How to officially calculate the TCO for your mobility budget?
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On 29 September 2023, the Royal Decree was published that establishes the method of calculating the TCO ("Total Cost of Ownership"). As of now, there is an unambiguous and simple way to determine the TCO for the legal mobility budget. This regulation will come into force on 1 January 2024.
Employers will still have the option to calculate the mobility budget on an individual basis per employee or on the basis of the reference car associated with the employee's job category. The chosen basis must apply to all employees of the company.
Furthermore, employers have the option to choose between two calculation methods. Via the lump-sum value formula or via the actual cost formula. We have explained both methods below. The choice of calculation method is extended to all employees and it remains applicable for at least three years.
Actual cost formula
This is an average of the employer's annual total gross cost of providing a company car to an employee. The average is calculated (if possible) based on the last four calendar years. Thus, accidental high or low costs in a particular year of the company car are not used as the sole reference.
You must take the actual costs below into account if an employer pays for them. Actual costs are divided into four categories:
The company car
- Annual depreciation of 20 per cent of the purchase price of the environmentally friendly company car or the cost of renting or leasing. Taking into account options and accessories charged and discounts granted;
- Interest on borrowed capital;
- Fuel and/or electricity costs;
- Administration costs relating to fuel and charge cards;
- Vehicle roadworthiness costs;
- Insurance costs (including franchise fees);
- Cost of technical inspection.
Taxes and fiscal aspects
- In-service tax;
- Road tax;
- CO2 solidarity contribution in favour of the NSSO;
- Non-recoverable VAT on all cost items;
- Tax on the non-deductible portion of the above items;
- Tax on the portion of the benefit in kind that constitutes a disallowed expense.
The charging station
- Annual depreciation of 20 per cent of the cost of the charging station and its installation;
- Maintenance and repair costs of the charging station;
- Management costs of the charging station and charging cable.
Other costs
- Toll and parking fees;
- Cleaning, maintenance and repair costs;
- Cost of a replacement car;
- Cost of replacing, changing and stocking tyres;
- Expert fees when you return the vehicle at the end of the contract or in the event of a change of driver;
- Repair costs inventoried on return of vehicle end-of-contract;
- Service management costs.
Don’t add costs already mentioned in the rental or lease contract separately to the TCO. That results in double counting.
Lump-sum value formula
For the lump-sum value formula, you have to make a split between rented or leased company cars and company cars owned or via financial leasing. In both cases, you add a fixed component to a variable component.
Rented or leased company cars
The fixed component:
Annual rental or lease cost + average other annual cost* + non-deductible VAT + tax on non-deductible car cost + CO2 solidarity contribution
The variable component:
(6,000 + commuting distance x 2 x 200)** x consumption cost per kilometre***
Company cars owned or via financial leasing
The fixed component:
List value of the company car**** x 0.25 + employer CO2 solidarity contribution
The variable component:
(6,000 + commuting distance x 2 x 200)** x consumption cost per kilometre***
* These are all other costs not included in the lease or rental cost. The cost list under the 'Actual cost formula' section is used as a reference here. Use an average cost for the past three years here.
** The semi-fait scheme of VAT deduction is followed here, namely 6,000 private kilometres per year and commuting distance there and back for 200 working days.
*** 30 per cent of the exempt flat-rate mileage allowance for employees in force at the time of calculation (Since 1 July 2023: EUR 0.4237/km x 0.30. = EUR 0.127/km).
**** This is a flat-rate approach which assumes that all additional costs are included. There is no separate additional car cost. However, tax on the non-deductible part of the catalogue value has to be taken into account and the solidarity contribution is also included separately. The rate used is 25 per cent of the catalogue value. This is because the government equates this to the cost of an average vehicle travelling 30,000 kilometres a year.
Other comments
- Professional trip costs may still be disregarded when calculating TCO. The employer decides. If these costs are not included in the TCO, they must always be paid on top of the mobility budget.
- The chosen calculation method applies to all employees for at least three years. However, the lump-sum value formula is always used for employees who do not benefit from a company car or for employees who change jobs to which another company car is attached.
- If, after a three-year period, the employer decides to switch from the actual to the lump-sum method (or vice versa), this will only affect employees who newly enter the statutory mobility budget.
- If an employee pays an own contribution to use a company car, this will be deducted from the mobility budget.
Reference