The taxation of company vehicles was revised in 2020. What are the new measures, the impacts on your company, and how should you adapt to these changes?
The aim of these modifications, pursued by the government, is to make the Belgian car fleet more ecological. However, these changes are not without consequences, so it is essential to analyze the situation in more detail to anticipate the fiscal aspects for a sustainable future and take advantage of favorable taxation by opting for “greener” vehicles.
The First Major Change: Deductibility of Mixed Company Vehicles
Previously, the deductibility was based on CO2 emissions and the type of fuel used. The deduction ranged from 50% to 90% for gasoline and diesel-powered vehicles.
The new formula used by the government since January 1, 2020, is as follows:
120% – (0.5% x coefficient x CO2/km)
Applied Coefficients:
- 1 for diesel vehicles
- 0.95 for other vehicles
- 0.9 for natural gas vehicles with a maximum of 11 CV
The maximum deductibility is now between 40% and 100%, even for electric vehicles, which were previously deductible at 120% until 2019.
Vehicles emitting more than 200g of CO2/km will now be deductible only at 40%.
The 50% threshold is already reached with diesel vehicles emitting 140g of CO2/km and gasoline vehicles emitting 147g of CO2/km.
Example – Diesel Vehicle:
A diesel vehicle emitting 99g of CO2, which was previously deductible at 90% in 2019, will now be deductible at:
120% – (0.5% x 1 x 99) = 70.50%
Comparison Table:
| 2019 | 2020 | |
|---|---|---|
| Deduction | 90% | 70.50% |
| Vehicle Expenses | €8,000 | €8,000 |
| Tax-deductible Expenses | €7,200 | €5,640 |
This represents a reduction of €1,560 in deductible expenses for your company in 2020.
Example – Plug-in Hybrid Vehicle:
A plug-in hybrid vehicle emitting 45g of CO2/km that meets the following two conditions:
- Energy ratio of at least 0.5 kWh per 100 kg of vehicle weight
- Maximum CO2 emission of 50g/km
120% – (0.50% x 0.95 x 45) = 98.63% deductible
It is essential to be careful when acquiring a hybrid vehicle to ensure it meets these two conditions to avoid a significantly lower deduction on your vehicle-related expenses.
As you can see, the choice of your vehicle, especially regarding the engine type, has significant tax consequences.
Consider this when renewing your vehicle fleet and, where possible, prioritize vehicles with low fuel consumption and those that are environmentally friendly.
If you need further information or advice on this matter, feel free to contact us.
