Company car taxation in Belgium
Table of contents
Introduction
The regulations concerning company cars are constantly changing, making it increasingly difficult to keep an overview. On this page, we provide a clear and concise overview of the taxation of company cars in Belgium and how it has evolved over the years.
For employers, the tax aspects of company cars are mainly important in two major areas: tax deductibility and the CO₂ solidarity contribution. For employees, the Benefit in Kind (BIK) is the tax that is charged monthly via the payslip.
Tax deductibility
Tax deductibility determines to what extent the costs of a company car may be deducted from taxable profit. The higher the deductibility, the lower the taxable profit — and therefore the less corporate tax the company has to pay.
Non-deductible costs are referred to as disallowed expenses. These cannot be deducted from profit. The result? A higher tax burden.
The deductibility of car expenses mainly depends on:
the vehicle’s CO₂ emissions;
the type of fuel (e.g. electric, hybrid, petrol or diesel);
the date of purchase or leasing, as this determines which tax regime applies.
Electric vehicles generally benefit from maximum deductibility, while high-emission cars are significantly less tax-advantageous. The government uses this mechanism to encourage more environmentally friendly vehicle use.
CO₂ solidarity contribution
In addition to corporate tax, there is also the CO₂ solidarity contribution, a mandatory employer contribution for every company car that is made available to an employee for private use.
This contribution also depends on:
the vehicle’s CO₂ emissions;
the type of fuel.
The more polluting the car, the higher the contribution. For fully electric vehicles, a minimum contribution currently applies. In 2025, the contribution for electric cars amounts to €447.96 per year. This contribution is calculated monthly but paid quarterly to the NSSO, together with other social security contributions.
Benefit in Kind (BIK)
In Belgium, a benefit in kind must be paid when an employee is allowed to use a company car for private purposes. This benefit is considered additional taxable income because the employee receives an advantage outside of their salary. The BIK ensures that the private use of a company car is treated and taxed correctly.
Company cars ordered before 1 July 2023
Zero-emission vehicles
Electric (and hydrogen) company cars purchased or leased before 1 July 2023 remain 100% tax-deductible throughout their entire period of use. This advantage is retained regardless of how the legislation evolves after that date.
With regard to the CO₂ solidarity contribution, the minimum amount applies, which is adjusted annually.
Non-zero-emission vehicles
For combustion engine or hybrid vehicles ordered before 1 July 2023, deductibility also remains unchanged throughout their period of use. It is determined using the existing formula:
Deduction percentage = 120% – (0.5 × fuel coefficient × CO₂ emissions)
Fuel coefficient:
Diesel: 1.00
Petrol, LPG, hybrid, CNG (≥ 12 hp): 0.95
CNG (< 12 hp): 0.90
A fuel-efficient plug-in hybrid generally achieves deductibility between 95% and 100%, while an older high-emission diesel can fall to the minimum deductibility of 50%.
The CO₂ solidarity contribution is calculated as follows:
Contribution = [(CO₂ emissions × €9) – 768 (petrol) or 600 (diesel) or 990 (LPG)] ÷ 12
The result is then adjusted based on the health index:
Adjusted contribution = contribution × (health index of the year of purchase ÷ 114.08)
The final monthly contribution is therefore indexed according to the year in which the car was purchased or leased. 114.08 is the index from September 2004, which always serves as the reference.
Company cars ordered from 1 July 2023
Zero-emission vehicles
Electric (and hydrogen) company cars ordered or leased from 1 July 2023 remain 100% tax-deductible until 31 December 2026. This means that all car-related costs are fully deductible from taxable profit, resulting in lower corporate tax. From 2027 onwards, this tax deductibility will be gradually phased out, reaching at least 67.50% in 2031.
As for the CO₂ solidarity contribution: for electric vehicles, the minimum amount remains applicable.
Non-zero-emission vehicles
For company cars with emissions ordered after 1 July 2023, the tax framework changes significantly. Although the calculation method for deductibility (via the CO₂ formula) remains, it is now subject to a phase-out schedule for both maximum and minimum deductibility:
Since 2025, the minimum deductibility is 0%, meaning that high-emission cars may become entirely non-deductible.
