Passenger cars used for business purposes are now subject to two annual taxes: one on CO2 emissions and the other on emissions of atmospheric pollutants (which replaces the tax on the age of passenger cars from January 1, 2024).
As of January 1, 2024, the calculation method for the annual CO2 tax has changed.
Consequently, for the 2024 tax payable in 2025, the calculation will be based on a progressive scale.
For the calculation of the 2024 tax, to be paid in January 2025 :
All companies and sole proprietorships that use or own passenger transport vehicles as part of their business activities are concerned.
The person liable for the tax is therefore the vehicle owner or user.
Which vehicles are concerned?
- Passenger cars in category M1
Example: sedan, hatchback, station wagon, coupé, cabriolet and multipurpose vehicle designed to carry passengers and their luggage or goods in a single compartment)
- Category N1 multipurpose vehicles
Example: vehicles designed and built for the transport of goods with a maximum weight not exceeding 3.5 tonnes, and multi-purpose vehicles, i.e. vehicles whose registration documents are marked "van" or "CTTE" but which have several rows of seats. Exception: vehicles used exclusively for the operation of ski lifts and ski areas.
- van" type with at least 2 rows of seats
- and "pick-up truck" type with at least five seats.
Which vehicles will be exempt from paying the 2024 tax in 2025?
- Wheelchair accessible vehicles for wheelchair accessible vehicles;
- Vehicles used exclusively for rental by the taxpayer;
- Vehicles used for public transport (cabs, VTC, etc.);
- Vehicles used for driving lessons;
- Vehicles used for driving instruction or sporting competitions;
- Vehicles designed exclusively for commercial use (e.g. a food-truck) or industrial use;
- Vehicles designed exclusively for agricultural or forestry use;
- Lastly, vehicles used by non-profit associations.
On the other hand, the application of different scales depending on the system to which the vehicle belongs is retained (WLTP, NEDC or other vehicles).
The rate of this tax on atmospheric pollutant emissions will be determined according to whether the vehicle belongs to one of the three following pollutant emission categories:
- Category E, for vehicles powered exclusively by electricity, hydrogen or a combination of the two;
- Category 1, for vehicles powered by spark-ignition internal combustion engines and complying with Euro 5 or Euro 6 emission limits;
- the most polluting category, which includes vehicles that do not fall into any of the above categories.
In concrete terms, you need to refer to your Crit'Air sticker.
On the annual tax onCO2 emissions (formerly TVS)
WLTP scale
For vehicles registered for the 1st time in France from March 2020 onwards
NEDC scale
For vehicles owned or used since January 2006 and first registered after June 1, 2004
Scale for other vehicles
For information, the Finance Bill for 2025also provides for an increase in the malus on polluting vehicles.
Article 8 of the Finance Bill toughens the two malus taxes:
On the "malus CO2
- The "malus CO2" threshold is lowered by 5g in 2025 and by 7g in 2026 and 2027, to reach taxation from 99g/CO2/km.
- Its maximum rate is increased by €10,000 per year, reaching €90,000 in 2027.
On the "mass malus
- The threshold for triggering the "mass penalty" has been lowered by 100 kg, and would apply from 1,500 kg per vehicle.
- The rebate for non-rechargeable vehicles is limited to environmentally efficient vehicles.
Article 9 of the bill changes the way used vehicles are taxed:
- The reduction in the malus is adapted and will be greater for newer vehicles.
- From 2027, an additional rebate will be applied above 20,000 kilometers per year.
- In 2026, a retroactive malus will apply to the registration of any vehicle not subject to malus on first registration.
The final terms and conditions will only be known once the text has been promulgated.
Your chartered accountancy firm is at your side to support you in all your endeavours, so don't hesitate to contact us.
