Finland's company car taxation system faces significant changes as support for low-emission vehicles phases out. The current tax benefit for plug-in hybrid cars, which has provided 85 euros monthly relief since 2022, will end completely by year's end. This change directly impacts thousands of Finnish employees using company cars.
Leasing company data reveals plug-in hybrids have been extremely popular company car choices in recent years. Statistics show 37 percent of employees with company car benefits selected plug-in hybrids last year. Only fully electric vehicles proved more popular at 49 percent.
This tax benefit removal means practical monthly cost increases for hybrid car users. A company car driver with a plug-in hybrid will see their taxable benefit value rise by 85 euros monthly starting next year. The change creates a clear financial distinction between different types of environmentally friendly vehicles.
Finland's company car system operates through two main benefit types. The free benefit covers all vehicle costs for employees. The usage benefit requires employees to pay for their own fuel or electricity. The expiring tax relief specifically affects the free benefit category.
Fully electric vehicles maintain stronger support through 2029. Electric car users receive 170 euros monthly tax benefit, double the previous hybrid support. This creates a 290 euro monthly advantage for electric vehicles when combined with operating cost deductions.
The policy shift reflects Finland's evolving environmental transportation strategy. Government support increasingly favors fully electric vehicles over hybrid alternatives. This aligns with broader Nordic trends toward complete electrification of vehicle fleets.
Company car popularity patterns show dramatic changes. Last year's top five included plug-in hybrid models like Volvo XC60 and Toyota Yaris. Current data reveals eight most-ordered company cars now run purely on electricity.
Industry experts note the importance of monitoring these tax changes. Employees should review their company car arrangements before year-end. The taxation authority will confirm exact 2026 calculation formulas around November-December.
These taxation adjustments come during rapid electric vehicle adoption across Finland. Charging infrastructure expansion and improved battery technology make electric cars increasingly practical. The tax system evolution supports this technological transition.
International professionals in Finland should note these changes affect compensation packages. Company car benefits form significant portions of many employment contracts. Understanding these tax implications helps in making informed vehicle choices.
The Nordic approach to environmental vehicle incentives continues evolving. Finland's gradual shift from hybrid to electric support mirrors regional patterns. These policy adjustments aim to balance environmental goals with practical economic considerations for both employers and employees.