As from 1 January 2018, it is possible for employees to exchange their company cars for a mobility allowance – the so called ‘cash for cars’- which is subject to a beneficial social security & income tax treatment (see our newsflash of 25 May 2018). Now, after a short evaluation period, the Belgian Federal Government has concluded that some elements had to be revised in order to increase the attractiveness of this new system. Based on first studies it showed that the number of employees who opted for the mobility allowance (with employers who implemented the system) is significantly lower than expected.
As a result, the Council of Ministers decided to revise certain conditions linked to the mobility allowance. Based on the information available at this moment (no official texts are available at this point in time), it seems that there will be a simplification of the conditions in order to classify for the ‘cash for car’ system in the sense that the minimum period during which an employee needs to have a car (before he/she can give up the car for cash) will change. Also allowing people entering into a staff category in which they become eligible to order a car to opt for the cash for car system. Again no official texts are currently available and more information will follow.
What the impact will be of the above suggested changes on the popularity of the mobility allowance, is not yet clear. The Belgian Labour Unions are worried that the above will cause an increase of salaries, but without the additional contributions into the social security system.