Company cars are generally undertaxed in the EU, distorting the economy, adding welfare costs to society including greater CO2 emissions, and generating artificial demand for larger cars.
[mailchimp_signup][/mailchimp_signup]These are among the conclusions of a new Danish study into the tax treatment of company cars, which presents new, nearly-EU-wide estimates of the levels of subsidies to company car users. The study, ‘Company Car Taxation’ by Copenhagen Economics, says direct revenue losses may be close to 0.5% of the EU’s GDP (€54 billion), with Belgium and Germany topping the charts with 1.2 and 0.9% respectively. It says evidence from Belgium and the Netherlands suggests that pure business use represents only 20-30% of company car use, the rest being private use.
