As an HR or fleet manager, the date 1 July 2023 will surely be on your agenda. Indeed, from this day onwards, company car tax policy will change dramatically. With an eye on climate neutrality by 2050, the federal government decided in 2021 that non-emission-free company cars will be removed from the fleet. This article discusses how this will happen from 1 July 2023.
Company cars before 2026
From 1 July 2023, the extinction of tax deductibility for non-emission-free company cars will start. For purchased, leased and rented conventional and hybrid company cars purchased between 1 July 2023 and 31 December 2025, the tax deductibility will drop every year from 2025 onwards. The deductibility of these vehicles will fall by 25 per cent every year. In 2025, this will thus correspond to a tax deductibility of no more than 75 per cent. The current lower limits of 50 and 40 per cent will also fall away in 2025.
In 2028, there will be no deductibility for conventional and hybrid company cars. All company car-related costs will then be rejected expenses and thus subject to corporate income tax. This means that in 2028, the employer will no longer be able to deduct any of the company car-related costs from his/her taxable income. Thus, taxable income increases and the employer ends up paying more taxes.
Company cars from 2026
Company cars purchased from 2026 must be emission-free to still be tax deductible. These company cars will therefore already have zero tax deductibility in 2026, 2027 and 2028.
The tax deductibility of zero-emission company cars will also begin to gradually decrease from 2027. For instance, the tax deductibility for electric and hydrogen cars purchased, leased or rented will still be 95 per cent in 2027, and 67.50 per cent in 2031. Emission-free company cars will therefore remain partially tax deductible after 2026. The tax deductibility of the purchase year is also retained for life for that vehicle. So the most interesting thing from this perspective is to buy, rent or lease an emission-free company car before 2027.
CO2 solidarity contribution
The CO2 solidarity contribution is a social contribution borne by the employer based on the CO2 emissions and fuel type of the company car. Company cars bought, rented or leased from 1 July 2023 will see a huge increase in these social contributions. This is because the current contribution will be multiplied by 2.25 from 1 July 2023.
For example, a company car bought, rented or leased before 1 July 2023 now has a monthly contribution of 65.07 euros. The same company car bought, rented or leased from July 1, 2023 will then have a contribution of 146.41 euros.
When does a company car fall under the new scheme?
- The company car falls under the new scheme if the purchase order or lease contract is signed on July 1 or later.
- The delivery date should not be looked at.
- Lifting a purchase option after 1 July 2023 of a leased or rented company car before 1 July 2023 is not considered a new purchase. The new tax rules do not apply to these cars.