Car taxes in 2021: clarifying in five questions and answers

NEDC 1.0, NEDC 2.0, WLTP... which acronym is applicable ?

NEDC 1.0, NEDC 2.0, WLTP... It has been unclear since 2017 - 2018 to fleet managers but also drivers of company cars which acronym applies. This is because each of these abbreviations corresponds to a CO2 value (which may differ greatly). However, these values are critical as they are used as the basis for the taxation of company cars. Moreover, it has to date been unclear which value would apply from 1 January 2021. This has now become clear. We are pleased to summarize this for you in five questions and answers.

 

1. NEDC, WLTP... what does it stand for?

NEDC 1.0: All cars registered prior to 1 September 2017 have been approved in accordance with the New European Driving Cycle (NEDC) fuel consumption and emission test, which has been in force for decades.

WLTP: All new models put onto the market from 1 September 2017 and all cars registered from 1 September 2018 onwards have been tested in accordance with the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP), the emission values of which are closer to reality (and therefore significantly higher).

NEDC 2.0: To ease the tax transition, it has been mandatory for car manufacturers to use this value after the WLTP came into force. This value is obtained by converting the result of the WLTP to the old NEDC standard using a formula legally established in Europe. NEDC 2.0 values are lower than WLTP values, which reduces the tax impact.

2. What are the European rules on vehicle certification?

These are the guidelines for manufacturers:

– They must calculate an NEDC 2.0 value for WLTP cars using the WLTP value applicable until and including 31/12/2020.
– From 1/1/2021 onwards, they may still use this NEDC 2.0 value, although this is optional.
– Until 31/12/2022, they must use this NEDC 2.0 value for cars that emit less than 50 g/km CO2.

 

3. What is FPS Finance's decision?

As long as there is no fully empowered federal government to draw up different legislation for this, the federal tax authority has decided to follow the European regulations closely. Therefore, these are the CO2 values to be taken into account when calculating deductibility and benefit-in-kind from 1 January 2021:

  • The NEDC 1.0 CO2 value if the vehicle has only one NEDC value;
  • The WLTP CO2 value if the vehicle has only one WLTP value;
  • The NEDC 2.0 or the WLTP-CO2 value (free choice) if both are available for the vehicle.

4. Where can I find these CO2 values?

The NEDC values, if any, can be found under Point 49.1 of the vehicle's certificate of conformity.
The WLTP values, if any, can be found under Point 49.4 of the same certificate of conformity.
The "weighted combined" CO2 value must be taken for rechargeable electric vehicles and the "combined" CO2 value for other engines.

 

5. Tax deductibility and benefit-in-kind... but what about the Solidarity Contribution?

The Solidarity Contribution, which is also based on the CO2 value, is not the responsibility of the Minister for Finance (Alexander De Croo, Open Vld) but that of the Minister for Social Affairs and Public Health (Maggie De Block, Open Vld). Although no relevant decision has been confirmed yet, we can reasonably assume that the CO2 rules of the Solidarity Contribution will be aligned with the views of FPS Finance in this regard. LeasePlan will, of course, keep you informed of any relevant developments.

Do you have any questions about this?

Fill in the form and we will gladly help you to make the right choices taking into account the tax changes as from 2021.