Image: Europäisches ParlamentThe German Handelsblatt reports that ‘key players in the EU Parliament aim to phase out tax privileges for combustion-engine company cars.’ The business newspaper cites an internal draft by a Social Democratic rapporteur in the European Parliament. According to the draft, EU member states ‘should no longer be permitted to grant tax or financial advantages to company cars powered by fossil fuels from 2028 onwards.’ Instead, only battery-electric vehicles ‘made in Europe’ would qualify for tax incentives.This aligns with the European Commission’s stated goal of making zero-emission or low-emission vehicles and ‘Made in the EU’ a precondition for vehicles receiving financial support from public funds. The Commission reinforced this objective in its latest Automotive Package in December, additionally announcing plans to introduce binding targets for the electrification of company cars in member states from 2030 onwards—with varying requirements for each country.Handelsblatt notes that the push to restrict tax privileges for company cars in the EU Parliament is part of a broader political power struggle that has alarmed the industry. The newspaper added: “Even if the proposal is unlikely to secure a majority in its current form, it signals the direction for negotiations in the Parliament during the EU legislative process.”The background is that the Automotive Package, following the Commission’s initial proposal in December, must still pass through the Parliament and the EU Council this year before it can take effect. As reported, negotiations are currently underway in Brussels to reach a compromise capable of securing a majority. A simple majority is sufficient in the European Parliament, while the EU Council requires a qualified majority. That means at least 15 member states representing at least 65 per cent of the EU population must approve the proposal.handelsblatt.com (in German)
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