New tax rules for company cars: nothing will change this year
Many entrepreneurs and self-employed people have questions about the recent change in company car tax, as a result of which in the future only fully emission-free cars will be tax deductible. There is no reason to worry, however, as nothing will change yet for all cars you order this year and in the first half of 2023.
With the reform of the tax deductibility, the federal government wants to make the Belgian company car fleet greener. In this context, it has decided that cars with a combustion engine (including plug-in hybrids) ordered from 2026 onwards will no longer be tax deductible and that the deductibility of such cars ordered from 1 July 2023 onwards will gradually fall to 0%.
No change until 30 June 2023
Mark 1 July next year on your calendar. Only then will the new rules take effect. This means that the car that you order by 30 June 2023 does not yet fall under the new deductibility rules. As long as you use the car in question, it will continue to be tax deductible according to the formula that applies to any other car you own today.
There is no reason to delay ordering a car with a diesel or petrol engine: its tax treatment remains unchanged as long as you order it before 1 July next year. Electric cars are already 100% deductible today, so there is no point in postponing any decisions.
If you order your diesel, petrol, plug-in hybrid or any other non-electric car from 1 July 2023 onwards, its fiscal advantages will be reduced at an accelerated pace. The deductibility of these cars will drop by 25% each year under the so-called "phasing-out" scheme. Non-electric cars that you order from 1 July 2023 onwards will therefore no longer be tax deductible after a maximum of four years of use.
Special situation for plug-in hybrids as from 1 January 2023
For plug-in hybrids, there is an additional change. Under the current rules, the fuel costs are tax deductible at the same rate as the car itself. For orders as from 1 January 2023, this will no longer be the case. The plug-in hybrid itself will retain its current tax deductibility, but the fuel costs (petrol or diesel) will only be 50% deductible from that date.
The order date counts
For the new rules to take effect, the government always looks at the order date and not the delivery or registration date. It is therefore sufficient for the order form for the purchase or lease contract to have been signed by 30 June 2023 at the latest in order to continue to benefit from the current rules. For plug-in hybrids, the latest order date is 31 December of this year if you also want to benefit from the (almost) full fuel cost deduction.