Are you along for the ride with the new car taxation that will kick off in 2023?
February 2023 – So by 2026, the tax regime for company cars will change radically, albeit in several steps. What about the tax deductibility of your current company car or fleet? And what ground rules should you consider when buying or leasing a new car from 2023 onwards?
Today, the company car is still trendy in the pay package of Belgian employees. The annual mobility barometer of the hr services company Acerta shows that more than one in five white-collar workers in our country has a company car. This is an increase of no less than 26.1% compared to five years ago. At the same time, the Belgian company car fleet is going green, partly driven by European and national (tax) legislation.
Green light for sustainable mobility
At the end of 2021, the federal government published the law on the fiscal and social greening of mobility. The aim: to further green the company car fleet and encourage companies to maximise multimobility for their employees.
What you need to know first
The cost of a company car is deductible for your company according to a so-called gram formula. This takes into account both the CO2 emissions of a car and the fuel type. The deductible rate is calculated as follows: 120% - (0.5 x fuel coefficient x CO2/km).
The fuel coefficient differs depending on the type of car and is:
1 for diesel cars
0.95 for petrol cars
0.90 for natural gas cars < 12 fiscal HP.
Tax deduction for fossil fuel passenger cars
Vehicles purchased before 01-07-2023
The cost of the vehicle you or your company purchases before 1 July 2023 will remain tax deductible 'for life'.
Vehicles purchased between 01-07-2023 and 31-12-2025
Fossil-fuel passenger vehicles (diesel, LPG, CNG or petrol) purchased between 1 July 2023 and 31 December 2025 are subject to a transitional arrangement. The deductibility of costs under the gram formula will be gradually capped from 2025 to 75% in 2025, 50% in 2026, 25% in 2027 and 0% from 2028.
For tax-advantaged 'true' hybrids purchased from 1 July 2023, fuel costs will only be 50% deductible until 31 December 2026. For 2027, the deduction will be limited to 25%, and from 2028 the deduction of those fuel costs will also be 0%.
Vehicles purchased from 01-01-2026 onwards
From 2026, all commercial vehicles must be fully electric or hydrogen-powered. For cars that are not fully emission-free (i.e. with CO2 = 0) and that you purchase from 1 January 2026, you must take into account a total deduction ban.
Tax deduction for zero-emission passenger cars
Vehicles purchased before 01-01-2027
Since assessment year 2021, the gram formula (see above) determines the tax deductibility of your company car or fleet. Because electric cars and hydrogen-powered cars emit 0 grams of CO2, you can deduct the costs in full for tax purposes. This 100% applies 'for life' to emission-free cars purchased, leased or rented before 1 January 2027.
Vehicles purchased from 01-01-2027
The tax deductibility of costs for emission-free cars purchased after 31 December 2026 will be phased out between 2027 and 2031. During this transition phase, the deduction for cars depends on the year of purchase, with the following percentages:
purchase in 2027: deductible for life at 95%
2028: 90%
2029: 82,5%
2030: 75%
2031: 67,5%
General ban on deduction of professional expenses of fossil fuel passenger cars
From 1 January 2026, a general deduction ban applies to all professional expenses for CO2 emitting company cars. As a result, from 1 January 2026, you as a taxpayer can also no longer use the flat-rate deduction of EUR 0.15 per km for commuting.
That flat rate can only be applied for an:
electric car
or another car (in transition) purchased before 1 July 2023 (no impact due to transitional measure) or before 1 January 2026 (extinction scheme: temporary limited deduction of 50% in 2026 and 25% in 2027).
Get information from your accountant
For more info on the deductibility of your fleet, you can of course contact your accountant.
