Accelerated Capital Allowances for Electric Vehicles


Capital Allowances allow a business to gain relief from Corporation Tax on money spent on capital equipment purchases such as vehicles. The relief is received by allowing the company to reduce its taxable income by an amount equal to the pre-tax value of the asset. The company therefore “writes down” the asset against profits. They normally must do this over an 8 year period so 1/8th or 12.5% of the capital value of the asset is written down each year until 100% write down has been achieved at the end of year 8.

The total value of the relief to the business is therefore equal to 12.5% of the pre-tax value of the asset. Under normal Capital Allowances, this total benefit accrues over an 8 year period so. 1/8th of the relief is received each year.

Under the Department of Finance’s Accelerated Capital Allowance (ACA) scheme, 100% asset write down is permitted in year 1 allowing the full value of the tax relief benefit to be received in year 1 thus helping to stimulate a greater cash flow for the business. ACA is intended to stimulate businesses to buy more energy efficient products which include Electric Vehicles and their associated charging infrastructure. The ACA Scheme will be available until December 2017. The general qualification criteria for products can be found at the following website:

The ACA list is now incorporated into the Triple-E Register which is operated by SEAI. All EVs eligible for grants under the EV Grant Scheme will also be eligible for ACA. SEAI will automatically register EVs qualifying for the EV Grant Scheme with the ACA/Triple-E Register.

For passenger cars registered after 1st July 2008, the maximum allowable capital expenditure to which tax relief can be applied is as follows:

CO2 Band A, B, C (<= 155g/km)

Allowable Expenditure = €24,000 regardless of the actual cost of the car

CO2 Band D, E (156 to 190g/km)

Allowable Expenditure = the lesser of 12,000euro or 50% of actual cost of the car

CO2 Band F, G (> 190g/km)

Allowable Expenditure = 0

For all other vehicles, the full capital cost of the vehicle is allowable for the purpose of claiming Corporation Tax Relief.

These limits apply regardless of whether an Electric Vehicle or a Plugin Hybrid Electric Vehicle is purchased and apply to both standard Capital Allowances and Accelerated Capital Allowances.

Please check latest figures with the Revenue Commissioners as these may be subject to change from time to time 


Electric Vehicle Grants Overview

The Minister for Communication Energy and Natural Resources has approved grant support of up to €5,000 for the purchase of Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) available from 2011 to 2012. This support comes in addition to the VRT relief of up to €5,000 for BEVs and VRT relief of up to €2,500 for PHEVs as included in the 2011 Finance Act.

The target is to achieve 6,000 passenger vehicles in operation in Ireland by 2012. This target has been set in order to generate the critical mass necessary to assist Ireland in achieving its overall goal of ensuring that 10% of all vehicles (equivalent to 230,000 vehicles) are electric by 2020.

Ireland has substantial resources of wind and ocean energy accessible to it. In contrast only modest reserves of gas and oil have so far been identified in Irish waters. By storing these intermittent supplies of wind and ocean power, highly efficient Electric Vehicles therefore offer Ireland the opportunity to supply a significant proportion of its transport energy needs from its own energy resources while substantially reducing the associated CO2 footprint.

Advances in Lithium battery technology has led to the current development of passenger electric vehicles by mainstream suppliers such as Renault, Nissan and Mitsubishi. With ranges of 160km on a single domestic overnight charge and fuel cost savings of up to 70% based on night time electricity prices, the fleet of vehicles emerging will have significant appeal to consumers. More information on electric vehicles and hybrid vehicles is available on our website.

(source seai website)

For more information on this, visit thge seai website.