Global Employer Services News

Belgium - Taxable Benefit in Kind for Private Use of Company Car Will Increase in 2025

To address environmental concerns and incentivise cleaner transportation options, the Belgian tax authorities on 12 December 2024 published the CO2 emission reference values for company cars that will be applicable in 2025 to calculate the benefit in kind (BIK). This development signals a continued trend towards stricter emissions standards, with lower CO2 emission thresholds set for both petrol and diesel vehicles compared to previous years.

For 2025, the CO2 emission reference for petrol, LPG, or natural gas vehicles has been set at 71 grams per kilometre, while diesel vehicles have been assigned a reference of 59 grams per kilometre. This represents a noticeable reduction from the 2024 reference levels, which were already lower than those from prior years. This systematic reduction is part of a broader strategy to encourage the adoption of more environmentally friendly vehicles in the corporate sector.

The calculation of the BIK for the private use of a company car remains grounded in the vehicle’s gross list price, CO2 emissions, and an age coefficient, maintaining the general framework used in previous years. Vehicles with emissions matching the reference values have a base coefficient for the BIK calculation, with adjustments made for each gram of CO2 per kilometre above or below these benchmarks. Notably, the minimum BIK rate is set at 4% but can go as high as 18%.

Special rules apply to electric and hybrid vehicles. Pure electric vehicles continue to benefit from a favourable BIK calculation, encouraging their use as a sustainable alternative. However, hybrids, particularly those classified as “false hybrids,” are subject to stricter criteria to prevent exploitation of loopholes in emission regulations.

The BIK values for hybrids depend on actual emissions, with false hybrids — those with insufficient battery capacity or high emissions — facing penalties. These vehicles are assessed based on the emissions of a comparable model with a traditional combustion engine or, in the absence of such a model, their emissions are significantly penalised.

The updated CO2 emission references and BIK calculations reflect a clear legislative push towards reducing the carbon footprint of company cars. By adjusting financial incentives and introducing stringent standards, the authorities aim to steer corporate behaviour towards sustainable mobility solutions, aligning with broader environmental objectives. This trend is expected to accelerate as technology advances and the market increasingly shifts towards greener transportation options.

For more information on the calculation of the benefit in kind or the possible alternatives to providing company cars, please reach out to your regular BDO contact or the author of this article.

Peter Wuyts
BDO in Belgium
Please accept statistics-cookies to see the content.