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Greening mobility: what tax and social measures have been adopted?

12 November 2021 Emma Suzanne van Aggelen Employers

The federal coalition agreement already stipulated that new company cars must be carbon-free from 2026. The Council of Ministers has already approved a preliminary draft law that gives shape to the greening of mobility through taxation. On 10 November 2021, the bill received final approval. We provide an overview of the changes. The measures still have to be officially published in the Belgian Official Journal.

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Increase of CO2contribution

Employers who make company cars available that may also be used for private purposes are liable for a solidarity contribution (CO2 contribution) on these. This contribution is calculated according to the CO2 emissions of the company car.

For non-carbon emission free passenger cars, this CO2contribution will be gradually and substantially increased. The calculated contribution will be multiplied by a factor increasing from 2.25 (from 1 July 2023) to 5.50 (from 1 January 2027).

Carbon-free cars are currently subject to the minimum amount of the solidarity contribution. That minimum amount will also be increased gradually from 1 January 2025.

Both these increases will not apply to cars purchased, rented or leased before 1 July 2023.

Carbon emission free company car fleet

Fossil fuel company cars will not be banned, but for cars purchased from 2026 onwards, only the electric carbon emission free company cars will be tax deductible. There will be a phasing-out scenario for the favourable tax regime for fossil-fuelled company cars. This means that for such cars purchased in the period from 1 January 2023 to 31 December 2025, the tax deductibility will gradually be abolished.

From 2027, the 100% tax deductibility for carbon emission free cars will also be gradually reduced to 67.5%.

For plug-in hybrid cars purchased from 1 January 2023, the tax deductibility of petrol or diesel costs will be limited to 50% from that date. This is to maximise the stimulation of electric driving with these types of cars.

Simplification and flexibilisation of the mobility budget

The mobility budget will be simplified and made more flexible. In addition, there is an increased focus on sustainable transport options.

For example, the cars that can be chosen in pillar 1 of the mobility budget will have to be emission-free from 2026, and the spending options in pillar 2 (sustainable mobility) will be expanded from 2022. This broadening of pillar 2 includes, for example, electric driven vehicles, parking costs associated with the use of public transport, an extension of the radius within which housing costs are eligible for financing via the mobility budget, and so on.

The current waiting period that requires the employee to have a company car for a certain period of time before being able to apply for a mobility budget will be abolished as from 2022. Eligible employees will be able to apply for a mobility budget immediately. The waiting period applicable to the employer was not affected.

From the same year, the amount of the mobility budget will be limited. There will be a minimum amount of EUR 3 000 and a maximum of 1/5th of total gross salary, with an absolute maximum of EUR 16 000 per year.

Tax relief and increased cost deduction for charging stations

A tax benefit will be granted to individuals and companies that install charging stations.

For individuals, a tax credit is introduced which applies to expenditure paid between 1 September 2021 and 31 August 2024. This tax reduction is phased out over time. The amount of the investment for which a tax reduction will be granted is limited to 1 500 euros per charge post and per taxpayer. One condition is that the charging station must be intelligent (allowing charging to be optimised) and only use green electricity.

For companies, the tax benefit takes the form of an increased cost deduction applicable to depreciation relating to investments made in the period from 1 September 2021 to 31 August 2024. This cost deduction will also be phased out over time. One condition is that the charging infrastructure must be publicly accessible to third parties. In addition, the charging infrastructure must be reported to the FPS Finance so that the available charging stations can be mapped out.

Other measures

There will be an increased investment allowance for companies that invest in the purchase of zero-carbon trucks, the installation of electric charging infrastructure or refuelling infrastructure for hydrogen.

Finally, the supply of electricity for charging an electric vehicle will be considered part of the purchase of electricity without a separate distribution obligation.

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Written by Emma Suzanne van Aggelen

Juridisch adviseur bij Acerta

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