Electric Vehicle Taxation in Switzerland: What You Need to Know

2023-11-08 11:38:13

Electric vehicles will be taxed like others from January 1, 2024. The Federal Council took this decision on Wednesday. Among the parties, only the UDC was opposed to the measure.

The single tax that will be newly levied on electric vehicles imported or produced in Switzerland amounts to 4%, as is already the case for other vehicles. The proceeds from this tax will be allocated to the Fund for National Roads and Urban Traffic (FORTA).

The measure was proposed by the Federal Council in January 2023 as a means of reducing the Confederation’s budget deficit. In 2023, the tax loss linked to the tax exemption for electric vehicles is estimated between 100 and 150 million francs. Without the implementation of this exemption, the government estimates losses for the period 2024-2030 between 2 to 3 billion francs.

The number of imported electric cars is constantly increasing. It increased six-fold between 2018 and 2022, going from 8,000 to 45,000. During the first half of 2023, 30,400 electric vehicles were imported, which represents an increase of 66% compared to the same period last year.

Unnecessary tax incentive

When the project was put out for consultation, the UDC was the only party opposed to the project, going further by wanting the removal of this tax for all types of motor vehicles. More than a third of the participants in the consultation, including economic circles, were in favor of implementation at a later date.

Electric cars have been exempt from tax since it was introduced in 1997. The aim at the time was to encourage the development of electric mobility. The Federal Council considers that this tax incentive is no longer necessary, given that the share of imported electric cars has increased significantly and that their price is approaching that of thermal vehicles.

In connection with this file, the part of the tax on mineral oils allocated to FORTA, which generally amounts to 10%, will be temporarily abolished, at least until 2028. This money will end up in the general coffers of the Confederation.

The Federal Council took this decision in January, provided that contributions to FORTA from vehicle tax start to rise once more.

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