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> Benefit in kind
Benefit in kind
Calculation of the benefit in kind for company cars
- Including VAT and options but without discounts.
- Following the distance home-to-work:
- ≤ 25 km = 5.000 km / year
- > 25 km = 7.500 km / year
| 2011 | 2012 | Difference | |
|---|---|---|---|
| Benefit in kind - driver | |||
| Additional amount of disallowed expense - employer | - |
Note: the benefit in kind calculated this way does not take the age of the vehicle into account.
Company car taxation for vehicles that can also be used privately, has been changed since January 1st, 2012.
On top of this, an additional amount of disallowed expenses related to company cars has been introduced for the employers. It result in an increase of corporate tax.
Until now, the benefit in kind was calculated based on:
- the CO2 emissions from the vehicle
- the distance home-to-office (5 000 km - 7 500 km)
- the CO2 emissions from the vehicle
- the distance home-to-office (5 000 km - 7 500 km)
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Fuel
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Old formula
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Diesel
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BIK per annum = 0.00237 EUR x CO2 x 5 000/ 7 500 km
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Gasoline
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BIK per annum = 0.00216 EUR x CO2 x 5 000/ 7 500 km
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Electricity
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BIK per annum = 0.10 EUR x 5 000/ 7 500 km
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New formula since January 1st, 2012
The new calculation method is no longer based on the private mileage driven with the company car by the employee. The BIK will be based on:
- the CO2 emission
- and on the catalogue value of the vehicle (invoice value including VAT, including options and without discounts).
- the CO2 emission
- and on the catalogue value of the vehicle (invoice value including VAT, including options and without discounts).
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Fuel
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New formula
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Diesel
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BIK per annum = [5,5% + (CO2-95) x 0,1%] x catalogue value(*) x 6/7
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Gasoline
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BIK per annum = [5,5% + (CO2-115) x 0,1%] x catalogue value(*) x 6/7
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Electricity
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BIK per annum = 4% x catalogue value(*) x 6/7
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(*) invoice value including VAT, including options and without discounts.
A base CO2 coefficient of 5,5% is introduced.
This coefficient applies to all vehicles with a CO2 emission equal to the reference emission:
- for diesel vehicles the reference emission is 95 g/km
- and for gasoline vehicles it is 115 g/km.
When the CO2 emission is higher than the reference emission, the coefficient increases by 0,1% per gram CO2 (with a maximum of 18%).
The maximum BIK per annum is then: 18% x catalogue value (*) x 6/7
The maximum BIK per annum is then: 18% x catalogue value (*) x 6/7
When the CO2 emission is lower than the reference emission, the coefficient reduces by 0,1% per gram CO2 (with a minimum of 4%).
The mimimum BIK per annum is then: 4% x catalogue value (*) x 6/7
The mimimum BIK per annum is then: 4% x catalogue value (*) x 6/7
The minimum BIK is EUR 1.200 per annum (value for 2012). This amount, together with the reference emission, will be reviewed annually according to inflation and technological evolution.
New proposal for amendment to the law: correction coefficient
In addition, both for new and second-hand vehicles, the age of the vehicle will be considered.
Therefore, it is proposed to apply a correction coefficient on the list price based on the age of the vehicle.
This correction coefficient would be determined as follows:
| Period elapsed since first vehicle registration (*) | Percentage of the list price to be taken into account when calculating the benefit |
| From 0 to 12 months | 100 % |
| From 13 to 24 months | 94 % |
| From 25 to 36 months | 88 % |
| From 37 to 48 months | 82 % |
| From 49 to 60 months | 76 % |
| As from 61 months | 70 % |
(*) a month that has started, is considered a full month
We would like to draw your attention to the fact that this proposal for amendment to the law still has to be enacted and shall only apply when the amendment comes into force.
Commuter traffic and the use during weekends and during the holidays are considered private use. These annual private kilometres are translated into money. This amount is either to be paid by the driver to his employer, or is considered benefit in kind, and therefore taxable.
Following budget negotiations by the next federal government, it was decided to alter the calculation of the benefit in kind granted to the drivers as of January 1st, 2012. On top of this, an additional amount of disallowed expenses related to company cars will be introduced for the employers. It will result in an increase of corporate tax.
Following budget negotiations by the next federal government, it was decided to alter the calculation of the benefit in kind granted to the drivers as of January 1st, 2012. On top of this, an additional amount of disallowed expenses related to company cars will be introduced for the employers. It will result in an increase of corporate tax.
For all vehicles to which a BIK applies, an additional amount of disallowed expenses (“AADE”) for the employer will be applied.
The underlying reason is that the new government wants part of the tax increase related to company cars to be born by the employer.
The additional amount of disallowed expenses will be added to the disallowed expenses resulting from the limited tax deductibility of company car costs (60%-120% tax deductibility based on the CO2 emission of the vehicle).
According to the latest information the additional amount of disallowed expenses would equal 17% of the BIK.
How is the benefit in kind taxable?
How is the benefit in kind taxable?
When the employer chooses not to have the employee pay for the amount for this private use, it will be taxed as a benefit in kind. In that case, the benefit in kind is added to the gross salary. The employer is to mention this amount on the wage slip 281.10. Every personal contribution of the driver can be deducted from the benefit in kind.
The government has formulated an answer to a number of frequently asked questions with regard to the calculation of the benefit in kind.
Arval strives for maximum reliability of the information mentioned in the overview 'Simulation Benefit in Kind & additional Non-Deductible Expenses 2012'. Users of this information acknowledge that Arval can in no way be held liable for possible damage which might arise either directly or indirectly from any mistake that might appear in this overview.