Tag Archives: Benefit in kind

Benefit in kind – Private use of a company car: updated formula for 2017

The new reference CO2 emission for calculating the taxable benefit in kind for the private use of a company car in the hands of company directors and employees has been published on 5 December 2016 (Royal Decree of 24 November 2016). For income year 2017, the following CO2 emission will be applied to the above […]

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The new reference CO2 emission for calculating the taxable benefit in kind for the private use of a company car in the hands of company directors and employees has been published on 5 December 2016 (Royal Decree of 24 November 2016).

For income year 2017, the following CO2 emission will be applied to the above taxable benefit in kind:

  • Petrol, LPG or natural gas cars: 105 g CO2/km (instead of 107 g CO2/km for income year 2016).
  • Diesel cars: 87 g CO2/km (instead of 89 g CO2/km for income year 2016).

Please note that the minimum taxable benefit in kind for a company car (i.e. EUR 1.260 for income year 2016) has not yet been published for income year 2017. There are no further changes to the lump-sum valuation method for the benefit in kind.

The above reference CO2 emission is effective as of 1 January 2017 and the corresponding benefit in kind should already be processed in the January payrolls.

Due to this change the taxable benefit in kind will increase, which will result in a slightly higher tax charge in income year 2017 compared to income year 2016. This will especially be the case if the same company car would be registered for the first time in 2017 instead of 2016. For company cars that were already registered prior to 2017, the yearly age reduction (6% of the catalogue value of the company car) will be applied in the course of 2017 which will then decrease the taxable benefit.

 

Benefit in kind – Private use of a company car: Updated formula for 2016

The new reference CO2 emission for calculating the taxable benefit in kind for the private use of a company car in the hands of company directors and employees has been published in the Royal Decree of 9 December 2015. For income year 2016, the following CO2 emission will be applied to the above taxable benefit in […]

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The new reference CO2 emission for calculating the taxable benefit in kind for the private use of a company car in the hands of company directors and employees has been published in the Royal Decree of 9 December 2015.

For income year 2016, the following CO2 emission will be applied to the above taxable benefit in kind:

  • Petrol, LPG or natural gas cars: 107 g CO2/km (instead of 110 g CO2/km for income year 2015).
  • Diesel cars: 89 g CO2/km (instead of 91 g CO2/km for income year 2015).

Please note that the minimum taxable benefit in kind for a company car (i.e. EUR 1.250 for income year 2015) has not yet been published for income year 2016.

There are no further changes to the lump-sum valuation method for the benefit in kind.

The above reference CO2 emission is effective as of 1 January 2016 and the corresponding benefit in kind should already be processed in the January payrolls.

Due to this change the taxable benefit in kind will increase, which will result in a slightly higher tax charge in income year 2016 compared to income year 2015. This will especially be the case if the same company car would be registered for the first time in 2016 instead of 2015. For company cars that were already registered prior to 2016, the yearly age reduction (6% of the catalogue value of the company car) will be applied in the course of 2016 which will then decrease the taxable benefit.

Tech tools provided by employers – new tax and social security treatment

The social security authorities are currently working on a new measure with respect to the valuation of the benefit in kind for private use of a PC, tablet, mobile phone and internet provided by employers to their employees. If employees receive a PC, tablet, mobile phone and/or an internet connection from their employer, social security […]

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The social security authorities are currently working on a new measure with respect to the valuation of the benefit in kind for private use of a PC, tablet, mobile phone and internet provided by employers to their employees.

If employees receive a PC, tablet, mobile phone and/or an internet connection from their employer, social security contributions and individual income taxes will be due on these benefits in kind in case they are (partly) used by the employees for private purposes. In the past, there were no clear guidelines on how to value these benefits, and the social security and tax authorities’ positions were not aligned.

Based on the new measure, the social security authorities will value the benefit in kind on which social security contributions will be payable as follows:

  • PC: EUR 6.00 per month;
  • Tablet: EUR 3.00 per month;
  • Internet: EUR 5.00 per month for fixed and mobile internet;
  • Internet: EUR 2.00 per month for mobile internet only;
  • Mobile phone: EUR 12.50 per month (this includes the device, mobile telephony and mobile internet).

The maximum benefit in kind for internet will be EUR 5.00 per month per employee, regardless of the number of internet connections.

The tax authorities will most likely act in accordance with the social security authorities and will take into account the same value for the benefits in kind. This is yet subject to confirmation.

Additionally, the social security authorities will most likely adopt the position of the tax authorities regarding costs proper to the employer paid to employees in respect of teleworking. The tax authorities accept, under certain conditions, the tax-free reimbursement of a cost proper to the employer for an amount of EUR 20.00 per month for the business use of a private PC and for an amount of EUR 20.00 for the business use of a private internet connection.

The exact date of coming into force of the new measure is still unknown.

