Mobility budget: amendments in the context of a greener tax and social mobility

On 20 October 2021, the Finance Commission in Belgium approved a Bill on greener company cars.

As announced in our previous article, the Bill introduces a new chapter dedicated to the mobility budget, modifying its legal framework (Law of 17 March 2019 on the introduction of a mobility budget).

Pillar 1: the removal of the end-of-series exception and zero-emissions condition as from 1 January 2026

As a reminder: an employee (who is eligible) can use the mobility budget to finance an "environmentally friendly" company car (pillar I). This company car is defined as an electric car or a car that meets the minimum requirements (laid down in the law on the mobility budget) in terms of CO2 emissions, emissions standards (except for end-of-series vehicles) and battery energy capacity (for hybrid vehicles).

In order to speed up the green transition of the Belgian car fleet, the Bill provides for a removal of the exemption for end-of-series vehicles from the minimum emission standard for air pollutants at the time of application for the mobility budget or a later standard for new cars.

Moreover, the Bill stipulates that, as from 1 January 2026, the "environmentally friendly" company car must be a car with zero CO2 emissions.

Pillar 2: expansion of sustainable transport (with a zero-emission condition as of 1 January 2026) and housing costs

Under the second pillar of the mobility budget, the (eligible) employee can spend the mobility budget on sustainable means of transport (soft mobility or sharing solutions) or assimilated costs.

In order to encourage the transition to greener mobility, the Bill adds the following elements to the second pillar:

Soft mobility and sharing solutions:

  • Financing costs (g. bike loans) and public or private parking costs (covered or uncovered) are added as options, but also the concept of equipment is being clarified (i.e. equipment to protect the driver and passengers, as well as equipment to increase their visibility).
  • Motorised tricycles and quadricycles.
  • Extension of public transport subscriptions to all commutes made by the (eligible) employee and his/her family members (living in the same household).
  • However, the Bill provides that motorized vehicles covered by the second pillar may no longer emit CO2 as of 1 January 2026.

Other assimilated costs

  • Housing costs: capital amortization (mortgage loan) and the distance between home and workplace is extended (radius of 10 km instead of the current radius of 5 km). 
  • Parking costs incurred when using public transport.
  • The kilometer allowance, with a maximum amount of 0.24 EUR/km (income year 2021 / tax year 2022), for home to work commutes by foot or by means of mobility devices as defined in the General Regulations on the Police of Road Traffic and Use of the Public Road, (step, skateboard, etc.). It goes without saying that, in the context of the mobility budget, this allowance cannot be cumulated with the tax exemption for allowances for commutes by foot or by means of mobility devices as defined in Article 38, § 1, paragraph 1, 9°, c) ITC 92, nor with the tax reduction for the purchase of an electric vehicle (Article 145/28 ITC 92).

Waiting period removed

Currently, employees must have a company car (or be eligible for one) during a certain period before they can apply for a mobility budget.

The Bill provides for the abolition of this condition, so that eligible employees can apply for a mobility budget immediately (without a waiting period).

Simplified determination of the mobility budget

The Bill also aims to simplify the calculation of the amount of the mobility budget ("Total Cost of Ownership" or "TCO") through the following measures:

  • The mobility budget amounts to a minimum of 3.000 EUR /year and a maximum of one fifth of the total gross salary mentioned in Article 6, § 1, paragraph 3, of the Salary Protection Act of 12 April 1965, with an absolute maximum of 16.000 EUR /year. These limits (3.000 EUR - 16.000 EUR) were set upon recommendation of the National Labour Council and the Central Economic Council (NLC advice no. 2339 - CEC advice 2021-2650 of 28 September 2021), based on the prevailing prices on the current car market.In practice, this means that if the TCO is less than 3.000 EUR, the employer must grant a mobility budget of at least 3.000 EUR (with a maximum of one fifth of the total gross salary, with an absolute maximum of 16.000 EUR).
  • Furthermore, the Bill provides the employer with the possibility to deduct the costs resulting from the use of the company car for professional purposes when determining the mobility budget of the employee, provided that the employer reimburses the costs of the employee for professional travel in addition to the mobility budget at the time it is granted.The aim is to encourage employers to convert not only company cars (cars that are not used primarily for professional purposes) into a mobility budget, but also functional cars (cars that are necessary for performing the agreed work).
  • The Bill further specifies that the mobility budget is made available on a "mobility account". At present, the mobility budget, after deduction of the amount that may be used to finance an environmentally friendly company car and the related costs (1st pillar), is made available to the eligible employee in a virtual form (Article 1 of the Royal Decree of 21 March 2019 in implementation of the 2019 law on the mobility budget). From now on, the aim is to make the entire amount of the mobility budget (including the first pillar) available on said mobility account, in order to increase the transparency when settling costs relating to pillar 1
  • Finally, the Bill offers the executive powers the possibility to establish a formula according to which the amount of the mobility budget is calculated on the basis of actual expenses or can be calculated as a lump sum amount. By doing so, the legislator wants to achieve a large administrative simplification.

Entry into force

The chapter of the Bill dedicated to the mobility budget will enter into force, if it is approved during the plenary session, on 1 January 2022, except for the provisions relating to the zero-emission condition, which will be applicable as from 1 January 2026.

A transitional period is however introduced concerning the minimum and maximum amounts for mobility budgets granted before (the adoption and) publication of the Bill in the Belgian Gazette. These mobility budgets must, if necessary, be adapted to fall within the above-mentioned limits (3,000 EUR - EUR 16,000EUR ) as from 1 January 2023 at the latest.

with Emma De Clerq

Related : Loyens & Loeff CVBA ( Mr. Kris De Schutter ,  Mr. Houssam Filali )


Mr. Kris De Schutter Mr. Kris De Schutter
[email protected]
Mr. Houssam Filali Mr. Houssam Filali
Associate - Attorney at Law
[email protected]

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