Tag Archives: company car

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.

 

New upcoming tax measures

Recently, the Belgian Minister of Finance published a general policy regarding “public finances”, “boosting of the economy/entrepreneurial climate” and “combat against tax fraud”. Based on this policy, certain new tax measures will be introduced in the upcoming months. From a personal income tax perspective, the following changes are anticipated: further increase in the withholding tax […]

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Recently, the Belgian Minister of Finance published a general policy regarding “public finances”, “boosting of the economy/entrepreneurial climate” and “combat against tax fraud”. Based on this policy, certain new tax measures will be introduced in the upcoming months. From a personal income tax perspective, the following changes are anticipated:

  • further increase in the withholding tax rate on interest and dividend income, notably from 27% to 30% as of January, 1st 2017. Since January, 1st 2013, a uniform withholding tax rate of 25% was applicable, which was increased to 27% as of January, 1st 2016;
  • abolition of the speculation tax, which was introduced in the framework of the 2015 tax shift legislation. This tax is applicable as of January, 1st 2016 and amounts to 33% of the gains realised by individual taxpayers on the quick selling of listed stocks and certain stock exchange listed financial instruments (i.e. within a 6-month period following the purchase);
  • going forward, certain tax benefits (available to individual taxpayers) will only be granted to taxpayers who stayed in Belgium during a “minimum period”;
  • so-called “internal capital gains” (i.e. situations where individual taxpayers realise capital gains on shares by assigning their holding interests to a fully owned holding company) will become subject to specific tax audits. Moreover, new legislation will be implemented in this respect as of January, 1st 2017;
  • introduction of the so-called “mobility budget” in the course of 2017, which will allow employees to convert their current company car into a “budget” or to receive “additional net salary”. This system would be neutral from a cost and benefit perspective for the employers and the employees, but also from the budget perspective of the State. It would ‘as such’ not change the current tax regime for company cars.

Budget 2017: New tax measures announced – Corporate tax reform reconfirmed but not yet decided

In the framework of the budget for 2017, the Federal Government reached an agreement on several tax measures. On 16 October 2016, during the policy statement, the Prime Minister announced what follows: The speculation tax for individuals on the transfer of quoted shares would be abolished as of 1 January 2017; Tax on stock exchange […]

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In the framework of the budget for 2017, the Federal Government reached an agreement on several tax measures. On 16 October 2016, during the policy statement, the Prime Minister announced what follows:

  • The speculation tax for individuals on the transfer of quoted shares would be abolished as of 1 January 2017;
  • Tax on stock exchange transactions: the limits would be doubled (for shares, bonds and funds) and the tax would be extended to foreign platforms;
  • Increase in the withholding tax rate from 27 to 30 % as of 1 January 2017;
  • Introduction of a new anti-abuse rule regarding the “internal capital gains” on shares: in case of contribution in capital of shares by an individual, there would be no tax-free step-up (unrealised capital gains would be deemed to be considered as tax reserves in order not to avoid the dividend withholding tax);
  • Company cars: employees could freely choose between a company car, another mode of transportation or an increase in the net salary;
  • Limitation of the deduction (based on the CO2 emissions) of fuel cards within companies;
  • Some tax and social incentives would be linked to a minimal period of residence or employment in Belgium;
  • Intensification of the fight against tax fraud.

What about the major corporate tax reform announced last August?

The Government has confirmed the announced corporate tax reform but the texts are not yet ready. The process continues in order to result in a reform as soon as possible.

The aim of the Government is also:

  • to reduce the corporate tax rate;
  • to support investments in SMEs (Small and Medium-sized Entities), the Digital Agenda and the Starters;
  • to create jobs;
  • to bring (more) tax certainty and tax fairness; and
  • for individuals, to introduce taxation of capital gains on “large participations” (majority shareholders), but also to restore incentives in order to attract capital towards SMEs and to stimulate capital increase.

The above tax measures have not yet been drafted and are still subject to further changes.

Link to the slides of the press release of Prime Minister: DutchFrench

For any questions, don’t hesitate to contact your local PwC contact.

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 […]

nicolas-de-limbourg-author

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.

Benefit in kind – Private use of a company car: Updated formula for 2015

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 dated 16 December 2014. For income year 2015, the reference CO2 emission for the above taxable benefit in kind is adapted […]

nicolas-de-limbourg-author

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 dated 16 December 2014.

For income year 2015, the reference CO2 emission for the above taxable benefit in kind is adapted as follows:

  • Petrol, LPG or natural gas cars: 110 g CO2/km (instead of 112 g C02/km for income year 2014)
  • Diesel cars: 91 g CO2/km (instead of 93 g C02/km for income year 2014)

Please note that the minimum taxable benefit in kind for a company car (i.e. EUR 1.250 for income year 2014) has not yet been published for income year 2015.

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

The above reference CO2 emission is effective as of 1 January 2015 and the corresponding benefit in kind should already be processed in the payrolls for January.

Due to this change, the taxable benefit in kind will slightly increase in income year 2015 compared to income year 2014.

 

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 […]

nicolas-de-limbourg-author

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 […]

nicolas-de-limbourg-author

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

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, […]

nicolas-de-limbourg-author

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 […]

nicolas-de-limbourg-author

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 […]

nicolas-de-limbourg-author

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/

New Belgian Personal Income Tax Measures – Update

On 30 December 2011, the Act of 28 December 2011 containing various (tax) measures was published in the Official Gazette.  It contains some – but not all – of the measures announced by our government in December of last year. The personal income tax provisions, recorded in this recent Act, concern: -       changes in the […]

nicolas-de-limbourg-author

On 30 December 2011, the Act of 28 December 2011 containing various (tax) measures was published in the Official Gazette.  It contains some – but not all – of the measures announced by our government in December of last year.

The personal income tax provisions, recorded in this recent Act, concern:
-       changes in the tax charge on interest and dividend income;
-       new valuation method with regard to the taxation of the benefit in kind for the private use of ‘company cars’;
-       major changes with regard to ‘expenses for energy savings’ in houses;
-       increased valuation for the benefit in kind of stock options.

Most of the envisaged measures will come into force as from 1 January 2012.

You can find more information on our website:  http://www.taxreform.be/