Circular letter on the deductibility of car costs

In a circular letter dated 15 July 2014 (see link below), the Belgian Minister of Finance, Koen Geens, has elaborated on the tax deductibility of the costs relating to cars being put at the disposal of third parties in the hands of whom the corresponding benefit in kind is considered to be taxable. For Belgian […]

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In a circular letter dated 15 July 2014 (see link below), the Belgian Minister of Finance, Koen Geens, has elaborated on the tax deductibility of the costs relating to cars being put at the disposal of third parties in the hands of whom the corresponding benefit in kind is considered to be taxable.

For Belgian personal tax purposes, the costs relating to the use of cars are only 75% deductible.

For Belgian corporate tax purposes, the deductibility of the costs depends on the CO2 -emission of the car concerned.

To avoid double taxation, the amount of the benefit in kind that is taxable in the hands of the third party will not be considered as a cost relating to the use of a car. Hence, the abovementioned deductibility limitations will not come into play as regards the part of the car costs which is the equivalent of the taxable benefit in kind.

As a consequence, the Minister of Finance suggests applying the abovementioned principle as follows:

  • For Belgian personal tax purposes: the benefit in kind has to be deducted from the total amount of the car costs. The result thereof will be subject to the abovementioned 75% limit.
  • For Belgian corporate tax purposes: the benefit should be split up in a part relating to the fuel costs and a part relating to all other car costs. The fuel costs are, except for the part thereof corresponding with the benefit in kind, tax-deductible at 75%. The deductibility of the other car costs, deducted with the part of the benefit in kind, depends on the CO2 emission.

Note that the recommended calculation method was already commonly used in practice.

The circular letter is applicable to costs incurred as from 1 January 2012.

Link to circular letter.

Company-provided accommodation – New practice note

Where immovable property is (fully or partly) put at the disposal of an employee or company director by an employer/company free of charge, the individual is deemed to be in receipt of a taxable benefit in kind. This benefit is generally determined on a lump sum basis, taking into account the deemed rental income. Clarification […]

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Where immovable property is (fully or partly) put at the disposal of an employee or company director by an employer/company free of charge, the individual is deemed to be in receipt of a taxable benefit in kind. This benefit is generally determined on a lump sum basis, taking into account the deemed rental income.

Clarification in the practice note of 02 April 2014

If the occupation of a property is ‘imposed’ on the employee/company director and the property exceeds the personal needs of the individual, the deemed rental income will only be taken into account to the extent that the property meets the actual needs of the beneficiary. The ambiguity that had arisen around this wording was finally cleared up following a parliamentary question. The practice note of 02 April 2014 now explicitly clarifies the meaning of the wording ‘when the occupation of a property is imposed’ and ‘when it exceeds the personal needs’.

 

Update of the company car benefit in kind formula for 2014

Update of the company car benefit in kind formula for 2014 Today a Royal Decree has been published that changes the formula used for determining the benefit in kind for company cars. It is dated 24 January 2014 and applies both to employees and company directors. For income year 2014, the reference CO2 emission for […]

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Update of the company car benefit in kind formula for 2014

Today a Royal Decree has been published that changes the formula used for determining the benefit in kind for company cars. It is dated 24 January 2014 and applies both to employees and company directors.

For income year 2014, the reference CO2 emission for the taxable benefit in kind for the private use of a company car is the following:

  • Petrol, LPG or natural gas cars: 112 g CO2/km (instead of 116 g C02/km for income year 2013)
  • Diesel cars: 93 g CO2/km (instead of 95 g C02/km for income year 2013 )

Due to this modification, the annual company car benefit in kind slightly increases for income year 2014 in comparison with the same taxable benefit for income year 2013.

Please note that the minimum taxable benefit in kind for the company car for income year 2014 is set at EUR 1.250,00.

The above modification is effective as of 1 January 2014. This may thus mean that given the publication date, changes need to be made to the payrolls already processed for January.

Please visit the 2014 updated PwC’s company car benefit in kind calculator to compute the benefit in kind for the private use of a company car in 2014.

Benefit in kind – Private use of company cars: Modified 2013 reference emission for petrol cars

A Royal Decree dated 3 April 2013 has changed the reference CO2 emission for petrol cars that is to be applied to determine the taxable benefit in kind for the private use of a company car by company directors and employees. For income year 2013, this reference CO2 emission for petrol driven cars is now […]

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A Royal Decree dated 3 April 2013 has changed the reference CO2 emission for petrol cars that is to be applied to determine the taxable benefit in kind for the private use of a company car by company directors and employees.

For income year 2013, this reference CO2 emission for petrol driven cars is now set at 116 g CO2/km (instead of the 115 g CO2/km basis for income year 2012).

This modification will cause the annual benefit in kind of having a petrol company car to slightly decrease for income year 2013 in comparison with the same taxable benefit for income year 2012.

Note that the reference CO2 emission for diesel cars has not been modified and remains at 95 g CO2/km.

