Company car depreciation in Switzerland: ESTV rates, electric vehicles and VAT

In Switzerland, an electric company car is depreciated like any other motor vehicle: the Federal Tax Administration (ESTV / AFC) accepts 40 % a year on book value (declining balance) or 20 % a year on cost (straight-line). There is no cap linked to the car's price or emissions. What matters is that the expense is commercially justified and booked in the accounts.

This guide is written for finance teams and fleet managers who know other European tax systems and need the Swiss rules. It covers the rates, a four-year worked example, the battery, resale gains, VAT at 8.1 % and the private-use share. It also shows which cost line is still worth managing once depreciation is settled: home charging electricity, which Voltaback measures and reimburses at actual cost for more than 200 client companies.

Key points in 30 seconds

• ESTV rate: 40 % of book value, or 20 % of cost on a straight-line basis (Merkblatt A/1995).
• No cap: an electric car costing CHF 90'000.– is depreciated on its full value if its use is commercially justified.
• Condition: depreciation must be booked. What is not in the accounts is not deductible.
• Resale: proceeds above book value are taxable profit.
• VAT: the 8.1 % input tax on the purchase is recoverable; private use is subject to VAT.

Which depreciation rates does the ESTV accept for company cars?

The reference is the ESTV leaflet "Depreciation of fixed assets of business enterprises", known as Merkblatt A/1995 (Notice A/1995). It is based on Articles 27, 28 and 62 of the Federal Act on Direct Federal Tax (DBG / LIFD). For "motor vehicles of all kinds", the normal rate is 40 % of book value.

A footnote sets the straight-line rule: where depreciation is calculated on acquisition cost, the rates are halved. A car depreciated on a straight-line basis is therefore written off at 20 % a year, over five years.

These are normal rates, accepted without special justification. Higher depreciation is possible if it reflects a real loss of value that the company can prove. The leaflet is guidance rather than binding law, but cantonal tax administrations apply it across the country. Source: ESTV, Merkblatt A/1995 and ESTV, leaflets on direct federal tax.

How this compares with other countries

Expat CFOs often expect a price cap or a CO2-based limit on car depreciation, as several European countries have. Switzerland has neither. On the other hand, it has no separate tax balance sheet: the statutory accounts drive the tax result, so booking discipline matters more.

Special cantonal methods

The leaflet allows "special cantonal depreciation methods", such as immediate write-off or one-off depreciation. They also apply for direct federal tax if they produce the same result over a longer period. Some cantons therefore accept very fast depreciation of movable assets. Check the practice of your seat canton (Zurich, Zug, Geneva, Basel-Stadt or Vaud, for example) before making it a group policy.

Catching up on missed depreciation

Depreciation that was not booked cannot be caught up freely. The leaflet allows it only where poor business results prevented adequate depreciation in earlier years, and the company must prove it.

Worked example: an electric car costing CHF 60'000.–

A Zug-based AG buys an electric SUV for CHF 60'000.– excluding VAT for a sales employee. Here are both methods over four years:

The declining method brings the expense forward: CHF 38'400.– deducted in the first two years, against CHF 24'000.– straight-line. A profitable company pays less profit tax earlier, which helps cash flow.

The flip side: after four years, book value is usually well below the market value of a used electric car. The taxable gain on resale will be higher, as shown below.

Book and tax depreciation: the authoritative principle

Swiss tax starts from the statutory accounts under the Code of Obligations. This is the authoritative principle (Massgeblichkeitsprinzip / principe de déterminance): a company's taxable profit is the balance of its income statement, adjusted for items tax law does not allow (Art. 58 DBG).

Article 62 DBG draws the consequence: commercially justified depreciation is allowed as long as it is booked. What you do not record in the accounts cannot be deducted.

What this means in practice:

• Book depreciation every year, even in a weak year. Missed depreciation is usually lost.
• Excessive depreciation is added back by the cantonal tax administration. The part above accepted rates without justification becomes taxable profit.

For the wider tax picture of an electric company car in Switzerland, see our guide to electric company car taxation.

Is there a cap for expensive company cars?

No. Swiss tax law has no monetary cap on vehicle depreciation and no CO2-based limit. An electric car costing CHF 90'000.– is depreciated at the same rates as a CHF 30'000.– city car, on its full value.

The limit is qualitative: the expense must be commercially justified. A luxury car provided to a shareholder with no link to the business may be partly treated as a hidden profit distribution. That is a case-by-case assessment, not a fixed threshold.

For the employee, the car's price matters elsewhere: the private-use share of 0.9 % of the purchase price per month appears in item 2.2 of the salary certificate (Lohnausweis / certificat de salaire). The more expensive the car, the higher the private-use share.

Is the battery depreciated separately?

In practice, no. The battery of an electric car is part of the vehicle: it is bought with it, capitalised with it and depreciated at the same 40 % declining or 20 % straight-line rate. The ESTV has no separate rate for traction batteries.

