Electric Company Car BIK in Ireland: What Changes in 2027
From 1 January 2027 the reduction applied to the Original Market Value (OMV) of a battery electric company car in Ireland falls from €30,000 to €15,000: €5,000 of reduction for categories A1 to D plus €10,000 of EV relief. It drops to €2,500 in 2028 and disappears in 2029. The tax policy summary of Budget 2027, announced on 6 October 2026, lists no benefit-in-kind measure, so this scheduled taper stands. The category A1 rates stay at 15%, 12%, 9% and 6% of OMV depending on business kilometres, so a €55,000 Tesla driven 23,000 business km has a cash equivalent of €6,000 in 2027, up from €3,750 in 2026.
How the OMV reduction tapers from 2026 to 2029
Revenue deducts the reductions of the year from the OMV before applying the band rate. The standard reduction applies only to cars in categories A1 to D, and a category E car (above 179 g/km) receives none. Battery electric cars, new or used, also receive the EV relief, from which hybrids are excluded. Year by year, an electric car gets €45,000 in total for 2023 to 2025 (€10,000 plus €35,000), €30,000 in 2026 (€10,000 plus €20,000), €15,000 in 2027 (€5,000 plus €10,000), €2,500 in 2028 (the reduction for categories A1 to D only) and nothing from 2029. Budget 2027's tax policy summary lists no benefit-in-kind measure, so the amounts set for 2027 and 2028 apply as scheduled. After the reductions, the taxable OMV cannot fall below zero.
Category A1 rates by business kilometres
Since 1 January 2026 a 0 g/km car sits in category A1, where the cash equivalent is 15% of the reduced OMV up to 26,000 business km, 12% from 26,001 to 39,000 km, 9% from 39,001 to 48,000 km and 6% from 48,001 km. From 2023 to 2025 an electric car fell in category A, with rates of 22.5%, 18%, 13.5% and 9% for the same bands. The top band has started at 48,001 km since 2023, and this threshold became permanent on 1 January 2026. The band depends on the employee's business kilometres in the car over the calendar year, and travel between home and work counts as private. Without records of business and private use, the employer may assume 8,000 km are private.
Worked examples: the same Tesla in 2026, 2027 and 2028
Revenue's 2026 example takes an electric car with an OMV of €55,000 and 23,000 business km, in the 15% band: (€55,000 − €30,000) × 15% = €3,750. The employee pays €50 a month towards running costs, so €600 comes off and the notional pay is €3,150. With the 2027 reduction of €15,000, the same car gives (€55,000 − €15,000) × 15% = €6,000, or €5,400 after the same €600 of payments. In 2028 the €2,500 reduction for categories A1 to D leaves (€55,000 − €2,500) × 15% = €7,875 before payments. Payroll collects Income Tax, PRSI and USC on the notional pay.
Part-year cars, low business kilometres and payroll
For a car available for only part of the year, Revenue annualises the business kilometres (km × 365 ÷ days available) to pick the band, then multiplies the cash equivalent by days available ÷ 365. Employees who drive between 8,000 and 24,000 business km a year, work an average of at least 20 hours a week, spend at least 70% of their working time away from the employer's premises and keep a logbook of business kilometres and work purposes get a 20% reduction of the cash equivalent. In the 2027 example above, that relief would bring €6,000 down to €4,800. Revenue asks employers to review notional pay at least quarterly, so the business kilometre total needs to stay current through the year.
Why the logbook matters more in 2027
With a smaller reduction, every percentage point of the band rate applies to a larger taxable OMV. For the €55,000 car, moving from the 15% band to the 12% band is worth €1,200 of notional pay in 2027 (3% of €40,000), compared with €750 in 2026 (3% of €25,000). Odoproof captures each Tesla journey automatically with its date, distance in kilometres and start and end points, keeps a running total of business kilometres and exports a contemporaneous logbook, the record Revenue expects for the band and for the low business kilometres relief.
Sources
- How to calculate the taxable benefit (published 19 January 2026) Revenue
- Exemptions and reductions (electric vehicles) Revenue
- Employees with low business kilometres (published 19 January 2026) Revenue
- Employer provided vehicles not available for the full year Revenue
- Budget 2027: Tax Policy Changes Summary Department of Finance (gov.ie)
- Budget information (Budget 2027, 6 October 2026) Revenue
FAQ
Does an electric company car still get an OMV reduction in 2027?+
Yes. A battery electric car gets €15,000 in 2027: the €5,000 reduction for categories A1 to D plus €10,000 of EV relief. The total falls to €2,500 in 2028 and to nothing in 2029.
Did Budget 2027 extend the EV benefit-in-kind relief?+
No. Budget 2027, announced on 6 October 2026, lists no benefit-in-kind measure in its tax policy summary, so the reduction set for 2027 (€15,000 for an electric car) applies as scheduled.
Do plug-in hybrids get the EV relief?+
No. The EV relief is for battery electric cars only. A hybrid in categories A to D receives only the reduction for categories A1 to D, €5,000 in 2027.
Do the BIK rates change in 2027?+
No change is scheduled. The tax policy summary of Budget 2027 lists no benefit-in-kind measure, so the category A1 rates in force since 1 January 2026 (15%, 12%, 9% and 6% by business kilometres) continue, with the 48,001 km top band permanent since that date.
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