2016 Tax Brochure

Company Cars
Foreword
Tax obligations relating to company cars
Employers can provide their employees with the use of a company car and allow them to use it other than
for business purposes this is called private use. Private use includes free-time motoring and commuting to
and from work.
Providing a company car has a series of financial consequences for both employer and employee.
Recovery of VAT
Tax-deductibility of car and fuel expenses and non-deductible VAT on those expenses
CO2 solidarity contributions payable by the employer to the NSSO;
a taxable fringe benefit in the hands of employees and company officers;
a disallowed expense in the employers hands.
This brochure gives you an overview of the financial and tax consequences for passenger cars, dual-purpose
vehicles and minibuses.
Light goods vehicles (commercial vehicles) are vehicles designed and constructed for the carriage of goods
and have a permitted weight not exceeding 3 500 kg. These commercial vehicles are subject to different
tax treatment from that applying to passenger cars. For details, please see our Tax Brochure Light goods
vehicles.
Most monospace (MPV), off-road (SUV) and luxury 4x4 vehicles do not meet the tax definition of a light
goods vehicle and are therefore taxed as passenger cars.

01-2016

Overview of tax news for the employer

Cost components
Car costs:
Financial rental, including the Vehicle
registration tax (1)
Maintenance and repairs
Tires
Assistance
Insurances
Risk arrangement
Relief vehicle
Road tax (2)

VAT (4)
Deductible VAT
Standard 35%
Maximum 50%

Tax deduction (5)

Car costs +
non-deductible VAT
based on CO2-emissions

Non-deductible VAT
= 100% - deductible VAT
tax deductible

Fuel
Interest
CO2-solidarity contribution (3)
Additional disallowed expenses (5.3)

n.a.
n.a.

75%
100%
100%
n.a.

Overview of tax news for the employee

Benefit in kind (6)
Flat-rate kilometre allowance (7)

Greening vehicle registration and road taxes but not for vehicles registered in the
name of a lease company
On 1 January 2016, new rules come into effect in Flanders for vehicle registration tax and road tax:
higher rates of vehicle registration tax;
a new method for calculating annual road tax.
The new vehicle registration and road taxes for those registering a (non-leased) new or second-hand
car in Flanders. The car fleet on the road remains unaffected. The Belgian Automobile Federation points
to the fact that the new diesel cars (which must fulfil the Euro 6 emissions standard and are therefore
much cleaner than older diesel engines) are very heavily taxed. For many Euro 6 diesels, the new vehicle
registration tax is several times the current rates.
The new rates also apply to company cars that are registered on or after 1 January 2016 in the name of a
company with its registered office in the Flemish Region.
For vehicles registered in a lease companys name, there is no change. For those vehicles, the rates continue
to be based on engine capacity and fiscal horsepower.

01-2016

Contents
1

Vehicle registration tax (BIV).................................................................................................... 4

1.1 What?............................................................................................................................. 4
1.2 Rates............................................................................................................................... 4

Road tax................................................................................................................................. 6
2.1 What?............................................................................................................................. 6
2.2 Rates............................................................................................................................... 6
2.3 Additional information..................................................................................................... 7

3 CO2 solidarity contribution....................................................................................................... 8

3.1 What?............................................................................................................................. 8
3.2 Formulae for calculating the CO2 contribution.................................................................. 8
3.3 For example..................................................................................................................... 8
4 VAT......................................................................................................................................... 9
4.1 Personal use with no employee contribution.................................................................... 9
4.2 Personal use with employee contribution........................................................................12
4.3 Questions.......................................................................................................................13
5

Tax deductibility of car expenses.............................................................................................14

5.1 What?............................................................................................................................14
5.2 Tax deductibility for corporation tax................................................................................14
5.3 Additional disallowed expenses with respect to the employer.........................................15
5.4 Tax deductibility for personal income tax........................................................................15

Benefit in kind for company cars............................................................................................16

6.1 What?............................................................................................................................16
6.2 Formula for flat-rate calculation......................................................................................16
6.3 Numerical example.........................................................................................................17
6.4 How is the benefit in kind imposed on the employee?....................................................17
6.5 Questions.......................................................................................................................17

