Is it really worth investing in an electric car?

Several conditions must be met in order to benefit from the bonus for the purchase of an electric or hybrid vehicle.

You must be the holder or owner of a vehicle registered in Luxembourg, whether you are a legal person governed by private law or a natural person, resident or non-resident. In the case of a rental or leasing contract, you can benefit from financial aid provided that your name appears on the registration certificate or the contract and that the owner of the vehicle waives this aid. If you are a non-resident, you can obtain the bonus under a leasing contract provided that the leasing company has its registered office in Luxembourg or if between the date of first registration and the request for the bonus, you have moved and are therefore no longer a resident.

Your vehicle must have been ordered between 1 April 2021 and 31 March 2022 and its first registration must be before 31 December 2022. That said, it is not impossible that the government will extend this aid scheme beyond these two deadlines.

This will vary depending on the category of the vehicle.

You will receive financial aid of EUR 8,000 in the following four cases :
(1) Your car is full electric and its consumption does not exceed 18 kWh/km.
(2) You are part of a large family (at least 5 people) and your full electric car has 7 or more seats. In this case, its power consumption does not matter.
(3) You are the holder or owner of a fully electric van.
(4) You are the holder or owner of a hydrogen fuel cell car or van.

Your financial assistance will be limited to EUR 3,000 if the consumption of your full electric car exceeds 18kWh/km.

What if you have a plug-in rechargeable hybrid car or van? You are entitled to a bonus of EUR 1,500 but this is subject to two conditions. The CO₂ emissions of your vehicle do not exceed 50g/km and it must have been ordered and registered for the first time before 31 December 2021.

You must submit your request to the Environment Administration[1] at the earliest seven months and at the latest two years after the date of first registration. If you are a natural person and the owner of the vehicle, this deadline does not apply and you can submit your request as soon as the vehicle is registered in your name. The application form is available at guichet.lu.

Article 129d LIR (Income Tax Act) relating to the allowance for sustainable mobility (AMD) was repealed from 2021. In other words, the request for this allowance is only valid for the tax years 2017 to 2020. You can still ask the Administration des Contributions for a retroactive allowance if you are certain that you meet the following conditions. You were of legal age at the time of purchase. Your zero or low emission vehicle was purchased new (less than 6,000 km or less than 6 months after first registration) and used exclusively for private purposes. You have not benefited from such an allowance during one of the 3 previous tax years.

If you meet these conditions, you are entitled to a tax allowance of EUR 5,000 for an electric or hydrogen car with a registration date after 31 December 2016. This allowance is reduced to EUR 2,500 for a plug-in hybrid car with emissions that do not exceed 50g CO₂/km and with a registration date after 31 December 2017. Please note that this tax allowance is likely to be cancelled if you have benefited from one of the bonuses mentioned above for the purchase of your car. The allowance is in fact reduced by the amount of any direct aid payable by the Luxembourg State or by any other public body to finance the acquisition of the vehicle applying for the allowance.

01/2022