Value of fringe benefits for company cars

Country / jurisdiction: Sweden · Year: 2002 · Status: In force · Level: National · Type: Voluntary

A significant share of the new car sales consists of so-called benefit cars. A benefit car is a company car where the employer offers the employee to use it also for private driving. These cars risk becoming heavier and more fuel consuming than the rest of the vehicle fleet. To counteract this development, the rules have been gradually altered since 1997. Initially the changes aimed at making the employee pay for the fuel used for private driving and thereby increase the incentives for more efficient driving and less consuming cars.

In December 2001, the government implemented new legislation with lower benefit value for environmentally friendly cars driven on biofuels in order to stimulate the sale of new cars with these properties. More than a decade later, the same reasoning remains valid, although the rules have been changed several times, including the very definition of environmentally-friendly cars.

The benefit value for cars that can be driven by ethanol (E85), natural gas or biogas is lowered by 20 % compared to a similar gasoline driven model. The maximum reduction is SEK 8000 annually. The benefit value for hybrids or electric vehicles can be lowered by 40 % in comparison to corresponding conventional vehicle. The maximum reduction is SEK 16 000 annually. Starting from 2011, the benefit value is set at 60 or 80% of the corresponding non-environmentally friendly vehicle.

Starting in 2012, full reduction is only allowed for plug-in hybrids and vehicles running on biogas.

For cars driven by LPG, the benefit value can be lowered to the same level of corresponding conventional car.

The main incentive for the rules is to choose a car driven by alternative fuels, but also to reduce the distance driven. This is to be reached through a fuel benefit which is estimated as the market value multiplied by 1.2 when driving the car in private.

Official source: http://www.skatteverket.se/rattsinformation/reglerochstallningstaganden/meddelanden/2012/meddelanden2012/skvm201221.5.2b543913a42158acf800023139.html