How to calculate the benefit in kind for an electric company car?

Electric cars are becoming more popular due to their increasing range and tax benefits. Employees who also use an electric company car for private purposes are taxed on this. As such, there is a complex calculation involved that depends on several factors. Learn how to calculate the benefit in kind.

Three crucial criteria

To calculate the benefit of all kind, there are three crucial factors that have a significant impact.

• Catalog value: this is the list price of the vehicle including options and accessories, excluding VAT and discounts.
• CO2 emissions: for electric vehicles, CO2 emissions are usually low, and in many cases zero. This has a positive impact on the benefit in kind.
• Age of car: newer cars often have a higher benefit in kind.

The benefit of it all

The taxable benefit in kind is calculated using a formula established by the government. Rules and rates change annually, so be sure to consult the latest information from the Belgian tax authorities.

The formula to calculate the benefit in kind of an electric vehicle is: list price x 4% x 6/7 x age coefficient of the vehicle. Below is a summary of these coefficients.

Period since first registration Age coefficient of the car     From 0-12 months 1   From 13-24 months 0,94   From 25-36 months 0,88   From 37-48 months 0,82   From 49-60 months 0,76   More than 60 months 0,70

Hybrid cars: fake or not?

Hybrid cars are dropping in popularity because they often qualify under the "fake hybrid" category if they emit more than 50 grams of CO2 or have an energy ratio where the electric battery is less than 0.5 kWh/100 kg of the vehicles weight.

"Fake hybrids" are considered equivalent to gasoline cars and use the following formula: list price x [5.5 + ((CO2-91) x 0.1)] % x 6/7 x age coefficient of the vehicle. A "real" hybrid has the same formula as the electric car.

Tax tales

The tax deductibility of hybrid cars is being systematically reduced.

Starting in 2025, deductibility will be reduced by 25% annually. For full and mild hybrids, this includes fuel costs. The minimum deductibility disappears completely after 2024. For fuel costs, this is not the case until 2026.

The CO2 contribution or solidarity contribution also increases. Specifically, the average contribution rises from 50 euros per month in 2023 to 275 euros in 2026.

The benefit for hybrid cars already largely disappeared on July 1, 2023. Hybrid cars ordered after Jan. 1, 2026 lose tax deductibility altogether.

What does the future bring?

The full deductibility for electric cars ordered before Jan. 1, 2027, applies until 2032. Later-ordered cars will see deductibility diminish but not completely disappear unlike hybrid cars.