allows us to calculate which countries have the greenest tax systems.

The next figure gives a more detailed overview of the specific subsidies, car taxes and benefits included in the analysis.

Which countries are really incentivising companies to go electric?

Cars registered by companies represent about 60% of all new registrations in the EU and are therefore an important driver to accelerate electrification

Taxation plays a central role in shaping company car choices. One of the clearest indicators of whether a country is encouraging fleet electrification is the tax difference between owning an electric vehicle (EV) and a comparable petrol car. This tax difference shows how much less tax is paid for an EV over the ownership period compared with a petrol vehicle. The larger this gap, the stronger the financial incentive for companies to choose electric.

To understand whether tax systems really encourage companies to go electric, the tax difference must be compared against a reference point. In this analysis, we look at the company perspective - taxes paid by the employer over a standard four-year ownership period. We then compare this tax difference with the EV price premium: the additional upfront price of a compact electric car compared to a compact petrol model. For the compact segment, including passenger cars and SUVs, this EV price premium is set at €10,650. This figure is based on Autovista data and calculated as the weighted average of models sold in the EU.

This approach shows whether national tax systems help companies overcome the initial price gap at the point of purchase or leasing. While total cost of ownership (TCO) is a key metric for fleet decisions, taxation plays an important role in bringing EVs and petrol cars closer to the same starting point.

Only 9 out of 27 EU Member States (MS) have tax systems that clearly incentivise companies to switch to electric vehicles in the compact segment. Effective company car taxation remains the exception rather than the rule across the EU. The countries performing best include large markets such as France, the Netherlands, Belgium and Denmark, but also smaller Member States with lower GDP such as Portugal, Slovenia and Greece, showing that strong fiscal incentives are not simply a question of market size or national income, but of policy design. Across these markets, tax systems send a clear signal to corporate buyers to choose electric, and these countries are also among the electrification leaders in their regions (see Annex).

On the other hand, 18 out of 27 MS have tax systems that fail to incentivise companies to go electric, of which 12 MS have no incentive at all. This is particularly significant because several of Europe’s largest car markets - Germany, Spain, Italy and Poland - fall into this group. As a result, 68% of all compact corporate car registrations take place in countries with no clear tax signal to choose an EV (Group 2 and 3), and 49% in countries with no tax incentives at all (only Group 3).

The graph also shows that in almost all of the countries in the third group, petrol cars continue to receive substantial tax benefits. This is reflected by the black rectangles appearing to the left of the zero line on the x-axis, indicating that the tax system still favours petrol vehicles through VAT deductions and depreciation write-offs, rather than penalising their emissions and supporting the shift to electric.

Countries such as the Netherlands, Finland, Sweden or Austria have a high corporate EV share, but they are also beginning to scale back the tax incentives for these vehicles, which has narrowed the tax gap. However, the Netherlands is now moving to rebalance this approach for mixed-use cars: from January 2027, employers will face an additional tax on petrol and diesel company cars made available for commuting or private use.

Which tax tools are governments using to drive corporate car electrification?

Governments can push company fleets towards electric vehicles through different tax instruments

Some of these instruments apply to all buyers, both private and corporate, such as acquisition taxes, ownership taxes and purchase subsidies. Others are for companies specifically, such as the benefit-in-kind employer part (social security contributions), VAT deductibility and depreciation write-offs. Together, these measures determine whether the tax system makes an EV more attractive than a comparable petrol car.

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Belgium uses depreciation write-offs as its main lever to incentivise electric company cars. Since this year, this tax benefit is only available for EVs, creating a tax advantage of more than €6,500 over the ownership period. The impact of this policy is clear: corporate EV uptake rose from 8.8% in 2021 to 54.2% in 2025, making Belgium the market with the second-highest corporate EV share after Denmark.
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Slovenia starts from a low-tax baseline, with very limited acquisition and ownership taxes, but still creates an EV advantage through targeted corporate tax instruments: employer contributions on the benefit-in-kind plays an important role, with annual rates of 18% for Internal Combustion Engine (ICE) cars and 0% for EVs. This is reinforced by VAT deductions available only for EVs, in addition to a temporary purchase subsidy. That is the reason why why Slovenia’s corporate EV uptake stands out in the region, with an EV share of almost 14% - more than double that of neighbouring countries such as Italy, Slovakia, Romania, Czechia or Poland.
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Portugal focuses its EV incentives on tax instruments available to companies. On the employer benefit-in-kind part, BEVs are exempt up to a vehicle value of €62,500, while petrol cars face increasing rates based on price thresholds. The same logic applies to corporate tax benefits: VAT deductibility and depreciation write-offs are capped at €25,000 for petrol cars, compared with €62,500 for EVs. This corporate tax approach has led Portugal to reach a corporate EV uptake of 25% - more than three times the level of neighbouring Spain.
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France, by contrast, uses a broader approach: it applies a strong acquisition tax that affects both private and corporate buyers, while also using company-specific levers such as corporate ownership taxation and employer-side BiK contributions. France is a notable case because, together with Slovakia, they are the two countries where ownership tax applies only to companies. France’s tax reforms are already showing results: corporate EV uptake reached 41% by March 2026, almost double Germany’s level of 21%.

Tax systems are still rewarding company cars for their petrol use and higher emissions

Tax systems should not only incentivise EVs but also make polluting company cars less attractive

This matters because combustion cars will continue to be sold in the EU until at least 2035, and the vehicles entering the market today will shape the fleet for many years after that. This is especially relevant for corporate cars, since they account for around 60% of new car sales and, before entering the second-hand market, are driven roughly twice as much as private cars. If company car taxation continues to reward petrol use and higher emissions, it risks locking the EU into oil demand and avoidable CO₂ emissions for decades.

