How your new electric vehicle can lower your income tax bill

Buying an electric car in Spain can also provide significant tax savings. To encourage electric mobility, the government has included a deduction for income tax in its new budget for those who buy or acquire an electric vehicle that is compatible with plans like the Plan MOVES III. This measure is part of the energy transition plan whose goal is to promote sustainable mobility and reduce the carbon footprint.

From 30 June 2023 until 31 December 2025, taxpayers can apply a reduction equivalent to 15% of the purchase price of a new electric vehicle in their annual tax declaration. The deduction applies to their total national income tax, after other general deductions.

What does this deduction for the purchase of electric vehicles consist of?

The deduction in income tax for the purchase of an electric vehicle means that taxpayers can lower their payable amount by up to 15% of the purchase price of a new car, up to a maximum baseline deductible amount of €20,000. This represents a maximum deduction of €3,000 in an income tax declaration, subject to a number of other requirements that we will mention below.

In short, when purchasers make a tax declaration for the fiscal year 2025, they can deduct a significant part of the vehicle’s price directly from their tax bill, making it a good financial incentive.

The purpose of this measure, prorogued through Royal Decree-law 3/2025, is to promote the sale of electric vehicles, in combination with other supports currently available such as the Plan MOVES III.

Types of electric vehicles which the income tax deduction applies to

The deduction applies to the following types of new vehicles, which must appear in the IDAE database and satisfy the requirements of the Plan MOVES III, and must also be classed as M1 passenger cars or L6e light or L7e heavy quads, excluding motorbikes and electric scooters:

• Purely electric passenger cars / 100% battery (BEV).
• Plug-in hybrid cars / with a minimum electric-only range of 30 kilometres (PHEV).
• Extended-range electric vehicles (EREV).
• Fuel cell vehicles (FCV and FCHV).
• Hydrogen cell electric vehicles.
• Electric motorcycles (categories L3e, L4e and L5e).
• Light and heavy quads (L6e and L7e).

Requirements for the tax deduction for purchasing electric vehicles

To claim the tax deduction, the following requirements must be met:

Registration date

The car must be new, for personal use and not associated with any business or professional activity. It must be registered for the first time between 1 January and 31 December 2025, and registered with the Ministry of Transport under the taxpayer’s name, who must retain ownership for at least three years.

If the purchase is paid in instalments, it is important to have paid at least 25% of the price between 28 June 2023 and 31 December 2025. Registration can be made up to the second fiscal year afterwards.

Maximum price for the electric vehicle

The price of the vehicle must not exceed the limit set under the Plan MOVES III, which varies by vehicle type (for example, passenger cars: up to €45,000, or €53,000 if it seats 8, motorbikes and quads, up to €10,000). If the purchaser claimed this deduction in previous years, it cannot be claimed again.

How much can I deduct?

As explained at the start, the deductible amount is 15% of the purchase price of the vehicle, up to a base limit of €20,000, which represents a cap of €3,000 per deduction. If you have received support under the Plan MOVES III, this must be subtracted from the purchase price before calculating the tax deduction.

Also, the deduction shall apply in one financial year (that of the purchase year) and cannot be apportioned to other years.

Can I also deduct the charging point?

Yes, along with the deduction for purchasing a car there is an additional 15% that applies to the cost of installing charging points in the taxpayer’s place of residence. This option aims to encourage domestic charging infrastructure, and it can be requested regardless of whether the purchaser has received help from the PLAN MOVES III.

This deduction has a limit of €4,000 per year, it is compatible with the deduction for purchasing a vehicle and can be applied in parallel, as long as the installation is complete before 31 December 2025.

What is the deadline for the deduction for purchasing my electric vehicle?

The deduction will apply in the tax declaration for the year of the purchase or when partial payment (at least 25%) was made. For example:

• If you purchase the car this year, you must deduct it from your declaration in 2026.
• If you pay 25% of the vehicle price this year and you register it in 2026, you can make the deduction in 2025.

It is essential to save the invoices, keep them to hand and up to date for the purchase and the payment slips in case the Tax Office ask you to submit them to validate the request for a deduction.

Where should we indicate these deductions in the tax declaration?

They must be included in the section for 'Deductions for environmental investments', in the tax declaration form. The Tax Office’s Renta WEB programme contains a field specifically for this called 'General deductions from the State Quota', within the section for 'Sustainable mobility'. The following details must be entered there:

• Vehicle category and type.
• Sale price (without VAT or expenses).
• Date of registration or part-payment.
• Seller’s NIF.
• Amount of public subsidy requested or received.

If you have a charge point, its details must also be entered. The system will later automatically calculate the relevant deduction in accordance with the amount declared.

Is it compatible with the Plan MOVES III?

This deduction is compatible with the direct support from the Plan MOVES III, which are non-refundable subsidies that directly lower the purchase price and can be as high as €7,000. However, it must be borne in mind that the help received from the Plan MOVES III is subtracted from the purchase price of the vehicle when calculating the deduction. These supports must also be declared as capital gains income tax for the year in which they were received.

The deduction for income tax applies to the amount paid after subtracting the support from MOVES III. That is, the public subsidy received must be declared as income for the income tax base, which may reduce the overall impact of the deduction.

Endesa’s electric mobility options

Buying an electric car not only helps to protect the environment but is a 'clean' alternative to the vehicles that run on traditional fuels and also helps your domestic economy in the short and long term, through tax savings by taking advantage of the income tax deductions and the government subsidy through the Plan MOVES III. Incentives like these add more appeal to the idea of joining the 'crusade' for electric mobility.

At Endesa we firmly believe in the transforming power of electric mobility, and we are committed to an eco-efficient future. This is why our Tempo Zero Tariff forms part of the range of offers for our customers.

Endesa’s Tempo Zero Tariff lets you save when charging your electric vehicle while helping to care for the planet. You can benefit from free consumption for the first 200 kWh each month between 1 am and 7 am, forever. Your commitment to sustainability will be even greater because all the energy used to charge your vehicle will be green energy.

What are you waiting for to start contributing to a more responsible form of transport? Move with more awareness and save on your bills.