Benefit in kind – Private use of a company car: updated formula for 2017

The new reference CO2 emission for calculating the taxable benefit in kind for the private use of a company car in the hands of company directors and employees has been published on 5 December 2016 (Royal Decree of 24 November 2016).

For income year 2017, the following CO2 emission will be applied to the above taxable benefit in kind:

  • Petrol, LPG or natural gas cars: 105 g CO2/km (instead of 107 g CO2/km for income year 2016).
  • Diesel cars: 87 g CO2/km (instead of 89 g CO2/km for income year 2016).

Please note that the minimum taxable benefit in kind for a company car (i.e. EUR 1.260 for income year 2016) has not yet been published for income year 2017. There are no further changes to the lump-sum valuation method for the benefit in kind.

The above reference CO2 emission is effective as of 1 January 2017 and the corresponding benefit in kind should already be processed in the January payrolls.

Due to this change the taxable benefit in kind will increase, which will result in a slightly higher tax charge in income year 2017 compared to income year 2016. This will especially be the case if the same company car would be registered for the first time in 2017 instead of 2016. For company cars that were already registered prior to 2017, the yearly age reduction (6% of the catalogue value of the company car) will be applied in the course of 2017 which will then decrease the taxable benefit.