Reform: benefit in kind of company cars
Last week, the Council of Government approved the draft Grand-Ducal Regulation aimed at updating the benefit-in-kind regime for company cars in order to stimulate employees to choose a vehicle with zero or low CO2 emissions.
Since 1 January 2017, the benefit in kind of the private use of the company car was no longer taxed at a flat rate of 1.5% but according to a table taking into account the motorisation and the CO2 emissions. With the new reform, 3 schemes are now applicable for the calculation of the benefit in kind.
What are the different schemes applicable under this reform?
Scheme A :
Benefit in kind taxed at a flat rate of 0.5% for electric vehicles and 0.5% to 1.8% for internal combustion engines depending on CO2 emissions: ➡️ Any vehicle ordered and registered before 31/12/2021 ➡️ Any vehicle ordered before 31/12/2021 with registration before 31/12/2022
Regime A then regime B:
➡️ Any vehicle ordered from 01/01/2022 and registered before 31/12/2022: scheme A for the year 2022 and scheme B from 2023.
Scheme B (2022-2024):
Electric vehicles: benefit in kind taxed at a flat rate of 0.5% (consumption ≤ 18 kWh/100km) and 0.6% (consumption > 18 kWh/100km) for electric vehicles. Combustion engine: benefit in kind taxed at a flat rate of 0.8% to 1.8% depending on CO2 emissions (with a ceiling lowered from 150 g/km to 130 g/km for combustion engines): ➡️ All orders from 01/01/2022 with registration until 31/12/2024 (except in 2022: scheme A)
Regime C (2025):
All vehicles except 100% electric taxed at 2% (1 or 1.2% for EVs) ➡️ All vehicles ordered and registered from 01/01/2025
💡 Our advice: anticipate delivery delays due to the semiconductor shortage and place your orders before 31/12/2021. You will also continue to benefit from the current scheme (A) for the entire duration of the contract (unless the initial duration is extended for > 6 months).
Orders placed from 01/01/2022 onwards will switch to scheme B from 2023.