Company car: reference CO2- emission and exemption threshold

Considering the same car in 2019 as in 2018, the benefit in kind will decrease since the reference CO2 emission to apply increases. In order to determine the company car’s taxable value, one of the elements to consider is the reference CO2 emission. This reference CO2 emission depends on the fuel type of the company car. For diesel, the reference CO2-emission was 86gr in 2018 whereas for 2019 it became 88gr. For petrol, natural gas and LPG, it was 105gr in 2018 and became 107gr for 2019.  

Hence, the benefit in kind to consider for a diesel car with a catalogue value of 45K EUR and 120gr CO2 emission would have amounted in 2018 to 3.432,86 EUR whereas in 2019 the benefit in kind would be 3.355,71 EUR considering a first registration of the car in respectively 2018 or 2019. For a car registered for the first time on e.g. 1 January 2018, the increase of the reference CO2 emission combined with the age coefficient (going from 100% in 2018 to 94% in 2019) will decrease the benefit in kind even further to 3.154,37 EUR .    

On top of that, part of the benefit in kind for (only) employees is also tax exempted up to 400 EUR per year in 2018. As of 2019, the threshold is increased to 410 EUR per year. Although this exemption is immediately integrated in the payroll, taxpayers must apply for this exemption by completing box 1255 or 2255 in their income tax return.

Benefit in kind: free housing

As of 2019 the benefit in kind no longer depends on the height of the notional rental value. Previously, the benefit depended on whether or not the non-indexed notional rental value (NRV) was higher than 745 EUR. If it was inferior to 745 EUR, the benefit was determined using a factor 1,25 whereas a factor 3,8 was used if the non-indexed NRV was higher than 745 EUR.

  • Non-indexed NRV > 745 EUR : non-indexed NRV x index x 100/60 x (factor) 3,8
  • Non-indexed NRV < 745 EUR : non-indexed NRV x index x 100/60 x (factor) 1,25

This resulted in a massive difference and taxpayers were arguing that using a factor 3,8 ended up applying a higher taxable benefit than the actual rental market value of the property.

To accommodate these queries, as of 1 January 2019 tax authorities (finally) apply a factor 2 regardless whether or not the non-indexed NRV is lower or higher than 745 EUR (i.e. non-indexed NRV x index x 100/60 x 2). It means that the benefit in kind for properties put at the disposal of employees (or self-employed directors) with a non-indexed NRV higher than 745 EUR will have a (much) lower benefit in kind.

For taxpayers who benefit from the Belgian special tax status, using a factor 2 could impact the amount of tax-free allowances and therefore potentially also the net income. In case of a net guaranteed salary package, companies will be impacted as well because the net loss risks to be compensated. It is recommended to have this verified as soon as possible to implement salary updates where required.