Flat-rate kilometre allowance..................................................................................................18

Information sources................................................................................................................18

Vehicle registration tax (BIV)

1.1 What?
Vehicle registration tax is a one-off tax that is collected when a new or used passenger car, dual-purpose
vehicle, minibus or motorcycle is registered for use on public roads by one particular person.
The taxpayer is the individual or legal entity identified on the registration document. Following the vehicles
registration with the Vehicle Registration Department (Dienst Inschrijvingen Voertuigen or DIV) of the
Flemish tax authorities, the taxpayer will automatically receive a tax assessment notice.
When a vehicle is registered in the name of KBC Autolease, the vehicle registration tax is included in the
financial rental component of the monthly lease payment and can be booked as an expense according to
the tax-deductibility rules (see chapter 5 Tax-deductibility of car expenses).

1.2 Rates
With effect from 1 January 2011, the Flemish Region is empowered to collect the vehicle registration tax.
This applies for all individuals who have their domicile and all legal entities that have their registered office in
the Flemish Region.
On 1March2012, a new rate scale came into force for vehicle registration tax in the Flemish Region. The
new green registration tax means that the calculation is no longer based on the power of the engine. The
new calculation is based on type of fuel, age and certain environmental features of the vehicle such as CO2
emissions and engine euros standard. The new regulations provide for a transition period.
The new scheme does not apply to companies with leasing activities that meet certain conditions. The old
scheme still applies for the time being for leased vehicles.
Therefore, the tax for leased company cars that are put on the road by the leasing company is still calculated
on the basis of:
the power of the engine expressed in kilowatts (kW) or fiscal horsepower (hp);
the age of the vehicle, determined using the date of first registration in Belgium or abroad.
Vehicle registration tax (BIV)
applicable to passenger cars, dual-purpose vehicles, and minibuses
Diesel or petrol vehicles
Cyl. cap.
in l*

Age of the vehicle

hp

kW

Up to 12
months

12 to 24
months

24 to 36
months

36 to 48
months

48 to 60
months

0.1 1.5

0 to 8

0 to 70

61.50

61.50

61.50

61.50

61.50

1.6 1.9

9 and 10

71 to 85

123.00

110.70

98.40

86.10

73.80

2.0 2.1

11

86 to 100

495.00

445.50

396.00

346.50

297.00

2.2 2.7

12 to 14

101 to 110

867.00

780.30

693.60

606.70

520.20

2.8 3.0

15

111 to 120

1,239.00

1,115.10

991.20

867.30

743.40

3.1 3.4

16 and 17

121 to 155

2,478.00

2,230.20

1,982.40

1,734.60

1,486.80

> 3.5

> 17

> 155

4,957.00

4,461.30

3,965.60

3,469.90

2,974.20

Cylinder capacity in litres.

Note: if the power of a given engine expressed in fiscal horsepower (hp) and kilowatts gives rise to the
levying of a different amount of the registration tax, the highest amount of tax is payable.
Most monospace (MPV), off-road (SUV) and luxury 4x4 vehicles are not deemed to be light commercial
vehicles for tax purposes and are therefore taxed as passenger cars.

If a leased vehicle is registered in the Flemish Region in the name of the lessee instead of the name of the
lessor (KBC Autolease), the tables above do not apply and the new green registration tax scheme applies.
You will find an overview of all the rates at
http://belastingen.vlaanderen.be/sites/default/files/atoms/files/Verkeersbelasting_brochure_nieuw.pdf
To properly calculate your vehicle registration tax, you can use:
the calculator on the Flemish tax authorities website at http://belastingen.vlaanderen.be;
or
the BIV-VKB calculator app, which is available at http://belastingen.vlaanderen.be/app-simulatie-biv-vkb.
The figures obtained using the calculator, by whatever application, are purely for information purposes and
are not legally binding.

