Benefit in kind on private use of company cars: New CO2 emission benchmarks for 2018

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Date:
19 Dec 2017

The amount of the benefit in kind on the private use of a company car can be calculated applying a CO2 percentage to 6/7 of the catalogue value of the car. The CO2 emission benchmarks vary each year. The Royal Decree of 13 December 2017 indicates the CO2 emissions benchmark applicable for 2018.

Generally, when an employer makes a company car available to its employees or managers, it usually permits the private use of the car. Yet, the private use of a company car constitutes a benefit in kind subject to tax.

Since 1 January 2012, the taxable benefit is determined by applying a CO2 percentage to 6/7 of the catalogue value of the car and a percentage according to the age of the car as well.

The percentage reference of CO2 is determined each year by Royal Decree. For 2018, the CO2 emission benchmarks are the following: 

Vehicles fuelled by petrol, LPG or natural gas:    
105 g/km (same as in 2017)    

Diesel-powered vehicles:
86 g/km (in 2017: 87 g/km)

For those CO2 emission benchmarks, the basic CO2 percentage amounts to 5.5%.

When a vehicle exceeds the CO2 emission benchmark, the base percentage of 5.5% is increased by 0.1 per gram of CO2, with a maximum of 18%. When the CO2 emission of a vehicle is lower than the CO2 emission benchmark, the base percentage is reduced by 0.1% per gram of CO2, with a maximum of 4%.

As an example, if an employee receives a new company car in 2018 (first period of 12 months) equipped with a diesel engine, with an emission rate of 120 g/km and a catalogue value of EUR 35,000, the annual benefit in kind will amount to EUR 2,670 (35,000 x 6/7 x 8.9%).


> Action point
The CO2 emission benchmarks must be taken into account each year in order to determine the benefit in kind on the private use of a company car, as this can vary. For 2018, you will have to calculate this benefit in kind on the basis of the CO2 emission benchmarks recently published by Royal Decree.