Employer: Fiscal aspects of company cars in 2025

In 2025, the tax treatment of company cars in Belgium will undergo further greening, with an emphasis on tax deductibility and CO₂ contribution. As a result, employers will have to choose more consciously between fossil and electric cars.

Tax deductibility

Tax deductibility depends on the CO₂ emissions of the company car:

• Electric and other emission-free vehicles: 100% tax deductible. This makes EVs the most attractive option.
• Non-emission-free vehicles: 
  • Deductibility is progressively phased out for cars bought or leased before 01.01.2026
    • Cars can only be deducted up to 75% in 2025.
    • In 2026, this will fall further to 50%.
  • Cars bought or leased after 01.01.2026 are no longer tax deductible. This will also apply to hybrid cars from then on.

For hybrid vehicles, the following rule applies in 2025: only fuel costs directly related to the electric drive are fully deductible. Other fuel costs follow the deduction rules of fossil fuel cars.

CO₂ solidarity contribution

Employers pay a CO₂ solidarity contribution to social security for company cars. This contribution rises sharply for fossil fuel vehicles:

• Electric and other emission-free vehicles: the CO₂ contribution is minimal due to their zero emissions. The minimum Co2 contribution is equal to €447.96 in 2025.
• Non-emission-free vehicles: The CO₂ contribution is calculated based on emissions and fuel type. With high emissions, the contribution rises sharply. The difference with an emission-free car also gets bigger and bigger every year due to the increasing solidarity factor, which rises from 2.25 to 2.75 in 2025.

Example

Those still using fossil-fuelled company cars will find that the net cost is rising. This encourages employees and employers to switch to electric vehicles. Below is an example comparison of three new cars ordered in 2025:

• Electric car: Volvo EC40, 62,600 euro list value, 0 g/km Co2
• Hybrid petrol car: Volkswagen Passat Variant, 62,185 euro list value, 9 g/km Co2
• Diesel car: Alfa Romeo Stelvio, 61,700 euro list value, 145 g/km Co2

TCO2 electric car* = 14,689.21 euros in 2025

TCO2 hybrid car* = €15,245.68 in 2025

TCO2 diesel car* = €18,367.69 in 2025

In this example, when using the diesel car, the employer pays about €3,700 and €3,100 more for using the electric company car and the hybrid petrol company car, respectively.

*Based on:

• Directlease operating lease prices (60 months and 25,000 km/year) were used;
• Fuel costs are based on the government formula for calculating the TCO of the mobility budget, with a commuting distance of 14 km;
• For the electric and hybrid car, the cost of a home charging station worth €2,500 (amortised over 5 years) was taken into account;

Conclusion

For employers, switching to electric vehicles in 2025 becomes not only more fiscally attractive, but also more necessary to control costs. The higher CO₂ contribution and lower deductibility of fossil-fuel company cars reduce profitability, while electric cars remain 100% deductible in 2025. Investing in EVs and charging solutions is the logical choice to minimise tax pressure and meet future requirements.

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