On Thursday 26 July 2018, the Belgian government approved the draft bill on the “mobility budget”, which would enter into force on October 1st, 2018. Compared to previous communications, the main principles were maintained, namely: the replacement of a company car into a more efficient and eco-friendly ‘multimodality’ budget based on which the employee can choose his transportation method (i.e. for the whole distance or a combination of several transportation modalities).
Mobility budget: the principles
The budget is equal to the total cost of ownership (“TOC”) of the replaced company car.
Contrary to the “mobility allowance”, the mobility budget allows employees to choose from the following possibilities:
Rules to consider
PILLAR I consist out of the possibility for the employee to replace his current company car for an electric one or any other company car with (1) a CO2-emission of maximum 95 g/km and (2) which is compliant to the newest EURO-norm (E6-norm). A “fake” hybrid is excluded (hence, a hybrid car is possible insofar the capacity of the battery equals at least 0,5 kWh per 100kg car weight). Finally, in case the replaced company car was already compliant to these conditions, the new car must have at least the same values as the replaced car had.
The employee could also choose to use (the remainder of) his budget for sustainable transportation. In PILLAR II the employee can invest his budget in one of the following sustainable transportation methods:
- “Soft transportation” (purchase and maintenance of all kinds of (electric) bicycles, steps, monowheels, etc. which have a maximum speed of 45 km/h);
- “Public transportation” (subscriptions or individual tickets for public transport, nationally and internationally);
- “Collective organized transportation”;
- “Shared transportation” (shared use of cars, bicycles, motorcycles etc).
The draft bill also reveals in this respect that the mobility budget can also be used for paying the rent or mortgage loan for a house or apartment located within a 5 kilometer radius from the usual work place. The other assimilation is the combination of the free disposal of a bicycle and the payment of a kilometer allowance for using the bike for transportation purposes between the place of residency and the usual work place.
PILLAR III consists out of the payment of a cash amount (at the end of each year) if the budget would not have been spent by then (PILLAR I and II). Because of its specific social security treatment, it is stated as well that the cash amount contributes to the employees social security entitlements.
Tax and social security treatment of the different pillars
The tax and social security treatment can be summarised as follows :
The contribution of 38,07% in PILLAR III is to maximise the use of PILLAR II (and I).
Which employees can apply for the mobility budget?
If the employee wants to apply for the mobility budget, he or she must have had or at least have been entitled to a company car during 12 months within a reference period of 36 months before the request to apply for the mobility budget and actually have had a company car or be eligible for having one at least 3 months (non-stop) prior to the application request for the mobility budget.