In March 2018, the government reached an agreement on the principles of the mobility budget. Meanwhile, this agreement was formed into a preliminary draft of law, which was approved by the Council of Ministers on 26 July 2018.
The mobility budget will co-exist with the recently introduced mobility allowance. Both measures aim to reduce the number of cars driving on the Belgian roads (especially for commuting reasons) and are therefore complementary. However, whereas the mobility allowance (known as “cash for car”) allows employees to exchange their company vehicle for salary in cash, the mobility budget offers employees a number of alternatives for the company car.
The general conditions to implement a mobility budget are similar as for the implementation of a mobility allowance, with some differences, however. Employers should have a company car policy for at least 36 months, unless the employer is a start-up. Employees are only entitled to a mobility budget when they had a company car at their disposal (or they were entitled to a company car, regardless of whether the employee did accept this company car or not) for an uninterrupted period of at least 3 months prior to the request and at least 12 months during the 36 months prior to the request. As it is an optional scheme, employers are not obliged to offer this scheme, and employees have the choice to opt for the scheme or not.
In practice, employees will have the possibility to spend the budget via the following three pillars:
- First Pillar
Employees can opt to exchange their current company car for a more environmentally-friendly type of car (with a maximum CO2 of 95), within the existing car policy. The same social security and tax treatment will apply as for a ‘common’ company car.
- Second Pillar
Employees can use the remaining budget for other more sustainable means of transport such as public transport, (possibly electric) bicycles or electric scooters, along with a rent subsidy or financial assistance to obtain accommodation closer to the workplace. This part of the budget will be subject to neither social security contributions nor personal income taxes for the employee.
- Third Pillar
If the employees do not use the entire budget, the balance remaining at the end of a given year can be converted into a cash payment This amount would be tax-free but subject to a special social security contribution of 38.07% to be borne by the employee.
Furthermore, it will not be possible to combine the mobility budget with the exemption for commuting between the employee’s place of residence and place of work.
The Belgian government has confirmed that the mobility budget is scheduled to be initiated as of 1 October 2018.
