October 2024
Deduction of Costs for Company Cars and Fuel
All expenses related to a company car (maintenance, repairs, fuel, etc.) are deductible at the same rate as the vehicle itself.
Since January 1, 2020, the deduction for company cars has been linear and is calculated according to the following formula:
120% – (0.5% x coefficient x CO²/km)
As you can see, this formula includes the concept of coefficients. What does this mean?
- For diesel cars, the coefficient is 1.
- For natural gas cars, the coefficient is 0.90, provided that the vehicle’s power does not exceed 11 fiscal horsepower.
- For all other fuel types and engines, the coefficient is 0.95 (including plug-in diesel hybrids).
Regarding the use of CO² values: since January 1, 2021, it has been possible to choose between the NEDC or WLTP value if both are listed on the Certificate of Conformity (CoC). For some PHEV vehicles, the WLTP value will be lower than the NEDC value. In this case, it has been possible since 2021 to use the lower WLTP value in federal tax formulas.
Since January 1, 2021, the deduction for electric company cars has been reduced to 100% (instead of 120%).
All interest expenses related to car costs are 100% deductible, provided they are listed separately on the invoice.
Benefit in Kind (BIK)
The reference CO² emission value for 2021 was lowered compared to 2020.
The reference CO² emission value for 2022 was lowered compared to 2021.
- Diesel cars and plug-in diesel hybrids: decrease from 84 g/km in 2021 to 75 g/km in 2022.
- Petrol cars, LPG and CNG cars, hybrids, and plug-in petrol hybrids: decrease from 102 g/km in 2021 to 91 g/km in 2022.
This decrease in the reference values for CO² emissions increases the taxable benefit. The increase can be significant, but it depends on the type of engine. In the case of a plug-in hybrid with low CO² emissions, the benefit in 2022 will not increase or will increase only slightly.
Formula for Calculating the Benefit in Kind for Company Cars in 2022
- CW (catalogue value) = catalogue price = price of the new car sold to a private individual, including options and VAT actually paid. Discounts, rebates, or subsidies are not taken into account.
- AC (age coefficient) = depreciation coefficient: this reduces the BIK by 6% per year, down to a minimum of 70%.
Formula for calculating the benefit in kind:
- Diesel: catalogue value x [5.5 + ((CO² emissions – 75) x 0.1)] % x 6/7 x age coefficient
- Petrol, LPG, CNG, hybrids, and pseudo-hybrids: catalogue value x [5.5 + ((CO² emissions – 91) x 0.1)] % x 6/7 x age coefficient
- Electric cars, hydrogen cars, and true plug-in hybrids (diesel and petrol): catalogue value x 4% x 6/7 x age coefficient
The minimum percentage by which the catalogue price must be multiplied is 4%, and the maximum is 18%. The minimum benefit in kind, which was €1,370, increased to €1,400 in 2022.
The increase in the benefit in kind also affects the portion of the benefit that the employer must pay, which today amounts to 17% or 40% of the benefit in kind, depending on whether the employer provides a fuel card or not.
Plug-in Hybrids and Pseudo-Hybrids
To qualify for the advantageous deduction, plug-in hybrid company cars must meet two strict conditions:
- Battery capacity of at least 0.5 kWh;
- CO² emissions must not exceed 50 g/km.
The vehicle’s weight refers to the mass of the car, filled with 90% of all liquids and with a driver (75 kg).
For these pseudo-hybrids, the negative impact is significant, both in terms of the benefit in kind and the CO² emissions of the vehicle in question.
If the corresponding vehicle does not exist, the declared CO² emissions of the plug-in hybrid are multiplied by 2.5.
Solidarity Contribution
The solidarity contribution is a mandatory monthly fee that the employer must pay when providing a company car to their employees. This contribution is intended to cover social charges and is in addition to other taxes and contributions related to the use of company cars.
The main aspects of the solidarity contribution include:
- Purpose: It serves to finance social programs and compensate for the tax advantages that employees receive through the use of company cars.
- Calculation: The amount of the solidarity contribution depends on the characteristics of the car, such as the type of fuel and the level of CO² emissions. In general, the higher the CO² emissions, the higher the contribution.
- Employer responsibility: The contribution is paid by the employer who provides the company car to the employee.
The formula for
Petrol (including hybrids and plug-in petrol hybrids):
- Known CO²: [(CO² x 9 EUR) – 768] / 12 x 1.3525
- Unknown CO²: [(182 x 9 EUR) – 768] / 12 x 1.3525 = €98.06
CNG/LPG:
- [(CO² x 9 EUR) – 990] / 12 x 1.3525
Note: For LPG, the CO² emissions value of the petrol car before conversion must be used.
Electric cars and hydrogen cars always pay a minimum solidarity contribution of €28.17 per month.
The formula for the employer’s contribution in 2022 on CO² emissions is indexed to 1.3525 instead of 1.3222, and the minimum contribution increased from €27.54 per month to €28.17 per month.