Road tax

2.1 What?
The road tax is an annual tax levied on motor vehicles used to transport people or goods by road.
For passenger cars and related vehicles, the taxpayer is the individual or legal entity identified on the
vehicles registration certificate.
The road tax is automatically payable with effect from the registration with the Vehicle Registration
Department (DIV).
When the vehicle is registered in the name of KBC Autolease, the road tax is a component of the monthly
lease payment and can be booked as an expense according to the tax-deductibility rules (see chapter 5 Taxdeductibility of car expenses).

2.2 Rates
With effect from 1 January 2011, the Flemish Region is empowered to collect the annual road tax.
This applies for all individuals who have their domicile and all legal entities that have their registered office in
the Flemish Region.
From 1 January 2016, the calculation is based on the vehicles taxable continental horsepower (HP), CO2
emissions, European standard and fuel type.
The new scheme does not apply to companies with leasing activities that meet certain conditions, and
so the road tax on leased company cars still needs to be calculated based on the power of the engine,
expressed as taxable continental horsepower (HP).
Road tax for passenger cars
Cylinder capacity
(in litres)

Horsepower for tax purposes (hp)

0 to 0.7

4 and less

0.8 to 0.9

Amount of the road tax

(including surcharge)
77,35 euros
(minimum tax)
96.76 euros

1 to 1.1

139.92 euros

1.2 to 1.3

182.82 euros

1.4 to 1.5

226.12 euros

1.6 to 1.7

269.28 euros

1.8 to 1.9

10

312.05 euros

2.0 to 2.1

11

405.11 euros

2.2 to 2.3

12

497.90 euros

2.4 to 2.5

13

590.57 euros

2.6 to 2.7

14

683.63 euros

2.8 to 3

15

776.42 euros

3.1 to 3.2

16

1,017.06 euros

3.3 to 3.4

17

1,257.83 euros

3.5 to 3.6

18

1,498.60 euros

3.7 to 3.9

19

1,738.84 euros

4 to 4.1

20

4,2 and higher

20 and higher

1,979.47 euros
1.979,47 euros . 107,84 euros
foreach HP higherthan 20

Vehicles that run on LPG are subject to an additional road tax.

Rates valid from 1 July 2015 to 30 June 2016. Indexed annually on 1 July.
6

2.3 Additional information

Additional information on vehicle registration tax (BIV) and road tax can be obtained from:
Agentschap Vlaamse Belastingdienst (VLABEL Flemish Tax Authorities Agency)
Vaartstraat 16 9300 Aalst
Tel.: 1700 (Flemish info line)
http://belastingen.vlaanderen.be/verkeersbelastingen

You will find an overview of all the rates at

http://belastingen.vlaanderen.be/sites/default/files/atoms/files/Verkeersbelasting_brochure_nieuw.pdf

CO2 solidarity contribution

3.1 What?
When an employer provides their employee with a vehicles that can be used other than for business
purposes, the employer has to pay the NSSO (RSZ) a CO2 solidarity contribution.The contribution is due
regardless of how the vehicle is financed.
The contribution is not due by self-employed company officers or the self-employed in general.
Passenger cars, dual-purpose vehicles, minibuses and light commercial vehicles are all subject to the CO2
solidarity contribution.
The CO2 contribution is fully tax-deductible.

3.2 Formulae for calculating the CO2 contribution

This monthly contribution depends on the vehicles CO2 emissions and type of fuel, and is a
fixed amount. The amount is also linked to the health index of September 2004 and is adjusted
each year in January. The indexation coefficient is 1.2267 with effect from 1 January 2016.
CO2 solidarity contribution
Type of fuel
Diesel
Petrol

Indexation
coefficient

CO2 emissions

Base formula

Known

{[(CO2 in g/km x 9.00 euros) 600] / 12}

Unknown

{[(165 x 9.00 euros)  600] / 12}

90.47 euro

Known

{[(CO2 in g/km x 9.00 euros) 768] / 12}

Calculation

Unknown

{[(182 x 9.00 euros)

768] / 12}

Result
Calculation

x 1.2267

88.93 euro

Lpg

{[(CO2 in g/km x 9.00 euros) 990] / 12}

Calculation

Electric

20.83 euros

25.55 euro

These formulae are valid with effect from 1 January 2016.