The situation differs if the battery is leased separately: the rent is then an operating expense and only the car is depreciated. Replacing a battery outside the warranty is treated as an investment or as maintenance, depending on the amount and its effect on the car's useful life. Your fiduciary (Treuhand) will decide according to cantonal practice.

Leasing: no depreciation for the lessee

With an operating lease, the car stays on the lessor's balance sheet. The lessee does not depreciate it but books the lease payments as expenses, which gives a smoother tax effect.

For the salary certificate, the private-use share is based on the cash purchase price shown in the lease contract, excluding VAT. Buying versus leasing is covered in our article on electric company car leasing and tax.

What happens when the car is sold?

On sale, the difference between proceeds and book value is taxable profit (or a deductible loss). This is called recapture of depreciation: depreciation taken beyond the real loss of value flows back into profit.

In our example, the SUV is sold for CHF 22'000.– after four years:

• declining balance: book value CHF 7'776.–, taxable gain CHF 14'224.–;
• straight-line: book value CHF 12'000.–, taxable gain CHF 10'000.–.

Fast depreciation is therefore not a permanent saving but a tax deferral. It still helps cash flow, especially for a growing fleet.

For self-employed people and partnerships, the gain is part of self-employment income (Art. 18 DBG) and is therefore also subject to AHV/AVS social security contributions. Source: DBG, SR 642.11.

VAT: what the company recovers and what it owes

Input tax on the purchase

A VAT-registered company can recover the 8.1 % VAT paid on the purchase or lease of the car and on maintenance, to the extent the car is used for taxable activities. On our example, that is CHF 4'860.– of input tax.

Private use subject to VAT

Private use by the employee is a taxable supply. The ESTV accepts a flat rate: 0.9 % of the purchase price excluding VAT per month, at least CHF 150.–, treated as including VAT. The flat rate is only available for passenger cars used more than 50 % for business.

Calculation: 0.9 % × CHF 60'000.– = CHF 540.– per month. VAT due: CHF 540.– × 8.1/108.1, about CHF 40.50 per month, or roughly CHF 486.– per year. Source: ESTV, VAT Info 08 Private use.

VAT on charging electricity

Electricity invoiced to the company (charging on site, a charging card in the company's name) gives the right to deduct input tax, like fuel. For home charging, the electricity bill is in the employee's name: as a rule, the company does not deduct input tax on the amount reimbursed. Have your fiduciary confirm this, as it depends on your supporting documents.

What depreciation really changes in the TCO

Depreciation is the largest line in the total cost of an electric car, but it is a fixed line: once the price and method are set, it no longer moves. Energy, maintenance and use remain manageable.

Order of magnitude: 15,000 km a year at 18 kWh per 100 km is about 3,000 kWh at the meter, charging losses included. At the 2026 Swiss median price published by ElCom, 27.7 Rp./kWh, home charging costs about CHF 830.– a year. In Zug (21.9 Rp.) it is about CHF 660.–; in Basel-Stadt (33.2 Rp.) about CHF 995.–. Source: ElCom, electricity prices.

Across 50 cars, that is over CHF 40'000.– a year, with differences of 50 % depending on where employees live. This is where Voltaback comes in: the platform measures every kWh charged at home and reimburses it at the real tariff of the employee's contract, with no hardware. Voltaback relies on the home's MID-certified meter, not on a standalone cable meter. The measurement has been audited by an independent third party, with a relative error of 1.22 %.

Estimate this line for your fleet with the home charging cost simulator. The full method is in our fleet TCO guide.

Common mistakes and checks

1. Not booking depreciation in a weak year: it is usually lost.
2. Switching methods without reason during the car's life.
3. Depreciating the gross amount although VAT was recovered: the base is the price excluding VAT.
4. Forgetting VAT on private use.
5. Not budgeting the resale gain in the year the fleet is renewed.
6. Paying a flat charging allowance above CHF 60.– a month: the excess is treated as salary under the model expense regulations (Spesenreglement) of the Swiss Tax Conference (SSK / CSI).

Cantonal subsidies for charging infrastructure are covered in our article on workplace charging station subsidies, and annual vehicle taxes in our guide to electric car tax in Switzerland.

What each role should remember

• CFO and fiduciary: choose the method (declining for cash flow, straight-line for readability), apply it consistently and provide for tax on the resale gain.
• Fleet manager: residual value matters as much as the rate. Track mileage and condition to sell at the right time.
• HR and payroll: the 0.9 % private-use share in item 2.2 depends on the purchase price, not on depreciation. Electricity reimbursement must be documented to remain an expense reimbursement, outside AHV/AVS.

To manage all this data in one place, discover the Voltaback fleet manager space.

Manage the line that still moves: energy

Depreciation is decided once, at purchase. Electricity is paid every month, at prices that vary widely from one municipality to the next. Reliable measurement per car makes this cost predictable and consistent with your expense regulations.

To reimburse home charging at actual cost and build it into your fleet TCO, contact the Voltaback team.