Features
27 Oct 17

Belgian company car taxation to change radically

The Belgian government is planning a change in company cars taxation from 2018 and 2020 on.

These changes will have a large impact and will undoubtedly result in a considerable increase in TCO for Belgian fleet owners. The new law still has to be published but further changes are unlikely.

 

From January 1st 2018 on…

 

Self employed people (no companies) will see the fiscal deductibilty of their cars change. Up till now, they could deduct 75% of all professional automotive costs, not linked to the CO2-emissions of the vehicle. From 2018 on, the deductibility for the self employed people’s cars will be identical to the system used for companies, based on the CO2-emission of the car, but with a minimum deductibility of 75% until the end of 2019. From 2020 on, they will also have to cope with deductibilities as low as 50% or even 40%. 

For companies, nothing will change until January 1st of 2020. They keep on using the well known calculation of the deductibility percentage based on the emissions-grille established by the government in 2010.

 

From January 2020 on…

 

Self employed people as well as companies see the fiscal rules change. The deductibility of car costs will no longer depend on the CO2-grid as used today, but will be calculated following a new formula.

 

Fiscal deductibility passenger car = 120% - (0,5% x coefficient x CO2 - emissions per km)

 

Coefficient diesel and hybrid diesel = 1

Coefficient CNG = 0,9 (max 12 fiscal HP)

Coefficient gasoline and other fuels and CNG surpassing 12 fiscal HP = 0,95

Result = minimum 50% and maximum 100%*

*Costs related to cars with CO2-emissions over 200g of CO2 can only be deducted for 40%.

 

Belgian fleet management website Fleet.be says the average company car deductibility of 78% today will decrease to 65% with this new formula. A considerable extra cost.

Furthermore, from 2020 on, fully electrical vehicles will lose their fiscal deductibility of 120% and see the percentage decrease to 100%.

 

Hybrids are treated differently

 

In order to know what percentage of deductibility is to be used for plug-in hybrids, the government decided to look at the battery capacity of the car, and relate it to the total kerb weight of the vehicle.

In order to still be recognised as a “real” plug-in hybrid, the battery has to have a capacity of 0,6 kWh per 100 kg of vehicle weight. So for a car totalling 1.500 kg, the hybrid battery should have a capacity of at least 9 kWh.

If that is the case, the government allows the deductibility to be calculated based upon the official CO2-figure of the plug-in.

If the capacity is “insufficient” following the formula, the deductibility of the plug-in needs to be based on the emissions of the “non plug-in”-version of the same car. If that car has no internal combustion-driven alternative, the official CO2-figure of the plug-in car has to be multiplied by 2,5 in order to know what base is to be used for the calculation.

 

Traditional (non plug-in) hybrids keep a deductibility figure depending on the official CO2-emissions.

 

The future of plug-ins is unclear

 

Since these new rules will be implemented from January 2020 on for all cars registered from that date on, but also for cars having been registered before, it is good to know that the government allows all plug-in hybrids ordered before the 31st of December 2017 to continue using the present deduction schematics, allowing cars with less  than 50g of CO2-emissions to be deducted for the full 100%, and that even beyond 2020. So anyone considering a plug-in as a company car should order the car before the end of the year.

 

Sources: autonieuws.be, fleet.be and Le Soir

Photo credit: MINI

Authored by: Stijn Blanckaert