The correct CO2 emissions are stated on the vehicles certificate of conformity.
The monthly contribution cannot amount to less than 25.55 euros.
An LPG vehicle is a converted vehicle that was originally fuelled by petrol. The formula uses the CO2
emissions of the petrol vehicle.

3.3 For example

The monthly CO2 solidarity contribution for a diesel vehicle with
CO2 emissions of 115 g/km amounts to:
[((115 x 9.00 euros) - 600)/12] x 1.2267 = 44.47 euros

VAT

The employer pays the leasing company an amount each month or quarter to lease the company car for its
employee. This amount is subject to 21% VAT. Employers/lessees registered for VAT can reclaim part of the
VAT paid.
Since 1 January 2013, new mandatory VAT rules apply:
The VAT deduction is immediately restricted on the basis of the private use;
The method of calculation depends on whether or not an employee pays a contribution for use of their
company car;
The rules are applicable to both purchased and leased vehicles;
The rules also apply to all the expenses related to the vehicle that are taxed with VAT, such as fuel,
maintenance, repairs, and purchases of accessories;
There is no longer any VAT levied on the benefit in kind (if there is no employee contribution);
The maximum VAT deduction for passenger cars is 50%.
The non-deductible VAT on car expenses and fuel expenses can be booked as an expense according to the
tax-deductibility rules (see chapter 5 Tax-deductibility of car expenses).
The new rules came into force on 1 January 2013. Therefore the old rules can be applied for 2012, with
which, in addition to the 50% deductibility limit, VAT must also be paid on the benefit in kind. However,
taxpayers can also opt to already apply the new rules for 2012.

4.1 Personal use with no employee contribution

If a company car is made available with no contribution from the employee, the VAT deduction must be
limited according to one of three methods imposed by the VAT authorities.
4.1.1 Method 1
Kilometre recording for work-related travel
Applicable to passenger cars and light commercial vehicles
This method means a number of details must be recorded and kept for each vehicle:
Daily journeys for professional purposes:
- Date of the journey
- Starting address
- Finishing address
- Number of kilometres driven per journey
- Total number of kilometres driven per day
The starting and finishing numbers of the kilometre indicator on an annual basis
The kilometre recording can be maintained both manually, e.g., using a logbook, and automatically,
e.g.,using an adapted GPS system.
The professional portion is calculated as follows:
Professional use in % =

number of km professional use

total distance

x100

The maximum VAT deduction is, in all cases, 50% for passenger cars.

4.1.2 Method 2
Partially flat-rate calculation for professional use
Applicable to passenger cars
Professional use for each vehicle is calculated on the basis of a formula with a number of fixed factors:

Private in use % =

(distance home to work x 2 x 200 working days) + 6,000 km

Total distance in km

x100

Professional use in % = 100% - private in use %

Distance home to work
Total distance in km
200 working days
6,000 km

=the actual distance between the home address to the registered office or
local office in km
=the actual distance driven in a calendar year in km (vehicle kilometre
indicator)
=flat-rate number of working days
=flat-rate calculated number of kilometres for private use

The maximum VAT deduction is 50%.

This method may only be used when there is a fixed user and only one car per user.
4.1.3 Method 3
Fixed-rate deduction
Applicable to passenger cars
The professional usage is set using a general flat rate:
Professional use in % = 35%
This method:
Must be applied to all passenger cars of the company or VAT group that are used for both work and
private purposes.
Must be applied for a minimum period of four calendar years.
4.1.4 Method 4
Fixed-rate deduction
Applicable to light commercial vehicles used for both work and private purposes
The professional usage is set using a general flat rate:
Professional use in % = 85%
This method:
is only applicable if the light commercial vehicle is mainly used to transport goods, materials or equipment
as part of business activities. (if this condition is not met, then professional use will be calculated based on
a general flat rate of 35%).
must be applied to all mixed-use light commercial vehicles belonging to the company or VAT group.
must be applied for a minimum period of four calendar years.

