Tax treatment of company cars in 2025
In 2022, the federal government took certain measures to make the vehicle fleets of Belgian companies more environmentally friendly. The aim is to phase out combustion engine company cars by 2026, which is why tax breaks are being reduced.
In this article, we discuss the tax deductibility of company cars, the benefit in kind and the solidarity contribution.
Tax deductibility of fossil-fuel vehicles
Vehicles purchased before 1 July 2023
Nothing will change for these vehicles. The cost of a vehicle purchased by you or your company before 1 July 2023 will remain deductible to the same extent as it is now and for the lifetime of the vehicle. The tax deductibility of the vehicle and fuel costs is calculated according to the following gram formula:
Deductible percentage = 120% - (0.5 x fuel coefficient x grams of CO2 )%
(Fuel coefficient: diesel = 1 / petrol/LPG = 0.95 / CNG < 12 hp = 0.90)
Important: Vehicles with emissions of 200g or more can never deduct more than 40%. Vehicles with emissions of less than 200g can deduct a minimum of 50% and a maximum of 100%.
Vehicles purchased in the period from 1 July 2023 up to and including 31 December 2025 (transitional phase):
Fossil-fuel passenger cars (diesel, LPG, CNG or petrol) purchased in the period from 1 July 2023 up to and including 31 December 2025 are subject to a transitional arrangement. Starting from 2025, the deductibility of costs according to the gram formula will be gradually capped as follows:
| Year | Deductibility |
| 2025 | 75% |
| 2026 | 50% |
| 2027 | 25% |
| 2028 | 0 |
Vehicles purchased on and after 1 January 2026
Vehicles purchased after 31 December 2025 that run (partly) on fossil fuel will no longer be tax deductible.
The tax deductibility of carbon-free vehicles
Purchased before 1 January 2027
As stated above, the tax deductibility of fossil-fuel company cars is calculated using the gram formula. Given that electric cars and hydrogen-powered cars emit zero grams of CO2, their associated costs are 100% deductible. This 100% deduction applies to the full lifetime of carbon-free vehicles purchased before 1 January 2027.
Purchased on or after 1 January 2027
The deductibility of costs associated with carbon-free vehicles bought after 31 December 2026 will gradually be limited to 67.5%. A transitional arrangement has been agreed which means that for this type of vehicle, the deduction will depend on the year of purchase during the transitional phase:
| Purchase date | Lifetime deductibility |
| Before 1 January 2027 | 100% |
| in 2027 | 95% |
| in 2028 | 90% |
| in 2029 | 82,5% |
| in 2030 | 75% |
| in 2031 | 67,5% |
What’s involved when making a company car available to your employee?
If you’d like to include a company car in your employee's remuneration package, there are two things to consider: the benefit in kind (BIK) and the solidarity contribution.
Much has been written about the benefit in kind. This benefit means that a company manager or employee can have personal use of business goods and services for free (for instance, private use of your company laptop or company car).
The tax authorities regard this as a form of income and, therefore, it is subject to taxes and social security contributions. Some benefits in kind are lump-sum benefits, whereas others have to be calculated. The calculations for both are provided in the tables below:
Benefit in kind (BIK)
Calculation method
BIK = list price x CO2 emissions % x 6/7 x age %
Calculating CO2 emissions:
- Basic percentage of 5.5% => minimum percentage = 4% (electric cars) and maximum percentage = 18%
The CO2 percentage increases depending on the emissions:
- Benchmark emission level for a diesel vehicle = 67 g/km
- Benchmark emission level for a petrol, CNG and LPG vehicle = 82 g/km
- Benchmark emission level for an electric vehicle = 0 g/km
For every additional 1g/km emitted, the calculation percentage is raised by 0.1% (up to a maximum of 18%).
The complete formula (including the above) for calculating the BIK:
- Diesel vehicles: List price x [(5.5 + 0.1 x (CO2 - 67)) /100] x 6/7 x age %
- Petrol/natural gas: List price x [(5.5 + 0.1 x (CO2 - 82)) /100] x 6/7 x age %
- Electric vehicles: List price x [4%] x 6/7 x age %
The age percentage depends on the age of the car:
| Age of the car | Age percentage |
| 0 - 12 months | 100% |
| 13 - 24 months | 94% |
| 25 - 36 months | 88% |
| 37 - 48 months | 82% |
| 49 - 60 months | 76% |
| 61 months and older | 70% |
Solidarity contribution
For vehicles you bought, leased or rented before 1 July 2023 , the solidarity contribution is calculated as follows (method used since 1 January 2023):
| Fuel | Calculation method |
| Minimum contribution | 31.34 euros a month |
| Petrol | [(CO2 emissions x 9 euros) - 768] : 12 x 1.5046 |
| Diesel | [(CO2 emissions x 9 euros) - 600] : 12 x 1.5046 |
| LPG/CNG | [(CO2 emissions x 9 euros) - 990] : 12 x 1.5046 |
| Electric | 31.34 euros a month (= minimum contribution) |
As part of the drive towards greener mobility, the solidarity contribution has gone up sharply since 1 July 2023. The government has done this to encourage employers to invest in zero-emission company cars.
For vehicles you purchased on or after 1 July 2023, multiply the above amount by an additional factor:
| Purchase date | Factor |
| On or after 1 July 2023 | x 2.25 |
| On or after 1 January 2025 | x 2.75 |
| On or after 1 January 2026 | x 4.00 |
| On or after 1 January 2027 | x5.50 |
Remember, borrowing money also costs money.
