Taxation & company cars
in Belgium:
Belgian Car Parc and New Car Market:
what are we talking about?
ü 4,4 mln or 80% of car parc are private cars ü 1,1 mln or 20% of car parc are company cars
2
2014 BELGIUM
New Company cars - Lease 115.291 24% New Company cars - No Lease 108.036 22% New cars of Self-Employed 16.260 3%
New Company Cars – All 229.587 50% New Private Cars 243.354 50%
Total 482.941 100
%
ü 50% of new car market are private cars ü 50% of new car market are company cars
Company car parc: better environmental
performance than private car parc since 2013
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Average CO2 emissions of company car parc are below private car parc and decrease faster
75% of company cars are less than 4 years old and thus meet Euro 5 or 6 standards,
70% of private cars are over 4 years old
•
Car Parc
CO2-emissions
New car market: since 2012, average CO2 (g/km) of new
company cars drop faster than CO2 of new private cars
ü With 400.000, the so-called “salary cars” represent 8% of Belgian car parc
ü The tax base of the company car park with allowed private use is too small for being of
significant weight and leverage in a tax shift from labor towards consumption/green taxes
Composition of the 5.500.000 car parc in Belgium Remarks 4.400.000 Personal cars 80% 1.100.000 Business cars 20% of which: Cars of Self-employed 300.000 5% Cars of Companies 800.000 15% of which: Cars without private use (=25%) 200.000 4%
Pool cars, Service cars, promo & demo cars,… Cars with allowed
private use (=75%) 600.000 12% Estimation (2015)
of which:
Cars subject to CO2-
solidarity contribution 400.000 8%
Put at the disposal of employees by the employer. Source: ONSS/RSZ
Composition of of the company car parc by
owner type and with / without private use
ü
Tax treatment of company cars is more attractive than that of salaries, but
compensate high labor costs, especially in Belgium:
Ø Company car is only 1 kind of frinch benefit out of more than 50 schemes in place in Belgium
Ø Professional use is less attractive in Belgium compared to neighboring countries:
Deductibility VAT: limited tot 50% in Belgium, even if professional use share > 50%
Ø Commuting in Belgium is considered as personal travel, not work-related
(100% personal in Belgium, 100% work-related in Netherlands, 50%/50% in Germany)
ü
Company cars are not for free… some company car tax related revenues:
Ø Non-deductible car costs of 800.000 car parc of companies: – estimated revenues: €350 Mln
Ø Non-deductible car costs of 300.000 car parc of self-employed: – estimated revenues: €150 Mln Ø Benefit in Kind for 600.000 car parc with allowed private use: – estimated revenues: €600 Mln
Ø Solidarity contribution for 400.000 car parc (source: ONSS/RSZ): – estimated revenues: €250 Mln
Ø Total estimated revenues (without revenues from vat, excise duties)
- Total estimated: €1.250 Mln
Company cars at what cost / benefit to
state and society? Some considerations
ü
When comparing mileage of company and private cars, one should take only the
private cars of workers, not all private cars:
Ø Cars of non-workers have no commuting nor professional trips
Ø Average mileage of company cars is merely higher than that of private cars of workers (KPMG)
ü
1 out of 3 workers in the private sector has a company car. Company cars are
part of daily life of 1 out of 4 households. Imagine them without company cars…
Ø Who and how to compensate the lost benefit?
Ø How would this impact the spending power of a family, since 80% of them would return to a private car ?
ü
Company cars as source of congestion?
Ø Research indicates that 80% of company car users would switch to private car if they would have no company car anymore
ü
Reverse modal split: a company car would lead workers away from using
alternative modes… solutions:
Ø Broaden modal choice: offer employees a mobility budget rather than just a car budget
Ø Free choice for employee is key, provided that his/her modal choice enables the employee to do his/her job properly
Ø Ultimate solution: a smart kilometer charging scheme…
Company cars at what cost / benefit to
state and society? Some considerations
Smart kilometer charging: logic, simple and the way forward… but at what conditions ?
ü Principle :
who travels less, pollutes less and avoids peak traffic hours and locations, will pay less than today who travels more, pollutes more and in peak traffic conditions, will pay more than today
ü Applicable to trucks, vans & cars, sur tout le réseau routier, cohérence entre Régions
ü Kilometer charging has to replace all existing car taxes (registration taxes and excise duties) ü Price differentiation based on time, place and environmental performance of the vehicle
ü Earmarking of revenues: users should get value for money, in the first place on the road network ü Making a “Fair Deal” with road users: clear communication on the use of revenues and results:
1. Road network optimization: KPI’s for road quality, safety, capacity 2. Investments in co-modal infrastructure: P&R