10

4.1.5 Points of attention

The first and second methods can be combined with each other for the various vehicles of the same
company. This option applies for the (current) calendar year.
Under the first and/or second methods, a separate overall average deduction percentage can be applied
for all the vehicles of the same type (passenger cars, light commercial vehicles). The average percentage
is equal to the sum of the individually calculated percentages divided by the number of vehicles.
The fixed-rate deduction method (methods 3 and 4) per category (passenger cars/light commercial
vehicles) may not be combined with another method. The fixed-rate deduction method as it applied to
passenger cars may be combined with method 1 as it applied to light commercial vehicles and vice versa.
In the case of a VAT group, all companies must opt for the same method per vehicle category (passenger
cars/light commercial vehicles: either the fixed-rate deduction method (3 or 4) or method 1 and/or 2).
After the end of the first year, there must be a review every year if it appears that the actual amount
driven for work purposes for the preceding year differs from the initially estimated professional portion.
Needless to say, no review is required with methods 3 and 4.
The non-deductible VAT can be introduced at the end of the financial year as expenses according to the
tax deductibility percentages (see point 5).
If you lease a company car from KBC Autolease, you will only pay VAT on the difference between
the investment value and residual value. Conversely, if you buy your car, you must pay VAT on the full
purchase price.

11

4.1.6 Cijfervoorbeeld personenwagen zonder bijdrage van de werknemer

Method 1

Method 2

Method 3

Kilometre recording

Flat-rate calculation
of private use

General flat
rate

(home to work x 2 x 200) + 6,000 x 100

total distance

number of km prof. use x 100

total distance

100% - private use in %

35%

Formulas
Private use
in %
Professional use
in %
Details needed
Professional kilometres

20.000 km

Total distance

32.000 km

32.000 km

Home to work A

10 km

Home to work B

30 km

Home to work C

50 km

Professional use in % - result

Home to work A 10 km
Home to work B 30 km

63%

Home to work C 50 km

A 10 km

69%

B 30 km

44%

C 50 km

19%

35%

VAT deduction in % - result (1) limited to maximum 50%

Home to work A 10 km
Home to work B 30 km

50%

Home to work C 50 km

A 10 km

50%

B 30 km

44%

C 50 km

19%

35%

VAT calculation how much is deductible and how much is not deductible?
Monthly lease

500.00 euros

21% VAT (2)

105.00 euros

VAT deduction (3)=

(1)x(2)

52.50 euros

Total VAT cost

= non-deductible VAT
= (2) - (3)

52.50 euros

500.00 euros

500.00 euros

105.00 euros

105.00 euros

A 10 km

52.50 euros

B 30 km

45.94 euros

C 50 km

19.69 euros

A 10 km

52.50 euros

B 30 km

59.06 euros

C 50 km

85.31 euros

36.75 euros

68.25 euros

4.2 Personal use with employee contribution

If the employee pays a net contribution for the private use of the vehicle, there is an issue of a lease subject
to VAT. This leads to a combined VAT levy:
VAT on the vehicle expenses with respect to the employer: limited deduction of 50%.
VAT of 21% levied on the contribution paid by the employee.
4.2.1 VAT on the vehicle expenses
The VAT authorities maintain the position that in this case as well, the employer cannot be deemed to be
practicing the leasing of automobiles, which means the 50% deductibility limit continues to apply.

12

4.2.2 VAT on the employees contribution

The net contribution from the employee contains the VAT (at 21%), which must be paid by the employer via
its VAT return.
The VAT authorities also set a minimum criterion for VAT for the employees contribution, which means
there will be an addition of VAT if the employees contribution is less than the minimum value (or normal
value).
This normal value is calculated as follows:
Normal value = annual vehicle expenses x (50% - % actual professional use)
The actual professional use must be calculated using one of the methods listed under point 4.1.
Only if the professional use defined in this way is lower than 50% will there be actual taxation based on
the normal value. If method 3 (general flat rate of 35%) is selected, the normal value is equal to 15% of
the annual vehicle expenses.
The VAT authorities have made it mandatory to calculate the minimum value for each vehicle.
On the basis of this method, employers can determine the personal contribution in such a way that the
same situation is obtained as making the vehicle available at no cost. If the required contribution is higher
than the normal value, this will lead to a higher VAT levy.
4.2.3 Numerical example with contribution from the employee
High contribution from employee

