Eight countries are included in scope and the focus is on passenger car taxation and not light commercial vehicles (LCVs).

Belgium1
Zero emission vehicles are exempt from road and registration tax in Flanders (private and professional buyers). The road tax and registration tax exemption for zero emission vehicles will be slashed for registrations as of 2026.

France2
CO₂ and weight penalties tighten. BEVs remain exempt for now but from July 2026 face partial weight tax. BIK rules favour EU-built eco-score BEVs. Big increase in BIK (+67%) for ICE, HEV and PHEV. From March 2025, fleets over 100 cars must meet BEV quotas or face annual penalties. Purchase subsidies are replaced by CEE (French energy saving certificate) support.

Germany3
Registration tax, currently BEVs which are first registered by 31 December 2025 are exempt from the vehicle tax for up to 10 years (but no later than 31 December 2030). However, the exemption is planned to be extended. For BEVs that are first registered by 31 December 2030 will qualify for the 10-year exemption lasting but no longer than 31 December 2035. The threshold (list price) for BEVs to qualify for the favourable BIK with “0.25% rule” has been increased from €70k to €100k for EVs purchased after 30 June 2025. PHEVs may qualify for reduced benefit in kind treatment if they meet certain electric range or CO2 emissions criteria. For BEVs acquired between June 30th, 2025 and 31 December 2027 there is a new depreciation schedule with 75% in the first year.

Purchase subsidy will come into effect in 2026 for new and used BEVs.

Italy4
New BIK scheme applies from January that is based on powertrain and not CO2 emissions. For BEVs it’s 10%, PHEV 20% and other powertrains 50%. Subsidies launched in September 2025, focused on low-income buyers and micro-firms.

Netherlands5
From 2025, BEVs lose full road tax exemption, now 75% discounted (30% from 2026). PHEVs with CO2 emissions below 50 g/km have had their discount reduced from 50% to 25% in 2025 and in 2026 there will no longer be a discount for PHEVs. Registration tax exemption also removed.

BEV BIK is 17% up to €30k and then 22% for above €30k. From 2026 BEVs will be taxed the same as ICE for BIK.

Portugal6
Corporate Autonomous Taxation continues to exempt BEVs up to €62.5k and allow for tax discounts for PHEVs up to €50k. ICE passenger vehicles remain penalised.

Spain7
MOVES III extended through 2025 with €400m for the acquisition of BEVs, PHEVs and charging infrastructure. Remains the BIK deduction (30% for PHEV and BEV). Additionally, the “sustainable mobility law” has been approved (8 October 2025) affecting vehicle taxation and incentives (law text not provided yet).

United Kingdom8
From April 2025, BEVs pay Vehicle Excise Duty (VED) (£10 first year, then £195 annually) plus Expensive Car Supplement (ECS) for vehicles with a list price above £40k. 2025-2026 tax year, BIK for BEVs rises to 3% of the P11D value, with further increases announced to 2030, reaching 9% in 2029-2030. PHEVs will be taxed on emissions and range until 2027-2028 and will then be taxed at 18% in 2028-2029 and 19% in 2029-2030. ICE vehicles will be taxed at a higher percentage and from April 2028 the tax will be increased by 1 percentage point each year.

Starting form 1 January 2025, the UK (in line with EU regulations) began applying the stricter Euro 6e-bis emissions standard to newly launched PHEV models. Existing PHEV models must comply by the end of 2025, though vehicles already on the road are exempt. Initial retesting showed that over 55% of PHEV snow exceed the 50g/km CO2 limit, with many emitting double their previous reported levels. As a results. several models now fall into higher company can tax (BIK) bands, causing some drivers’ tax payments to almost double.

London EV congestion-charge exemption ends December 2025. A new Electric Car Grant launched in July 2025 and valid until 2028-2029 for EVs under £37k.

Zero Emission Vehicles & EV Charge points – 100% First Year Allowances. From 31 March 2026 – End of 100% first year allowances for capital expenditure of zero emission cars and on EV charge points. As of the Autumn budget 2024, the UK government extended the 100% first-year capital allowance (FYA) for qualifying zero-emission cars and EV charging equipment to 31 March 2026. To benefit from FYA the vehicle must be new, unused and acquired outright. This relief allows businesses to fully deduct the cost of new, unused electric cars and charging infrastructure in the year of purchase.