This summary contains the key information from our webinar on 6 May 2025, hosted by Mike Sargent, who presents two major tax changes for vehicle fleets: benefits in kind and incentive tax. A graduate of KEDGE Bordeaux with 15 years of experience at Airbus in the United Kingdom and France, Mike has developed in-depth knowledge of TCO (Total Cost of Ownership) optimisation for car fleets, particularly with regard to new environmental and tax challenges.
>> To view the recording of the webinar (duration: 30 minutes), click here.
The new incentive tax: resulting from the LOM law
The Mobility Orientation Law (LOM) has long addressed the issue of greening vehicle fleets, but until now the targets it set were not accompanied by penalties.
The incentive tax is changing the game.
A quick reminder of the framework set by the LOM, which concerns:
- all companies with 50 or more employees
- with a fleet of at least 100 vehicles
- with a weight not exceeding 3.5 tonnes.
The LOM stipulated that 20% of the fleet should be composed of low CO2 emission vehicles in 2024, rising to 40% on 1 January 2027 and then 70% in 2030.
Annual incentive tax: what you need to know
This applies to fleets of 100 vehicles or more: you now need to have 15 low-emission vehicles in your fleet to be exempt.
💡But be careful, there is a distinction between low-emission vehicles (less than 50 g of CO₂/km as stated by manufacturers, which corresponds to plug-in hybrids, for example) and those with a low carbon footprint (less than 100 g of CO₂/km as stated by manufacturers, which corresponds to hybrids, for example).> / km as stated by manufacturers – which corresponds to plug-in hybrids, for example) and those with a low carbon footprint (= corresponding to 100% electric vehicles with an eco-score, which takes into account the country of origin of the battery, the weight of the materials, etc.).
Low carbon footprint cars count as 1.5 in the tax calculation: in other words, if you only buy vehicles of this type, you don't need to buy 15 to be within the limits, 10 will suffice!
Calculating the annual incentive tax
We won't lie to you, it's complex!
This tax takes into account the length of time the vehicles are kept. Let's imagine that a company with a fleet of 100 vehicles keeps them for 4 years, renewing a quarter of its fleet every year (25%), and that it needs 4.5 low-emission vehicles to reach 15. The tax will be calculated as follows: 4.5 x 25% = 1.125 cars1.125 x €2,000 = €2,250 incentive tax in 2025
Here is a table summarising the figures up to 2030, for a stable fleet of 150 cars and an average contract of 48 months:
The benefit in kind: a minor revolution!
On average, 65% of company car journeys in France are personal journeys. However, the charges applied to this "income" have long been subject to the 30% flat rate rule: 30% applied to the Total Cost of Ownership minus fuel - 40% if fuel was paid for by the company.
This rule has just been changed: since 1 February 2025, the flat rate has increased to 50% and 67%. However, the calculation is different for eco-rated electric cars and also if you buy the vehicle. Please do not hesitate to.
These new percentages have a significant impact on the company (social security contributions) but also on the employee, who ends up with less in their pocket but with an increase in their income tax!
In conclusion: what should be done?
- The benefit in kind remains unchanged for existing vehicles, except in the event of reassignment to another employee.
- The impact on both the company and the employee may require a review of the fleet policy:
→ Is it still beneficial to offer a company car rather than a flat-rate allowance?
→ Should the same calculation method be retained?
- How can electric cars best be integrated into your fleet? This is key to financial optimisation, but the change in usage must be supported, both by users and by the company.
- These changes are happening quickly, but keep a cool head: take the time to develop a multi-year strategy without delay. We are here to support you!
