Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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128. To ask the Minister for Finance whether there are limits on the price of cars for which tax allowances are available. [50399/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Part 11C of the Taxes Consolidation Act (TCA) 1997 provides for a scheme of capital allowances and leasing expenses for business cars based on the level of CO2 emissions from the cars concerned. The amount of allowable expenditure for capital allowances purposes is determined by reference to the car’s level of CO2 emissions rather than on the expenditure incurred on the car. Section 19 of Finance Act 2019 revised downwards the emissions thresholds on which capital allowances and leasing expenses are based.

There is no upper limit on the expenditure of the car, however the amount of tax relief available is capped based on the emissions category. As a result, depending on the amount of the expenditure and the emissions category of the car, the amount of relief available may be less than the actual expenditure on that car.

Where expenditure is incurred on the provision or hiring of a car on or after 1 January 2021, the categories are divided into 3 different groups as follows:

• Group 1 contains categories A and B with CO2 emissions up to and including 140g/km. The allowable expenditure for this category of cars is the specified amount, currently €24,000, regardless of the cost of the car. Thus, wear and tear allowances are based on deemed expenditure of €24,000 even if the car costs more than this amount.
• Group 2 contains category C with CO2 emissions from 141g/km up to and including 155g/km. The allowable expenditure for this category of cars is the lower of 50% of the specified amount or 50% of the retail price of the car when new. Therefore, wear and tear allowances are calculated based on a maximum value of €12,000.
• Group 3 contains categories D, E and F with CO2 emissions that exceed 155g/km. These cars do not qualify for wear and tear allowances.

• Group 1 contains categories A, B and C with CO2 emissions up to and including 155g/km. The allowable expenditure for this category of cars is the specified amount of €24,000 even if the car costs more than this amount.
• Group 2 contains categories D and E with CO2 emissions from 156g/km up to and including 190g/km. The allowable expenditure for these cars is the lower of 50% of the specified amount or 50% of the retail price of the car when new. Therefore, wear and tear allowances were calculated based on a maximum value of €12,000.
• Finally. Group 3 contains categories F and G with CO2 emissions that exceed 190g/km. These cars did not qualify for wear and tear allowances.