Belgium
Company cars are (partly) fiscally deductible, making the country a fertile breeding ground for company vehicles. For employers, company cars are a handy way of giving the employees an extra form of payment and simultaneously solving their mobility problems. 68% of the Belgian employees use a company car for commuting.
Chapter 1: Economic and business environment
| Demographics | 11.4 million (entire country)
Source: Federal Public Administration of the Interior, 1 January 2019 |
|---|---|
| Capital | Brussels (1.2 million) |
| Major cities |
Source: Statbel |
| Languages | Dutch (60%), official in Flanders; French (40%), official in Wallonia. Both main languages are co-official in Brussels. German (<1%) is co-official with French in a small zone in eastern Belgium bordering Germany. |
| GDP |
Source: Country Economy |
| Unemployment rate | 5.7% (April 2019) Source: Trading Economics |
| Main industries | Engineering and metal products, motor vehicle assembly, transportation equipment, scientific instruments, processed food and beverages, chemicals, basic metals, textiles, glass, petroleum Belgium’s economy benefits from the country’s central location in Western Europe, its highly developed transport sector (Antwerp is Europe’s second-largest port), its diversified base of industries and services, and its highly skilled workforce (with a high level of productivity). Belgium’s workforce totals just over 5 million, with the majority (73%) in services, a quarter in industry and a small minority (2%) in agriculture. Wallonia’s old industries (coal, steel, etc.) are largely defunct; following WWII, the economic centre of gravity has moved to Flanders. Brussels is a hub for EU and other international institutions, and consequently also is a popular location of for the HQs of multinational companies. The country exports more than two-thirds of its GDP. Around 80% of its foreign trade is with other EU countries. |
| Currency | Euro |
| Interest rate |
Source: CEIC |
| Fleet Maturity Index (scaling) | 5/5 |
| Political key info | Belgium is a constitutional monarchy with a democratic parliamentary system, and a federal structure, with large powers devolved to the country’s regions and communities. At federal level, there is a Belgian government, and a bicameral Belgian parliament. There are three (territorial) regions: Flanders, Wallonia and Brussels. There are three (language-based) communities: the Dutch-speaking, French-speaking and German-speaking community. The Flemish region and Dutch-speaking community are fused, and administered by the Flemish government and parliament. Following federal elections on 26 May 2019, the centre-right coalition government led by prime minister Charles Michel, a French-speaking Liberal, is continuing in a caretaker role until a new government is formed. The federal government is competent for income taxes and VAT, as well as for federal institutions such as the Belgian National Railway (NMBS/SNCB), and policing and some elements of traffic law. Regional governments are responsible for such aspects as road and vehicle registration taxes as well as road safety and most of traffic law, as well as public transportation and mobility infrastructure (except for trains). |
| Inflation | 1.4% (June 2019) Source: Trading Economics |
Chapter 2 : Automotive market, segments & sales
| Total Car park | Total number of passenger cars in use:
Source: Statista Total number of passenger cars (2017):
Number of LCVs in use (2017):
Source: Renta | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| New vehicle registrations (Cars, LCV, Trucks) | 2014: 600,102 vehicles (total)
2015: 632,358 vehicles (total)
2016: 683,736 vehicles (total)
2017: 707,369 vehicles (total)
2018: 720,594 vehicles (total)
Souce: FEBIAC | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Top 5 brands (total market) |
Source: FEBIAC | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Model preference top 5 (total market) | Most popular car models by number of registrations in Q1 2019
Source: Auto55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Used car market/renewal cycle | Registration of used vehicles
Source: FEBIAC |
Chapter 3: Company car market
| Total Fleet Park (company cars)/Fleet penetration in total fleet sales | App. 1.2 Million vehicles (2018) In all, company cars make up around 20% of the total car fleet in Belgium. This share is much lower than their share in total sales, because company cars are replaced faster than private ones. Company cars are especially popular in Flanders and Brussels – both regions together make up 85% of the Belgian total. Source: De Standaard / FEBIAC |
|---|---|
| Evolution fleet sales (last 5 years) | Registrations of new company cars
