Electric cars could be exempted from paying VAT

The European Union is considering the possibility of eliminating VAT on the purchase of electric cars.

The European Union is preparing a large financial package to support the economies of European countries following the SARS-CoV-2 coronavirus pandemic.

The financial package will include a major component for the automotive industry, but it will be designed specifically to promote the sale of electric cars and the development of charging station infrastructure, according to a document in progress obtained by the Bloomberg news agency.

The most important document stipulation is the proposal to exempt electric cars from VAT in all European Union countries. This would mean that electric car prices would decrease by 17-25%.

The document also mentions the allocation of a € 20 billion fund at European level over the next two years under the "Purchasing Facility for Clean Vehicles" program to reduce carbon dioxide emissions, as well as the allocation of an investment fund of 40 or 60 billion euros for the development of electric propulsion systems.

For example, the price of a Skoda Citigo-e IV, theoretically one of the most affordable electric car, would fall from 19,990 euros with VAT to only 16,592 euros  - 14,993 euro without VAT, to which can be added a government bonus.

Last but not least, the document proposes doubling the funds for the construction of two million public charging stations for electric cars by 2025.

It is unclear at this time whether and when these measures will take effect. Via Bloomberg.

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