Low contribution from employee

Annual vehicle expenses

500 x 12 = 6,000 euros

500 x 12 = 6,000 euros

Employees contribution

150 x 12 = 1,800 euros

50 x 12 = 600 euros

Method 3 = 35%

Method 3 = 35%

1,260.00 euros

1,260.00 euros

VAT deduction of 50%

630.00 euros

630.00 euros

Non-deductible VAT (1)

630.00 euros

630.00 euros

1,800 / 1.21 x 21% =

312.40 euros

600 / 1.21 x 21%=

104.13 euros

6,000 x (50% - 35%) =

900.00 euros

6,000 x (50% - 35%) =

900.00 euros

900 x 21% =
189.00 euros

900 x 21% =
189.00 euros

0.00 euro

189.00 104.13 =
84.87 euros

942.40 euros

819.00 euros

Details needed

Professional use
select 1 of the 3 methods
VAT calculation
21% VAT on the vehicle expenses

21% VAT on employee contribution (2)

= employee contribution / 1.21 x 21%
Calculation of normal value
= annual vehicle expenses x (50% professional use)
VAT on the normal value (3)
= normal value x 21%
Additional VAT if (3) > (2)
equal to = (3) - (2) = (4)
Total VAT cost = (1) + (2) + (4)

4.3 Questions
For general questions, call the Contact Centre of the FOD Finance on +32 2 572 57 57.
For more specific questions, it is best to contact your local VAT inspection office.

13

Tax deductibility of car expenses

5.1 What?
Tax deductibility means that certain expenses can be partially or fully deducted from income. These
expenses reduce the taxable base and therefore also the corporation tax.

5.2 Tax deductibility for corporation tax

5.2.1 Deductibility of car expenses with regard to benefit in kind
The tax authorities have made it clear in their circular, AFisc 30/2014, that the cap for deducting car
expenses for corporation taxation purposes is only applicable to those costs which exceed the sum of the
benefit in kind payable by the employee.
In other words, a company can deduct 100% of the car expenses equivalent to the amount of the benefit in
kind payable by its employees. This rule also applies retroactively since 1 January 2012.
How exactly is this done?
The benefit in kind is broken down into a fuel component and a component for other car expenses. In
practice, the 30/70 ratio is used:
30% of the benefit in kind is deducted from the fuel costs;
70% of the benefit in kind is deducted from the car expenses.
5.2.2 Tax deductibility rates
The remaining car and fuel expenses (i.e. after deducting the amount for benefit in kind) are subject to the
deductibility cap.
A distinction is made between the various kinds of expenses:
The annual car expenses and the non-recoverable VAT can be included as expenses according to the
tax deductibility rates, calculated based on the cars CO2 emissions and fuel type. There are 8 categories
ranging from 50% to a maximum of 120% deductibility. The tax authorities base the applicable category
on the CO2 emissions as listed on the vehicle registration certificate.
Since 1 January 2010, only 75% of the fuel costs and non-recoverable VAT can be deducted for both
personal income tax and corporate income tax.
The interest is 100% tax-deductible.
Tax deductibility rates for the 2015 income year
CO2 emissions in g/km
What?