Despite slower growth than in previous years – only by around a thousand units, less than half a percentage point – last year's figure still was an all-time record. Company cars still represented more than 50% of the annual total in new-car sales. Source: De Standaard / FEBIAC |
| Top 5 fleet brands (fleet market) | In the first half of 2019, corporate fleets in Belgium registered 156,092 new vehicles, 2.14% more than in the same period last year. According to data provided by JATO Dynamics, the most popular brands in Belgium's corporate sector during H1 2019 were:
Despite significant losses, BMW remains the biggest brand on Belgium's corporate market, but Renault is edging closer to the top spot. The French brand was the biggest winner in absolute terms, registering 1,257 more units for corporate use than in the first six months of last year. The biggest winner in relative terms was Tesla, which gained 223.6%, for an absolute figure of 1,453 units – thanks mainly to its popular Model 3. Other brands making strong gains are Dacia (+41.4% to 3,292 units) and Seat (+33.4% to 2,628 units). The biggest loser in both absolute and relative terms was Nissan, which dropped 2,354 units (-44.4%) versus H1 2018. Other brands with significant losses are Alfa Romeo (-29.7% to 588 units), Porsche (-28.6% to 848 units), Land Rover (-23.9% to 1,803 units) and Jaguar (-22.2% to 1,092 units). Source: Fleet.be |
| Fleet Model preference top 5 (fleet market) | Most popular lease car models (2018)
Source: JobAt |
Chapter 4: Taxation & legislation
Get the complete analysis about taxation and legislation in the Fleet Europe Taxation Guide, developed in collaboration with PWC. Click here for more info
4.1 Car registrationCar registrations in Belgium are personal, a change of licence plate (reregistration) is necessary when a car changes registrar. One can reuse a licence plate for a next vehicle registration.
In order to register a car, the registrar (private or moral person) needs to be a Belgian resident.
Registration is not valid as proof of ownership of the vehicle.
A licence plate comes with a 2-fold certificate of registration, one to be kept in the car and one at home, both of them are required in order to sell the vehicle.
Car manufacturers will provide a document with a new vehicle, to be completed by the insurance company and the licence plate holder to be, which is then sent to the DIV (Federal service for Mobility) who will deliver the licence plate and the 2-fold certificate of registration the next day by postal service.
Operational leasing companies will typically register a vehicle on their own name, financial leasing companies have lessees take care of registration themselves.
New passenger cars do not need to pass technical inspection for the first 4 years (except when a towing bar is installed), after which it is required every 2 years. Commercial vehicles need to pass technical inspection every year. If they are used for remunarated transport of persons (taxi, bus,…) they need to undergo inspection every 6 months.
Personalised licence plates (at least 1, at most 8 positions) are possible for a one-off extra cost of 1.000 EUR.
Delivery of a new licence plate costs 30 EUR.
A one-off car registration tax is applicable on all passenger cars. LCVs and trucks are excempt from this tax. The tax differs by Region.
For private persons and companies based in Wallonia or Brussels and for leasing and rental companies based in any region, the tax is calculated on the horsepower, cylinder capacity and the vehicle's age, ranging between a minimum of €61.50 to a maximum of €4,957.
For physical persons, not companies, in Wallonia, an "ecomalus" is added for cars emitting more than 146 g of CO2. The supplementary amount to be paid on top of the car registration tax varies between €100 and €2,500.
In Flanders the registration tax is based on environmental criteria (mainly CO2), fuel type and age of the vehicle, ranging between a minimum of €0 to a maximum of €10,728.65.
4.3 Motor vehicle taxA yearly road tax is applicable to all cars and LCVs. For private persons and companies based in Wallonia or Brussels and for leasing and rental companies based in any region, the tax is calculated on the horsepower, cylinder capacity of the vehicle.
In Flanders this registration tax is based on environmental criteria.
Trucks (>3,5T) pay a tax per kilometer on the main roads, a toll charging system, differntiated by the maximum load of the vehicle, is in place, electronically monitored.
Physical persons are subject to the personal income tax which in Belgium is about 50% of the revenue. Self-employed are subject to the personal income tax when they do not have a company.
Companies are subject to a corporate tax of 33.99% of the profit, with exceptions for SMEs and other specific situations. The disallowed expenses on car-related costs are taxed at this percentage.
Employees who use their company car for personal purposes, are taxed for that benefit in kind.