The following section assesses whether higher-consuming or higher-emitting car segments face a proportionate tax burden, and whether tax systems continue to shield petrol-intensive vehicles from the full cost of their oil use.

Unlike the previous section, which looked at incentives from the company perspective, this section takes the government perspective. It therefore includes the full tax burden applied to company cars, including employee-side benefit-in-kind taxation, to capture the overall fiscal signal governments use to address petrol consumption and CO₂ emissions. The analysis looks at two indicators:

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The first indicator, the oil-use tax burden index, measures the total tax paid over a four-year ownership period per litre of petrol consumed, assuming a company car is driven 30,000 km/year. This shows whether vehicle taxation reflects actual petrol consumption, and whether national tax systems help to reduce - or instead reinforce - oil dependence.
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The second indicator, the CO₂-intensity tax burden index, measures the four-year tax burden per unit of CO₂ emissions intensity. This allows a comparison of how strongly countries tax higher-emitting vehicles across different car segments.

Larger petrol cars lock drivers into higher fuel use and greater exposure to oil price volatility, while keeping Member States dependent on oil imports. To assess how Member States tax these vehicles, the analysis focuses on D-segment petrol cars. These vehicles consume around 17% more petrol than comparable C-segment cars over their lifetime, and companies account for 73% of their new registrations. This makes their fiscal treatment especially relevant, as corporate fleets are the main entry point for these cars into the second-hand market, where they continue to shape fuel use for years.

As the map shows, Member States send very different tax signals on petrol consumed by company cars, even within the same region. Nordic and Western countries generally place a higher tax burden on each litre of petrol consumed. In Western Europe, France taxes petrol use strongly at €10.3/l, while Germany effectively subsidises it at -€0.5/l, making it the clearest outlier among large markets. In Southern Europe, Portugal applies a much stronger signal than Spain - €4.5/l compared with €1.2/l. A similar gap appears in Central and Eastern Europe, where Slovenia taxes petrol use at €2.1/l, well above Poland’s €0.4/l.

These contrasts show that stronger corporate tax systems are possible also within regions. They also matter at EU level: Germany and Poland are among the two largest corporate car markets for intensive oil consumption cars (52% of all D-segment registrations), so weak taxation in these countries risks locking a large share of new company cars into higher oil consumption for years.

Member States fail to penalise additional CO₂ emissions consistently across vehicle segments

Car taxation should follow the polluter-pays principle: as vehicles become larger and more polluting, each additional gram of CO₂ per kilometre should face a stronger, or at least consistent, fiscal penalty

In most Member States, the tax burden does not rise proportionally with emissions intensity. Instead, larger petrol corporate cars are often taxed at a lower rate per additional gCO₂/km than smaller segments, weakening the incentive to choose less polluting vehicles.

This is particularly striking in countries where the tax burden barely changes across petrol segments, creating an almost flat tax treatment between smaller and larger company cars. Germany and Poland are the clearest examples, while Spain and Slovenia show more limited increases across petrol segments; all four countries remain well below the tax levels applied in France and Portugal, again showing that within EU regions, good examples exist and are possible.

Countries with slower EV uptake and weaker taxation of petrol cars risk becoming the main markets for new combustion vehicles. Until 2030, there will still be around 20 million new ICE vehicles entering the European car park via the corporate channel. A disproportionate share of remaining petrol registrations will be concentrated in CEE. This would deepen existing disparities and leave those Member States more exposed to oil price volatility and import dependence.

Registrations data from 2025 further support these findings:

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In CEE countries, 18.4% of new petrol corporate registrations were D-segment vehicles, compared with 12.5% in the rest of the EU. Companies accounted for 81% of all new D-segment petrol registrations in the CEE region.
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The contrast between Poland and Slovenia proves that Member States can shape this trend through policy. In Poland, 21.4% of new petrol corporate cars were D-segment vehicles, compared with 10.9% in Slovenia.

Why an EU Clean Corporate Vehicles Regulation is necessary

In December 2025 the European Commission proposed a Clean Corporate Vehicles Regulation (CCVR). This proposal for a new EU law sets targets for Member States to electrify cars registered by large companies.

They can achieve these targets, for example, by reforming their fiscal systems. Beyond cutting emissions and oil use, the CCVR could also support Europe’s industrial strategy by creating stronger demand for made-in-EU EVs. The CCVR has ignited a debate inside the European Parliament and the Council whether EU-level intervention to green corporate vehicles is truly necessary.

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This briefing explicitly proves that this is the case: currently, a mere 9 out of 27 Member States offer strong tax incentives for EVs, meaning that effective corporate fleet electrification remains the exception rather than the rule across the Union. This is further exacerbated by massive regional disparities in how oil consumption is taxed.
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Crucially, this briefing highlights that region, market size and national income do not necessarily dictate success; the best-performing nations include smaller economies like Portugal and Slovenia, proving that progress is a matter of deliberate policy design. Both countries successfully use targeted, corporate-specific tax tools to outpace their regional neighbors.
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Nevertheless, the vast majority of countries are moving far too slowly at a time when businesses and citizens are severely impacted by the EU’s continued oil dependency. Because corporate fleets are the primary gateway for highly polluting, large combustion cars that enter the second-hand market after just a few years, failing to act now locks the entire Union into prolonged fuel costs and economic vulnerability.
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If Europe wants to reduce oil imports and build a shock-proof system for corporate vehicles, national tax structures must be reformed in order to send a clear signal towards electrification. The proposed Regulation on Clean Corporate Vehicles is the ideal catalyst for change: zero-emission vehicle targets at Member State level will motivate national governments to rethink their fiscal system.