3 Jul 17

Belgium okays mobility budget from 2018

Belgium has okayed the introduction of a 'mobility budget'. From the start of next year, every benefit car driver can exchange their vehicle for a lower tax rate in a cash for company car model.

In order to reduce pollution and congestion, the current Belgian government had promised to introduce a mobility budget, in order to curtail the rising number of corporate vehicles on the road. However, the initial plan to offer a wide range of mobility alternatives in lieu of a company car has been ditched, in favour of a simple tax advantage, which the beneficiary can spend as they please.   

This simplified mobility budget will allow anyone with a company car to exchange their vehicle for a cash amount that is taxed at the same rate – less than their regular salary. The amount will be increased by 20% if the employee also has a fuel card. 

The system requires the cooperation of both employers and employees: the former must offer it, the latter must request to benefit from it. 

To prevent abuse, i.e. the mobility budget being used to replace ordinary wages, the government has restricted access to current company car drivers. Once they take the money option, they can no longer have a car. The system cannot be used to replace other tax benefits. 

Many Belgian organisations and leasing companies have criticised the system as too non-committal – beneficiaries are insufficiently encouraged to choose other mobility modes, and may just replace a company car with a private one, perhaps a second-hand car that pollutes more, and does nothing to reduce congestion. 

The Belgian government will evaluate the system after one year, at the start of 2019.

Image: Zinneke, CC BY-SA 1.0

Authored by: Frank Jacobs