The yearly taxable amount is defined by the fiscal list price of the car (VAT included), its CO2-emissions and its age. The minimum percentage of the list price to be taken into account is 4%, the maximum 18%, with a minimum yearly taxable amount of €1,310. The taxation is usually deducted at the source, by the employer. Self-employed people, who pay for their car with their own means, are not taxed on a benefit in kind for the car they pay themselves.
Every year, the amount resulting for the formula and starting at 100% for a new car, is lowered by 6%, until the car is in its sixt year, when the minimum of 70% of the original list price is reached.
The formula for the Belgian BIK on company cars for 2018:
Diesel
BIK = Fiscal List Price x (5.5 +0.1 x (CO2-emissions - 86) /100 x 6/7 x age percentage
Petrol
BIK = Fiscal List Price x (5.5 +0.1 x (CO2-emissions - 105) /100 x 6/7 x age percentage
Minimum percentage 4%, maximum percentage 18%
Minimum for 2018: €1,310.
4.5 VATA VAT of 21% is applicable on all goods and services related to vehicles, apart from the insurance where a non-deductible insurance tax applies (27%).
The VAT is deductible on professionally used vehicles, up to 100% for LCVs and trucks, limited to an absolute maximum of 50% for pasenger cars if the professional use can be effectively proven to that level, if not a flat VAT deductibility of 35% applies.
Vehicles (and equipment/accessories) are depreciated for their economic lifetime, typically for passenger cars 4-5 years, for LCVs and trucks this may be longer.
Al other costs related to the vehicle use are taken into cost base of the current accounting year.
Vehicles in short or long term rental (operating lease) are not accounted for as assets and the rental costs are taken into the cost base of the current accounting year.
Financial leases are to be depreciated as if it were owend assets. Depreciation is being determined by the economic liftetime, and is usually 4 to 5 years for passenger cars.
Financial Renting (a leasing formula with a 16% or higher residual value), is not depreciated as if it was an owned asset, but is taken into the cost base as is the case for short or long term rental contracts.
Chapter 5: Car policies
A well-structured car policy is an absolute necessity for fleet managers in Belgium, given the fact that more than in other countries, a lot of Belgian employees have benefit cars, that are attributed solely as a means of income, in order for the employers to be able to attract the right profile for the job or evade the high fiscal burden on classic salary. For example, in Belgium almost no IT consultant or financial manager has to do without a company car, even if they don’t really need one for their professional activities. The other category of company vehicles, the so-called tool cars, are meant for sales reps, technical support teams, merchandisers and the like. Most of them also can be used for private purposes, as do the benefit cars.
A company car only forms a part of the salary package if private usage of it is allowed. In that case, the employee is taxed on the benefit in kind the car represents. There are no exact figures on the number of company cars in Belgium that can be used for private purposes, but Belgian car federation Febiac estimates that 90% of leased cars and 50 to 70% of all other cars registered to companies can also be used privately.
The importance of a genuine, elaborate car policy is key. Without it, employers and employees have difficulty determining what to do in case of traffic fines, accidents, function change, resignation or dismissal and so on. Belgian car policies include the rules of engagement relative to the company’s car and LCV fleet. They list and explain the criteria for the attribution of a car, what to do in case of (long) absence, the rules in relation to private and corporate use of the car, the use of a fuel card (is it allowed to fill up during weekends or abroad for example), what to do in case of mechanical breakdown or an accident (call the hotline of the leasing company, not the dealership nor the assistance provided by the carmaker), the choice of brands, models, engine types, accessories and optional equipment, what to do in case of fines and so on.
Legally binding or not?
In what way such a car policy is legally binding for the employee? The car policy can be a part of the employment contract. That is the case when the employer asks the employee to sign it or when it is referred to in the contract. In that case, the only way to modify it is by mutual agreement between the parties. On the other hand, it is possible to see the car policy as a single sided document in which the employer instructs the employee with regards to the dos and don’ts. It is perfectly legal for the employer to do so based on his authority as an employer. In this case, the approval of the employee is not required to change the rules of the game.
Even if it is possible to change the rules in the policy (with or without the employees’ consent), the document delivers a certain assurance to both parties and guarantees a clear and consistent treatment of the matter, reducing possible disputes to a minimum
