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Fiscal and social greening of company cars

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On 10 November 2021, the parliament approved the act on fiscal and social greening of mobility. This act contains a number of reforms relating to the company car taxation system, with the aim of greening the company car fleet.


As from 1 January 2026, employers will only be able to deduct emission free purchased, leased or rented company cars. The deductibility remains in force for emission free company cars purchased, leased or rented before 1 January 2027. For emission free company cars purchased, leased or rented after this date, the existing deductibility of 100% will be gradually decreased from 2027 onwards, to reach a deductibility of 67,5% as from 2031. 

For company cars purchased, leased or rented between 1 July 2023 and 31 December 2025, a transition period has been introduced. The minimum deduction (50% - 40%) will be abolished from 2025 onwards and the maximum limit of 100% will be gradually reduced to 0% in 2028. Finally, the existing deductibility method remains the same for company cars purchased, leased or rented before 1 July 2023 (“grandfathering”).

The new rules applicable in the personal and corporate income tax, are also extended to the tax on legal entities. The part of the deductibility that is restricted in the personal and corporate income tax, is taxed at a rate of 25% in the legal entities tax. 


In addition, the installation of charging stations is encouraged in two ways:

  • An increased depreciation rate in the corporate income tax is provided for the installation of publicly accessible charging stations; and
  • A reduction in the personal income tax is provided for the installation of a home charging station.

These measures are restricted to investments in new charging stations that are made in the period from 1 September 2021 to 31 August 2024 and meet certain conditions.


For non-emission free cars, the solidarity contribution due by the employer for providing a car to the employee is increased (multiplication factor of 2,25 as from 1 July 2023, increased to 5,5 from 1 January 2027). For emission free cars, the minimum contribution applies (which, however, increases from 20,83 EUR to 31,15 EUR in 2028). 


As from 1 January 2022, a number of aspects related to the legal framework on the mobility budget are modified. These modifications aim to simplify, make more flexible and broaden the mobility budget in order to make it more attractive.

A mobility budget allows employees to change their company car for a mobility budget to be spent on several mobility solutions (divided into several pillars). 

As from 1 January 2026, only a fully emission free car will be considered environmentally friendly in pillar one. The zero emission condition also applies to all motorized ‘soft mobility’ vehicles, as well as to carpooling, car-sharing and car rental services with driver.

In both the ‘soft mobility’ and ‘public transport’ categories, elements are added, increasing the second pillar choices for employees. In addition, the equations with sustainable means of transport are extended.

Finally, certain rules regarding the mobility budget are modified and clarified. For instance, the waiting period that requires employees to have (the right to) a company car for a certain period in order to be able to benefit from the mobility budget is abolished.  The employer will be obliged to make at least one offer to employees under pillar two and a number of aspects on the allocation and calculation of the mobility budget are clarified.

To do

When introducing a mobility budget, employers should take into account the abovementioned changes. In addition, given the decreasing fiscal advantage over time, acting at the right time seems to be recommended for greening your company car fleet in the most advantageous way.