New changes in the taxation of company cars


As announced in our previous Headlines, the law containing various measures published in the Official Gazette on 30 December 2011 fundamentally changes the way of computing the taxable benefit in kind arising from the private use of a company car, effective 1 January 2012.

As explained, the yearly taxable benefit in kind will be computed as 6/7th of the car’s catalogue value (including VAT and options, but excluding any rebates or discounts) multiplied by a percentage linked to the car’s CO2 emission rate. In addition, the employer will be taxed on a new disallowed expense equal to 17% of this benefit in kind.

Last Tuesday night, the council of ministers approved a new programme law amending the above computation method of the benefit in kind for company cars. Under the new rules, effective later this year (the entry into force date is not yet known), the catalogue value would be depreciated by 6% on each anniversary of the date on which the car was first brought into use, with a minimum value equal to 70 % of the original catalogue value. For example, as of the third anniversary of the car, the taxable benefit in kind may be depreciated by 18%.

This new rule still has to be enacted to enter into force.

A tool to measure the personal impact of these new taxation rules on a company car is available at