By 2028, the maximum deductibility will also be reduced to 0%, regardless of CO₂ value or fuel type.
A fuel-efficient plug-in hybrid may still enjoy deductibility of 95% to 100% in the early years, while a polluting diesel will quickly fall below 50%, and even close to 0%.
CO₂ solidarity contribution: calculated largely as before 1 July 2023, but now subject to an (extra) multiplier. The formula mentioned earlier is therefore multiplied by an additional factor. In 2025, the result of the original formula is multiplied by 2.75, and in 2026 by 4. This means the NSSO contribution rises significantly over the years.
Company cars with emissions ordered from 2026 onwards will be immediately deductible at 0%, and will not follow the phase-out scedule. Ordering these vehicles in 2026 therefore does not seem to be a good idea.
Benefit in Kind (BIK)
The BIK for company cars is calculated based on three main criteria: the catalogue value of the car (including options and VAT, excluding discounts), the vehicle’s CO₂ emissions, and the car’s age. The formula takes into account a CO₂ coefficient, which increases the benefit as emissions rise, but with a cap to avoid excessive amounts. In addition, a depreciation percentage is applied depending on the number of years since the car’s first registration, meaning the BIK decreases as the car ages.
For electric cars, a fictitious CO₂ emission of 0 g/km applies, which significantly lowers the BIK compared to combustion engines. The calculated benefit in kind may never be lower than the base amount of €820 per year, which is indexed annually. For 2025, this minimum amount is €1,650 per year, which is also the BIK for an employee with an electric company car.
Formulas for non-zero-emission cars:
- For diesel cars: catalogue value × [(5.5 + ((CO₂ emissions – 59) × 0.1))%] × 6/7 × age coefficient
- For petrol, fake hybrid, LPG and CNG cars: catalogue value × [(5.5 + ((CO₂ emissions – 71) × 0.1))%] × 6/7 × age coefficient
- For plug-in hybrid cars: catalogue value × 4% × 6/7 × age coefficient
Age coefficient:
- 0 to 12 months: 100%
- 13 to 24 months: 94%
- 25 to 36 months: 88%
- 37 to 48 months: 82%
- 49 to 60 months: 76%
- 61 months and more: 70%
Charging stations and charging costs
At the employee’s home
Charging stations installed at the employee’s home and financed by the employer are 100% deductible. For houses older than 10 years with a fixed charging station, a reduced VAT rate of 6% applies. For the employee, no additional BIK is due for the installation of the home charging station. The employee therefore does not need to declare this benefit in their tax return.
Employers may reimburse electricity costs for home charging of an electric or plug-in hybrid company car without creating an additional benefit in kind for the employee, provided certain conditions are met:
- The charging station must be located on the employee’s private property.
- The charging station must be equipped with a communication system that reports the electricity consumed to the employer.
- The reimbursement must be explicitly included in the employer’s car policy.
- The reimbursement may only relate to the electricity consumed for charging the company car provided.
Calculating the actual electricity costs for home charging is often complex. Many households only have a single electricity meter that records total consumption, without distinguishing between private use and car charging. In addition, consumption may vary depending on charging time, energy contract and charging station type. These factors make it time-consuming and administratively burdensome to calculate the actual costs. That is why the FPS Finance allows these electricity costs to be reimbursed based on the CREG tariff. The employer may choose to reimburse the employee based on the CREG tariff of the relevant region, or to reimburse all employees based on the lowest CREG tariff of the three regions.
Current CREG tariffs:
- Flanders: €0.3456/kWh
- Brussels: €0.3787/kWh
- Wallonia: €0.3843/kWh
At the office
Charging stations installed at the office are 100% deductible until 2029. From 2030 onwards, deductibility will decrease to 75%. The following conditions must always be met:
- It must be a new charging station;
- It must be accessible to the public*;
- It must be smart: charging time and power must be controllable via an energy management system.
* The charging infrastructure must be freely accessible, at least during or outside the company’s normal opening hours.
