If we’re talking about company cars, there’s one element that keeps on coming back over the past few years: our fleet needs to become greener.
Now, the Belgian parliament has introduced a Proposal of Law (Doc 55 0904 – 2019/2020)which is (again) looking at the reference CO2-emission which is used to determine the taxable benefit in kind in hands of employees or company directors who are entitled to a company car.
To determine the taxable lump sum benefit in kind, the following formula is used: List price x (6/7) x factor depending on CO2-emission. That factor starts at 5,5% and increases or decreases by 0,1% per 1 gram CO2/100km the specific car deviates from the reference CO2. This results in a higher taxable benefit in kind when the reference CO2 decreases or in a lower benefit in kind when the reference CO2 increases.
The reference CO2 depends on the average CO2-emissions of cars registered in Belgium during 1 October until 30 September of the year prior to the income year (eg. for income year 2020, the average of the CO2-emissions between 1 october 2018 and 30 September 2019 has been taken). When this was implemented, it was foreseen that this average CO2-emissions would have a decreasing trend over the years, and thus result in an increasing taxable benefit in kind.
However, in 2019 and 2020 we saw an increase of the average CO2-emission for the following reasons :
People are buying more SUV’s (with in general higher CO2-emissions)
The new WLTP- / NEDC2.0-tests were implemented to determine the CO2-emission of a car, which in general was higher than the old NEDC-value
Increasing demand in petrol-cars, which have a higher CO2-emission than diesel-cars
Now, the Belgian parliament wants to put an end to this effect by adjusting the Income Tax Code and implementing a correction whereby the reference CO2-emission can no longer increase as from 2021.
For now it is still draft legislation which is not yet put to a final vote and under discussion in the finance commission. More to follow soon.