The above modification is effective as of 1 January 2013. However, for practical considerations, the wage withholding tax will only be adapted as from 1 April 2013.

New FAQ on company cars published on the tax authorities’ web site

Context   When a company car is put at the disposal of an employee, its private use triggers taxation as a benefit in kind (BIK). Private use includes all uses other than the business use. In other words, private use refers to use during evenings, weekends and holidays as well as commuting between home and […]

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Context

 

When a company car is put at the disposal of an employee, its private use triggers taxation as a benefit in kind (BIK). Private use includes all uses other than the business use. In other words, private use refers to use during evenings, weekends and holidays as well as commuting between home and the fixed place of work.

The laws of 28.12.2011 and 29.3.2012 have introduced major changes in the valuation rules of the company car BIK that entered into force on 1 January 2012 (see previous Headlines of 26 January and 16 April 2012 in this respect). The new valuation is no longer based on private kilometres but on the catalogue value and on the CO2 emissions of the car.

News

 

The tax authorities have just published their 4th FAQ on the subject since January 2012!

The new FAQ completes the previous one from April by adding numerous examples and covering new topics such as:

  • the possibility to reduce the company car BIK in the case of a salary split, if the car is also used abroad;
  • the valuation of option packs at the pack value instead of the sum of each option separately, under the condition that the pack is also available for individuals (not for “fleet” packs);
  • the valuation of the catalogue value of the car in the case of a general promotion (applicable to all buyers) that is reflected in the price list (e.g. during motor show periods);
  • more explanations on the determination of the catalogue value in specific cases;

With its 59 questions, this 4th FAQ illustrates again the complexity of the new valuation rule of the company car BIK. It certainly does not answer all open questions, and a future version is probably to be expected!

Link to the FAQ:   French version |  Dutch version

Proposed change – Tax treatment of stock options

Stock options aretaxable on the 60th day following the offer if an employee or company director has accepted the offer in writing within 60days following the offer. The taxable option value is generally calculated as a percentage of the market value of the underlying shares on the day prior to the actual offer date or […]

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Stock options aretaxable on the 60th day following the offer if an employee or company director has accepted the offer in writing within 60days following the offer. The taxable option value is generally calculated as a percentage of the market value of the underlying shares on the day prior to the actual offer date or the average closing rate of the stock over the last 30 days prior to the offer date.

A recently introduced proposal to change the law on stock options suggests applying the lump-sum valuation of the taxable benefit on the average closing rate of the underlying shares over the last 150 or 30 days prior to the offer date, excluding the possibility of choosing the closing rate on the day prior to the actual offer. Moreover, the proposal would like to introduce (i) a mandatory forced exercise scheme where 1/3 of the options can be exercised per 30-month period and (ii) a maximum exercise period of 120 months.

In addition the proposal suggests changing the applicable percentage for calculating the taxable benefit in kind and using 18% for all options even if the exercise period exceeds 5 years (which will be mandatory for at least 2/3 of the option grant (see above).  Also the reduced valuation of 9% would become applicable even if the option (1/3 of the grant) is exercised after 30 months (2.5 years).

Whether amendments will be introduced has not yet been decided.  We will keep you informed of the status of the proposal which is currently still pending in the first Chamber of Representatives.

Personal income tax, Act on various measures

On 6 April 2012, the program law of 29 March containing amendments and clarifications of the measures introduced by the Act of 28 December 2011, was published. The personal income tax provisions recorded in this recent act concern, amongst other things, company cars. The act confirms the proposed changes in the valuation of used cars, […]

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On 6 April 2012, the program law of 29 March containing amendments and clarifications of the measures introduced by the Act of 28 December 2011, was published.

The personal income tax provisions recorded in this recent act concern, amongst other things, company cars. The act confirms the proposed changes in the valuation of used cars, i.e. the catalogue value of the company car can be depreciated by 6% on each anniversary of the date of the first registration of the car (with a minimum value equal to 70% of the original catalogue value). For withholding tax purposes, this calculation method will only apply as from 1 May 2012.

Proactive announcement of specific tax audits

The Belgian tax authorities have decided to increase the number of tax audits on a yearly basis. In a recent communication they have announced that they will mainly focus on the following items: internet sales employees claiming actual professional expenses company directors claiming actual professional expenses non-profit organisations that may be subject to corporate income […]

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The Belgian tax authorities have decided to increase the number of tax audits on a yearly basis.

In a recent communication they have announced that they will mainly focus on the following items:

  • internet sales
  • employees claiming actual professional expenses
  • company directors claiming actual professional expenses
  • non-profit organisations that may be subject to corporate income tax
  • sports clubs
  • split-up of rights of ownership (usufruct of property)
  • notional interest deduction (companies)

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 […]

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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 http://newshub.pwc.emakina.net/new-2012-company-car-benefit-in-kind/