The mobility budget: new features
April 2022 – The "Law of 25 November 2021 organising the fiscal and social greening of mobility" has also introduced several changes to the mobility budget. It seems that this regulation has not been as successful as expected. The legislator intends to remedy this by further simplifying, making it a more flexible, sustainable means of transport and providing greater legal certainty.
The mobility budget
Let's recap: as an employer, you have the option of introducing a mobility budget or not. The choice is yours. A mobility budget allows your employees to exchange their company car or their right to a company car for a certain budget. The employee can freely allocate this budget to 3 pillars. The employer decides on the exact content of these pillars.
In pillar 1, the employee can opt for an environmentally friendly company car. This means that he takes an electric car or a car that meets certain standards.
There is no special tax regime for this pillar: if the employee opts for an environmentally friendly company car, he or she will be taxed on a benefit in kind.
The employee can allocate any remaining budget to pillars 2 and 3. The employer and the employee can also "skip" this pillar and go directly to pillar 2.
Pillar 2 includes durable means of transport and accommodation costs. Sustainable means of transport include bicycles, electric motorbikes, public transport, organised public transport, etc. The accommodation costs of employees who come to live within a certain radius of their place of employment can also be financed under pillar 2. Housing costs include not only the rent but also the interest on the mortgage.
The part of the budget that is used for sustainable means of transport or housing costs in pillar 2 is tax-free for the employee.
Finally, there is pillar 3: if the mobility budget has not been fully allocated to pillars 1 and 2, the worker can receive the balance in cash.
This sum is tax-free but is first reduced by a special personal contribution of 38.07%.
New features in pillar 1
Under pillar 1, the employee is entitled to an environmentally friendly company car. This is a vehicle whose emission standard must at least correspond to the standard in force for new vehicles.
There was an exception to this rule for end-of-series vehicles (vehicles that are no longer produced, but are still in stock with the manufacturer or distributor). This exception is now removed: from 1 January 2022, all Pillar 1 vehicles must meet the emission standard in force for new vehicles at the time of application. From 1 January 2026, employees will only be able to opt for a car with zero CO2 emissions under Pillar 1.
For cars purchased or leased under pillar 1 before 1 January 2026, nothing will change. The tax authorities will base their decision on the date on which the order form was signed or the leasing contract was concluded.
New in pillar 2: allocation
The first change is that you cannot "skip" this pillar. Each mobility budget will now have to contain a proposal in pillar 2.
Another new feature is that motorised vehicles that fall under soft mobility - and therefore under Pillar 2, not Pillar 1 - may no longer emit CO2 from 1 January 2026.
The date on which the order form or the rental or leasing contract for the motor vehicle is signed is also crucial. Shared cars will also no longer be allowed to emit CO2.
In addition, the possibilities for allocating funds under pillar 2 have been extended. From 1 January 2022, the following will also be included in Pillar 2
Expenditure on financing soft mobility costs (e.g. bicycle loans);
vehicle parking costs (e.g. costs for covered or uncovered parking of a bicycle, moped or electric motorbike in a public or private garage);
parking fees for the use of public transport;
pedestrian allowances" for travel on foot, scooter, wheelchair, etc. from home to the place of occupation;
equipment for the protection of the driver and passengers, as well as equipment improving their visibility (e.g. bicycle helmets and fluorescent waistcoats; rain gear is not normally considered unless it also improves the protection or visibility of the driver or passengers);
motorised tricycles and quadricycles, as defined in the general regulation on the police of road traffic and the use of the public highway, but only when these tricycles or quadricycles are electrically propelled and designed for the transport of persons and, in the case of quadricycles, equipped with a closed passenger compartment.
Public transport season tickets for all journeys made by the employee and members of his or her family living in the same household can now be financed from the mobility budget. Until now, this possibility was limited to public transport passes for the employee's own home-to-work journeys.
From 1 January 2022, the radius between the home and the workplace will be increased from 5 to 10 kilometres in order to be able to use the mobility budget for housing costs.
It should also be noted that from 1 January 2022 not only interest but also capital repayments on mortgages can be financed via the mobility budget.
Other changes
Until now, employees had to go through a waiting period before they could apply to their employer to exchange their company car for a mobility budget. At the time of the request, the employee had to have had a company car (or be eligible for one) for at least 3 months without interruption with his current employer. In the 36 months preceding the application, they also had to have had or be eligible to have a company car for at least 12 months with the current employer.
This rule has been abolished.
From 1 January 2022, the entire mobility budget must be made available to the employee in virtual form on a mobility account. Until now, only the mobility budget after deduction, if applicable, of the part used to finance an environmentally friendly company car under pillar 1 had to be made available to the employee in virtual form on a mobility account.
The amount of the mobility budget should be granted according to the number of calendar days the employee has participated in the mobility budget system during the calendar year. Thus, when switching from a company car to a mobility budget, the tax schemes are not cumulated. The calculation of the benefit in kind for the personal use of a car made available free of charge by the employer is in fact also carried out per calendar day on which the employee actually had the car at his disposal.
From now on, when determining the amount of the employee's mobility budget, the employer has the possibility to leave out the costs resulting from the use of the company car for professional purposes. However, the condition is that he reimburses the employee's travel expenses for business purposes beyond the mobility budget. This should encourage employers not to exchange for a mobility budget only company cars (i.e. cars that are not primarily used for business purposes), but also company cars (i.e. cars that are necessary to carry out the agreed work).
Minimum and maximum
Finally, the new law also introduces a minimum and a maximum amount for the mobility budget. This will also apply from 1 January 2022. The minimum amount is 3 000 euros per calendar year; the maximum amount is 1/5 of the total gross remuneration with an absolute maximum of 16 000 euros per calendar year.
For mobility budgets that have already been granted before 3 December 2021, this minimum and maximum amount only apply from 1 January 2023.
