178. Deputy Paul Lawless asked the Tánaiste and Minister for Finance the extent to which the practicality of electric vehicle usage for workers operating in rural and regional areas was examined prior to changes being made to company car benefit-in-kind reliefs; whether concerns regarding journey distances, charging availability and charging downtime were considered; and if he will make a statement on the matter. [66967/26]

179. Deputy Paul Lawless asked the Tánaiste and Minister for Finance whether, in advance of Budget 2027, consideration is being given to retaining, extending or modifying the €10,000 original market value reduction for benefit-in-kind purposes in recognition of the continuing lack of adequate charging infrastructure and limited electric vehicle suitability for many rural employees; and if he will make a statement on the matter. [66982/26]

180. Deputy Paul Lawless asked the Tánaiste and Minister for Finance whether consideration is being given to a review of benefit-in-kind arrangements for employees residing in rural areas who are required to undertake significant business mileage and who have limited access to suitable electric vehicle charging infrastructure; and if he will make a statement on the matter. [66980/26]

I propose to take Questions Nos. 178, 179 and 180 together.

The existing vehicle tax structures in Ireland have a strong environmental rationale and the benefit-in-kind (BIK) structure, with CO2-based discounts and surcharges, is designed to incentivise employers to provide employees with low-emission cars in line with Programme for Government and Climate Action Plan commitments.

Section 121 of the Taxes Consolidation Act (TCA) 1997 provides that where a car is made available for the private use of an employee then the employee is chargeable to BIK. Where such a benefit is provided for an employee by his or her employer, the employer is required to include that notional payment as part of the employee’s emoluments and to deduct tax via the PAYE system accordingly.

A CO2-based BIK regime for employer provided vehicles became effective from 1 January 2023. From that date the taxable BIK amount is based on the car’s original market value (OMV) and the annual business kilometres driven, with new CO2 emissions-based bands determining whether a standard, discounted, or surcharged rate applies. The number of mileage bands was also reduced from five to four.

While the new regime provides for higher BIK rates for cars with above average emissions and for those with low business mileage, it should be noted that the rates remained largely the same in the lower to mid mileage ranges for the average lower emission car. Additionally, Battery Electric Vehicles (BEVs) and plug in hybrids, benefit from a preferential rate of BIK, while fossil-fuel vehicles are subject to higher BIK rates. This new structure with CO2-based discounts and surcharges is designed to incentivise employers to provide employees with low-emission cars. This brought the taxation of employer provided cars into step with other CO2-based motor taxes as well as with the long-established CO2-based vehicle BIK regimes in other EU Member States.

Furthermore, there is a BIK exemption on the installation of an EV charging facility by an employer at the home of a director or employee, subject to certain conditions.

Due to the impact of the new emissions-based BIK system on certain petrol and diesel cars, Finance Act 2023 introduced a temporary universal relief of €10,000 to the Original Market Value (OMV) of vehicles in Category A1-D, thereby reducing the amount of BIK payable. This measure applied to both cars and vans and meant that, when calculating the BIK liability employers could reduce the OMV by €10,000.

This was extended in Finance Act 2024. Finance Act 2025 further extended this measure, providing that the OMV reduction applies for the years of assessment 2026 to 2028, with the relief for 2027 and 2028 available on a tapered basis. This means that, for the years of assessment 2023 to 2026 inclusive, the OMV is reduced by €10,000, and by €5,000 and €2,500 for the 2027 and 2028 years of assessment, respectively.

It should be noted that an employee who uses an employer provided car mainly for carrying out business journeys (for example, a sales representative) will have generally greater business mileage. Mileage bands ensure that cars that are more integral to the conduct of the business benefit from lower rates of BIK. The reduction in the lower limit of the highest mileage band from 52,001 kilometres to 48,001 kilometres, introduced in the Finance Act 2023 and made permanent in the Finance Act 2025, means that employees with business mileage in excess of 48,001 kilometres can apply the lowest rates of BIK.

I would note responsibility for the development and delivery of Ireland’s EV charging infrastructure rests with the Department of Transport and is not a matter for the Department of Finance.

Finally, as the Deputy will appreciate, it is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget or Finance Bill decisions.