As indicated in our newsflashes of 21 April 2021 and of 18 May 2021, it was agreed in the government declaration to adapt the tax and social legislation around mobility to stimulate the green agenda. On 14 September the draft law specifying the fiscal and social treatment of company cars was submitted to The Chamber. The main principles of the draft law are as follows and are in line with what was indicated by the Minister of Finance before the summer.
As from 2026 onwards, only zero emission company cars will be able to benefit from a tax deduction. Zero emission company cars, purchased before the first of January 2027 will remain 100% tax deductible. For zero-emission cars purchased after this date, this percentage will be gradually reduced to 67,5% by 2031. For polluting cars (i.e. any car with a CO2-emission higher than 0g/100km) purchased before the first of July 2023, the current tax regime will remain unchanged. For polluting cars purchased after the first of July 2023 a cool down period is foreseen whereby the deduction will be gradually reduced to zero by 2028.
As for the deduction of fuel costs, a maximum deduction of 50% for the costs related to fossil fuel will be introduced if the car is purchased or leased as from 2023. Electricity for powering the vehicle will continue to be tax deductible at 100%.
To reach the objective to achieve a maximum shift to electric cars, the government will give a tax incentive to deploy charging infrastructure in Belgium.The investment in a charging station at home will entitle you to a tax reduction of 45% in your personal income tax return. This tax reduction will be gradually reduced to 15% by 2024 and will only be granted when the required conditions are met.
Investments in public charging stations made by companies between the first of September 2021 and 31 December 2022 will be incentivized by allowing an increased tax deduction of 200%. Investments in public charging stations made by companies between the first of January 2023 and 31 August 2024 will be incentivized by allowing an increased tax deduction of 150%.
Whilst there have been some discussions to make the Mobility Budget more user friendly, there are no changes to be found in this respect in the draft law. We expect this will follow later via a separate draft law.