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FAQs
Every question has an answer. Can't find the answer to your question? Let us know!
When your employees hit the road to a customer or to an event, they often have mobility-related expenses like parking, public transport, electric steps,.... These professional expenses can be reimbursed via a business budget.
The flex budget can be used in multiple ways. The budget can be a reward for the employees that didn't drive many kilometers last year. It can be a budget that the employee can use for his/her commuting expenses. The flex budget can even be used to handle the mobility part of your flex income plan (cafetariaplan).
Depending on the expenditure taxes and social contributions are paid. Commute expenses for parking, bike and public transport are tax and social contribution free. Commute expenses for other mobility services are not tax free, this can influence personal tax income (employee) & company tax (employer). But are social contribution free. Mobility Expenses for private reasons are handled like it is gross wage.
The Flex mobility budget is a budget that all employees can use to reimburse their sustainable mobility expenses. They can spend the budget on public transport, parking, electric steps, shared bikes... instead of limiting their options to only train for instance. It's the ideal alternative for companies that don't meet the strict conditions of the federal mobility budget or who want to reward their employees with a sustainable perk. But no housing costs are possible, and taxes and social contributions are paid depending the expense type.
The federal mobility budget can not exceed 20% of the total gross wage of the employee (gross wage + all other benefits, but no holiday payment). Besides this the federal mobility budget can not be higher than 16.293 euro and not lower than 3.055 euro (figures of 2024).
Mbrella is the first corporate mobility solution that is designed to empower employees and unburden HR professionals completely. We offer software that helps you manage mobility budgets, commuting allowances, public transport subscriptions and much more.
If you live within 10 km of your normal place of work, you can finance rent or mortgage interests and capital payments with the federal mobility budget. Is your normal place of work explicitly mentioned on your employment contract BUT do you usually (more than 50%) work somewhere else (like from home)? Then your 'normal place of work' can be your actual place of work. Be careful that your employer needs to prove this to the Administration.
Depending on the reimbursement history of the company to the employee the bike allowance, the public transport reimbursement, the employer organized carpool reimbursement and the provision of a company bike can be on top or within the federal mobility budget if the allowance was there at least 3 months before the request for the federal mobility budget.
No, employers are not required to offer all mobility options within the federal mobility budget. They have the flexibility to choose which options to provide, based on their company policy and the needs of their employees. Employers must ensure clear communication about the available options to their employees. Expense categories can be managed in Mbrella.
Belgian employers are not required to offer the federal mobility budget to every employee with a company car. It is a voluntary option that employers can provide, and both the employer and the employee must agree to participate in the mobility budget system. This allows for flexibility and negotiation between the employer and employee regarding whether to switch from a company car to the federal mobility budget.
Yes, the federal mobility budget benefits smaller companies by being cost-neutral and enhancing employee satisfaction through flexible, eco-friendly transport options, while offering tax advantages and supporting sustainability goals.
To calculate the allowed mobility budget, you need to determine the Total Cost of Ownership (TCO) of the company car. This including all related expenses such as purchase or lease price, fuel, insurance, maintenance, taxes, and depreciation. You can use the actual costs formula or the lump-sum formula. The chosen calculation method should be used consistent within your company. Mbrella can help you calculating the TCO.
Employees eligible for the Federal mobility budget must either have a company car or be eligible for one under their employer's (car) policy. The previous waiting period requirement has been removed, allowing immediate eligibility. However, the mobility budget can only available if the employer meets some requirements (See "Is my company eligible to offer the mobility budget?")
Companies eligible for the mobility budget must meet specific criteria. Primarily, they need to have made one or more company cars available to their employees for an uninterrupted period of at least 36 months immediately before implementing the mobility budget. This eligibility ensures that the mobility budget can serve as an alternative to the company car system, promoting more sustainable transportation options.
The Federal mobility budget is a flexible system allowing employees to exchange their (right to a) company car for a budget. This budget can be spent on eco-friendly cars, sustainable transport options, and housing costs. Unused budget can be received as cash at the end of the year at a favorable tax rate. This offering tax benefits and promoting sustainable mobility.