Company cars: the benefit will never decrease again
August 2021 – The calculation of the benefit in kind for the company car depends, among other things, on the CO2 emission of the vehicle in relation to the 'average emission of the Belgian car fleet'. This average emission has increased in 2018 and 2019, so that the benefit has decreased. Due to a new law, the benefit will no longer decrease.
Calculation of the benefit in kind
The formula for calculating the taxable benefit in kind of a company car is: catalogue value x CO2 percentage x 6/7 x age correction
The catalogue value is the price to be paid for the vehicle, including VAT and any options, but without any discounts.
The age correction means that the 'benefit' decreases with the age of the vehicle. The advantage decreases by 6% per year. The advantage is therefore 100% at the start, the following year it is only 94%, and then it drops to 88%. And so on, until the minimum of 70% is reached.
Finally, there is the CO2 percentage (or CO2 coefficient). The basic percentage is 5.5%.
This basic percentage of 5.5% must be increased or reduced depending on whether the CO2 emission of the vehicle is higher or lower than the average emission of the Belgian car fleet during the twelve months preceding the month of October of the year preceding the taxable period.
For 2021 income, the average emission from October 2019 to September 2020 must therefore be used as a basis. Don't worry: this standard is published annually in December.
For the 2021 revenue year, the average emission is as follows:
102 g/km for petrol, LPG or natural gas vehicles; and
84 g/km for diesel vehicles.
This is a decrease compared to previous years. In 2020, the averages were 111 g/km and 91 g/km respectively. In 2019, they were 107 g/km and 88 g/km respectively.
The basic percentage of 5.5% decreases or increases by 0.1% for every gram of CO2 that your vehicle emits less or more than the average emission. The percentage must be between 4% and 18%. If, for example, your diesel vehicle has a CO2 emission of 100, the CO2 percentage is equal to 5.5 + [0.1 x (100 - 84)]. So 5.5 + 1.6: the CO2 percentage is 7.1%.
Finally, the law also stipulates that the benefit cannot be less than 1,370 euros (for the income year 2021).
Reduced benefit in case of higher average CO2 emission
In 2019 and 2020, the average CO2 emission has increased, so that the benefit has decreased for vehicles with the same CO2 emission. This was obviously not what the government had in mind when it introduced the new calculation formula. The main reason for the increase in the average CO2 emission is undoubtedly the increase in the number of SUVs and comparable vehicles on our road network.
In 2021, the average has decreased, but it cannot be ruled out that this CO2 emission will decrease again in the following years.
A law has therefore recently been introduced that will prevent the average CO2 emission from increasing again. The law stipulates that from the income year 2021 :
the reference CO2 emission of the year in question may not be higher than that of the previous year;
if the average CO2 emission is lower than the previous year's value, the most recent emission will be used in the calculation formula;
If the new value is higher than the previous year's value, the reference values of the previous calendar year will continue to be used.
Although this cannot be completely ruled out, the likelihood of the average CO2 emission increasing again is relatively low. With the new measures announced, there will be more and more electric company cars. The CO2 emission will therefore fall sharply. This means that the taxable benefit for the car of employees and company directors will increase accordingly.