Petrol / LPG /
natural gas

0 60

0 60

100,00%

Electric
0

Car expenses

Tax deductibility

Diesel

120,00%

61 105

61 105

90,00%

106 115

106 125

80,00%

116 145

126 155

75,00%

146 170

156 180

70,00%

171 195

181 205

60,00%

> 195

> 205

50,00%

Interest

100,00%

Fuel

75,00%

14

 Deduction for diesel vehicles is limited to 50% if they have CO2 emissions of more than 195 g/km or if the
Vehicle Registration Department has no available data concerning their CO2 emissions.
Deduction for petrol vehicles is limited to 50% if they have CO2 emissions of more than 205 g/km or if the
Vehicle Registration Department has no available data concerning their CO2 emissions.
5.2.3 Tax benefit
The tax benefit is then equal to the sum of the costs (car expenses, fuel costs and interest) multiplied by
therespective tax deduction (see table) and multiplied by the rate of corporation tax (maximum of 33.99%).
5.2.4 Parking and garage costs
The CO2 deductibility limit also applies to parking and garage expenses for company vehicles.
The CO2 dependent deductibility limit for corporation tax does not apply to costs for parking or garage
spaces for vehicles belonging to staff members or to customer parking spaces. These costs are 100%
deductible.
5.2.5 Refunded parking costs
The CO2 dependent deductibility limit also applies to refunds made to employees for parking costs incurred
on their business trips.

5.3 Additional disallowed expenses with respect to the employer

Part of the additional tax burden on company vehicles as a result of the new legislation1 will be recovered
from the employers.
17% of the taxable benefit that is calculated for employees using the set formula below (see point 6.2)
is added to the disallowed expenses (i.e. increase in non-deductible costs for the employer and thus an
increase in the taxable result) and is, therefore, subject to corporation tax.
The actual cost is equal to the taxable benefit x 17% x 33.99% (at the standard rate of corporation tax).
The additional disallowed expenses are at least 215.50 euros (i.e. 17% of 1,250 euros) and this results in
an additional cost of at least 72.23 euros (i.e. 212.50 euros x 33.99%).

5.4 Tax deductibility for personal income tax

For self-employed people, members of the liberal professions and employees who are taxed through
personal income tax, the tax deductibility of car expenses and fuel is 75%, regardless of the CO2 emissions.
The deductibility of car expenses for the amount of the benefit in kind can also be applied to self-employed
persons subject to personal income tax insofar as they offer a company car to an employee and these
benefits are taxed by way of the pay slip.
Because all costs are deductible at a rate of 75% in this case, a distinction must be made between fuel
expenses and the other car expenses.

Act of 28 December 2011.

15

Benefit in kind for company cars

6.1 What?
Employees and business managers whose employer or company has provided them with a company car
(passenger car, dual-purpose vehicle or minibus) free of charge, and who are also authorised to use this
vehicle for personal purposes, will be taxed a flat-rate benefit in kind.

6.2 Formula for flat-rate calculation

The following flat-rate formula applies with effect from 1January2012.
Benefit in kind =
list price x CO2 emissions percentage x 6/7 x car age percentage
What is the vehicle list price?
- List price of the vehicle in new condition when sold to a private individual
- Including options
- Including actual VAT paid
- Without taking into account any discount, reduction, rebate or refund.
To check the list price (Auto-i database of federauto) used to calculate the benefit in kind, a request can be
submitted on the website of the FOD Finance at http://ccff02.minfin.fgov.be/webForm/public/atn-vaa.jsf
Percentage based on the CO2 emissions of the company car
- Standard percentage of 5.5%
- for a diesel vehicle with CO2 emissions of 89g/km
- for a petrol vehicle with CO2 emissions of 107g/km
- +0.1% per 1 g/km more up to a maximum of 18%, or
- -0.1% per 1 g/km less with a minimum of 4%
Percentage car age
A month already started counts
as a complete month

Percentage of the list price used for

calculatingthebenefit in kind

From 0 to 12 months

100%

From 13 to 24 months

94%

From 25 to 36 months

88%

From 37 to 48 months

82%

From 49 to 60 months

76%

From 61 months

70%

* A month already started counts as a complete month.

Additional limit: the benefit in kind for the 2016 income year (2017 tax assessment year), will amount to at
least 1,250 euros per year, indexed for the 2016 income year.
If no data are available for the CO2 emissions of a vehicle, the following fixed values must be used:
- 205 g/km for petrol, LPG, or natural gas vehicles
- 195 g/km for diesel vehicles.

