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| Headline news of Friday 27 November 2009 : |
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Changes in the taxation of company cars
- Following recent statements by Belgium's government on the State budget, on 13 November 2009 the cabinet approved a draft royal decree that will change the taxable amounts for certain benefits in kind, including company cars. The draft text has been sent up to the Council of State for review.
Currently, the taxable benefit in kind for private use of a company car granted to employees and company directors is calculated on the basis of a fixed number of privately driven kilometres (5.000 or 7.500), multiplied by a coefficient based on the fiscal horsepower of the car.
As from next year, according to the press release and to information that still has to be officially confirmed, the benefit in kind is to be determined using the same notional number of privately driven kilometres (i.e. 5.000 or 7.500), multiplied by the CO2 emissions of the car, multiplied by a coefficient (0,0021 for petrol cars and cars using LPG or natural gas and 0,0023 for diesel cars). Please note that a minimum of EUR 0,10 per kilometre will be applicable (also for electric cars).
Example:
Benefit in kind of a diesel car with CO2 emissions of 140 grams per kilometre granted to an employee who commutes 30 kilometres (one way) will be: 7.500 x 140 x 0,0023 = EUR 2.415.
Please note that this new valuation method has not yet been confirmed and could yet change. The final royal decree is expected to come into force on 1 January 2010.
- In addition, the upcoming Program Law proposes changing the corporate tax treatment of car expenses, with new scale of deductions for the costs of company cars.
Currently, the deductibility of expenses incurred for company cars (other than the costs of fuel and financing) depends on the car's CO2 emissions. As of 1 January 2010, fuel costs would no longer be fully deductible. They would become subject to a 75% deductibility cap.
Moreover, the deductibility of company car expenses linked to CO2 emissions would be changed as follows (new tables below – to be confirmed and adopted by parliament):
a) Electric cars
0 gram CO2/km - 120% deductibility
b) Diesel cars
between 1 and 60 grams CO2/km - 100% deductibility
between 61 and 105 grams CO2/km - 90% deductibility
between 106 and 115 grams CO2/km - 80% deductibility
between 116 and 145 grams CO2/km - 75% deductibility
between 146 and 170 grams CO2/km - 70% deductibility
between 171 and 195 grams CO2/km - 60% deductibility
more than 195 grams CO2/km - 50% deductibility
c) Petrol-driven cars
between 1 and 60 grams CO2/km - 100% deductibility
between 61 and 105 grams CO2/km - 90% deductibility
between 106 and 125 grams CO2/km - 80% deductibility
between 126 and 155 grams CO2/km - 75% deductibility
between 156 and 180 grams CO2/km - 70% deductibility
between 181 and 205 grams CO2/km - 60% deductibility
more than 205 grams CO2/km - 50% deductibility
In addition, the amount of depreciation (accepted for tax purposes) is to increase by 20% for electric cars and diesel cars with maximum CO2 emissions of 60 grams per kilometre.
It should be stressed that the above corporate tax treatment is part of the draft bill of the Program Law and may still be subject to amendment before being finally passed by Belgium’s parliament. These new rules are expected to come into force on 1 January 2010.
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