Tax on Electric Company Cars in Belgium
The principle of the company car in Belgium will not be affected for the time being, but there will be drastic changes in the near future. From 2026, employers will only be able to offer electric company cars if they do not want to lose their tax advantage. All cars must then be emissions-free. If this is not the case, businesses will no longer be able to deduct the costs of the company car from tax.
Petrol, hybrids and diesel cars registered up to and including 1 July 2023 will not lose their tax benefit. A transitional arrangement will apply to the period between 1 July 2023 and 31 December 2025.
The Deductibility of Cars
The government intends to completely stop the deductibility of cars with internal combustion engines by 2028. In 2025, the deductibility will be capped at a maximum of 75% and this will gradually decrease to 0% by 2028.
Do you have questions about electric company cars in Belgium? We explain the new rules to you.
Karine Vandenplas, Business Manager, ECOVIS Lindra, Leuven, Belgium
What will Change for the Employee?
Employees are taxed on the benefit in kind (BIK) for the private use of their company car. The amount of BIK is linked to the car’s CO₂ emissions and is therefore considerably lower for electric cars than for those with an internal combustion engine. This mechanism will also remain in place under the new rules, which means that the tax on BIK will decrease for people who switch to an emissions-free company car.
Installation of Charging Stations
Due to the increase in the number of electric cars in the future, more charging stations will be needed. The Flemish government is promising to install at least 30,000 public charging stations by 2025 for people who do not have their own. Companies that install charging stations in their car parks before the end of 2022 will be able to deduct these costs at 200%, provided that these charging stations are also open to the public, explain the Ecovis experts. Employees who install their own charging station before 2023 will be able to deduct 45% of the costs in their personal tax return. After this date, the tax benefit will drop to 30%.
For further information please contact:
Karine Vandenplas, Business Manager, ECOVIS Lindra, Leuven, Belgium
Email: karine.vandenplas@ecovis.be