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6.3 Numerical example

Vehicle list price, excluding VAT
Price of options, excluding VAT
Discount
CO2 emissions
Date first registered
Diesel vehicle
List price

22,000 euros
2,000 euros
5,000 euros
115 g/km
15 March 2015
27,990 euros
Amount

List price

List price excluding VAT

22,000

List price excluding VAT

22,000

Options excluding VAT

2,000

Options excluding VAT

2,000

Discount

-5,000

Actual VAT payed

3,990

Total price excluding VAT

19,000

Total price

27,990

Actual VAT payed (21%)

3,990

CO2 emissions percentage = 5.5% + (115 89) x 0.1% = 8.1%

Percentage car age
- January and February
- From March onwards

=
=

100%
94%

2 months at 100%
10 months at 94%

The benefit in kind for 2016 is equal to:

[(27,990 euros x 8.1% x 6/7 x 100%) x 2/12] + [(27,990 euros x 8.1% x 6/7 x 94%) x 10/12]
= 1,846.14 euros

6.4
6.3 How is the benefit in kind imposed on the employee?
The taxable benefit in kind is added to the employees taxable pay. An employee who receives this benefit
must pay taxes on it. It will be taken out in the payroll accounting by means of an increased deduction of
payroll withholding tax from the employees salary.

6.5
6.4 Questions
You can find the frequently asked questions (FAQ) of the tax authorities at
http://financien.belgium.be/nl/Publicaties/vervoer/voordelen_van_alle_aard_voor_bedrijfswagens.jsp

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Flat-rate kilometre allowance

Employees who make business trips with their own vehicle can be reimbursed for this in one of two ways. The
employer opts either to reimburse the actual costs, or to pay a flat-rate kilometre allowance. The majority of
employers prefer to use a flat-rate kilometre allowance because its simpler in terms of administration.
For the period from 1 July 2015 to 30 June 2016 inclusive, this flat-rate allowance amounts to 0.3412 euro per
kilometre. The employee does not have to pay any tax on this reimbursement.
The employer can recognise this cost as deductible car expenses. The tax authorities estimate the cost of fuel
consumption (in the part of the flat-rate kilometre allowance) at 30% and the other vehicle costs at 70%.
Fuel costs are 75% deductible;
The other vehicle costs can be deducted from corporation tax according to the CO2 emissions (see 5.2).
However, the flat-rate kilometre allowance rule only applies if the number of kilometres driven on behalf of
the employer is not abnormally high. If this number amounts to more than 24,000 kilometres a year, the
authorities can conduct an audit and the taxpayer will have to provide additional evidence.
If the reimbursements exceed the flat rate of 0.3412 euro/km, in principle this is deemed to be pay and
the employee will be subject to tax and social security contributions on it. Only if the evidence is produced
to demonstrate that the reimbursement corresponds to the actual costs, will this be accepted by the tax
administration and not be taxed.

Information sources

http://www.minfin.fgov.be/portail2/nl/themes/transport/vehicles-purchase.htm
http://belastingen.vlaanderen.be/verkeersbelastingen
http://belastingen.vlaanderen.be/sites/default/files/atoms/files/Verkeersbelasting_brochure_nieuw.pdf
http://ccff02.minfin.fgov.be/webForm/public/atn-vaa.jsf
http://financien.belgium.be/nl/Publicaties/vervoer/voordelen_van_alle_aard_voor_bedrijfswagens

In collaboration with

Disclaimer
This document has been drafted in general terms and cannot therefore be used as a guideline for specific situations. As the answers provided in this document in response
to questions are based on a general understanding of the facts and circumstances of possible cases, they cannot serve as a substitute for a specific recommendation adapted
to the facts of each individual case. The application of the principles set out in this document depends on the specific circumstances of each factual situation. We therefore
recommend seeking professional advice before deciding for or against any specific course of action based on the contents of this document. Deloitte will be pleased to further
advise readers on how the principles cited in this document must be adapted to their specific situation. In the absence of such specific advice, Deloitte accepts no responsibility
or liability towards the recipient or any other party having access to this document.
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KBC Autolease NV
Prof. R. Van Overstraetenplein 5
3000 Leuven
Tel. 016 88 16 00
Fax 016 88 16 50
E-mail autolease@kbcautolease.be
www.kbcautolease.be

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