Electric Vehicle Policy in Ireland
The Irish government has set clear objective to reduce emissions and promote the use of electric vehicles (EVs) as a cleaner and more sustainable future of fleet transport. To achieve this goal, there are a range of incentives, including a reduced Benefit-in-Kind (BIK) tax rate for EVs.
What is BIK Tax?
BIK is a tax levied on the benefit employees derive from using an employer-provided vehicle for private purposes. The BIK calculation for EVs is based on the vehicle's Original Market Value (OMV), the level of business mileage driven, and the CO2 emissions of the vehicle.
BIK Calculations for EVs in Ireland
The BIK charge for an EV is calculated as follows:
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Determine the Cash Equivalent of the Vehicle (CEV): The CEV is the amount of the OMV that is subject to BIK taxation.
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Assess the Business Mileage: The amount of business mileage driven is used to determine the BIK rate. There are four BIK rate bands based on the business mileage driven:
Business Mileage (Kilometres) CO2 Emissions Category BIK Rate (%) Up to and including 26,000 A 22.5 26,001 to 39,000 B 18 39,001 to 48,000 C 13.5 Over 48,000 D 9 (Temporary Reduction from 52,000) E 10.5
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Include the CO2 Surcharge: There is a surcharge of 1% of the OMV for every gram of CO2 emitted over 120 grams per kilometre.
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Calculate the BIK Charge: The BIK charge is calculated by multiplying the CEV by the appropriate BIK rate, and then adding the CO2 surcharge.
Example of BIK Calculation for an Electric Vehicle in 2024
When an employee is provided with a company EV worth €50,000 in 2024, a €5,000 cash equivalent is applied (€50,000 minus the €45,000 relief). If the employee travels 35,000 km per year as part of their job, the BIK rate under band A for this mileage level is 18%. Consequently, the employee will have a total BIK notional pay of €900 (€5,000 multiplied by 18%) for the year.
How to calculate the BIK using an online calculator
- Go to the Revenue website: https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/index.aspx
- Click on "Benefit-in-Kind (BIK) for company cars"
- Click on "Calculate your BIK amount"
- Enter the OMV of the vehicle
- Enter the annual business mileage
- Select the business mileage band
- Click on "Calculate"
For more information, please visit the below resources:
- Benefit-in-Kind (BIK) for Electric Vehicles: https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-company-cars/exemptions.aspx
- Electric Vehicle Grants: https://www.seai.ie/grants/electric-vehicle-grants/
- Accelerated Capital Allowance (ACA) for Vehicles: https://www.seai.ie/business-and-public-sector/business-grants-and-supports/accelerated-capital-allowance/
- Electric Vehicle Home Charger Grants: https://www.seai.ie/grants/electric-vehicle-grants/electric-vehicle-home-charger-grant/
- Revenue Commissioners: [www.revenue.ie]
- Electric Vehicles Ireland (EVIA): [www.electricvehiclesireland.ie]
- Irish Motor Industry Federation (IMI): [www.imi.ie]
