Turning the vehicle fleet green: make the right decisions to maintain high deductions

Stijn Schalck   |  

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The fact that the Belgian Government wants to use fiscal measures to turn company fleets green is already well known. Less well-known is that the first steps are already being taken on 1 January 2023. They are part of a more limited deduction of the car expenses that had already started. We’ll give you the timeline so you can make well-prepared decisions around your company cars.

The deduction of car expenses from corporate income tax will shift up a gear, especially from 1 July 2023 onwards. From that date, the current formula for determining the deduction is no longer a given. It provided a linear deduction based on the fuel type and CO2 emissions.

The deduction will change for cars bought, leased or rented from 1 July 2023 but will not occur until 1 January 2025. From then on, the maximum deduction will be 75%, lowering for the assessment year 2027 to 50%, and for the assessment year 2028, a maximum deduction of only 25% will apply.

From the tax year 2029, the cost of fuel cars purchased or rented between 1 July 2023 and 31 December 2025 is no longer deductible.

Electric cars will continue to be 100% deductible during this period.

So if you want to buy new commercial vehicles in the coming years, you should consider the more limited deduction of fuel cars after a few years.

Plug-in hybrids are already being targeted faster

For plug-in hybrids, there is even a reduced deduction that comes into effect sooner. Anyone who buys, leases or rents such a car from 1 January 2023 can only deduct the cost of petrol or diesel, which applies from the 2024 tax year at 50%. Currently, it is still 75%.

For electric cars, the deductibility (in the long term) is also decreasing

In 2026, the final phase will take place. From that moment on, the cost of new cars will only be deductible if they are CO2-free. However, even for those cars, the deductibility is reduced.

The life-cycle costs remain fully deductible for cars that do not emit CO2 and that are purchased, leased or rented in 2026. The deduction will be reduced incrementally for CO2-free cars purchased, leased or rented from 1 January 2027. When the cars are purchased, leased or rented in 2027, 2028, 2029, 2030 and from 1 January 2031, the deduction rates are 95%, 90%, 82,5%, 75% and 67,5%, respectively (for the full life-cycle of the car).

Not only today but also within a few years, choosing the right time to buy commercial vehicles is crucial.

In concrete terms, the deduction of car costs for cars purchased for 01/01/2026 can be summarised as follows:

Date of purchase, lease or hireHybrid or fossil fuel deduction percentageDeduction limits
Until 01/07/2023By gram formula: 120% – (0.5 x fuel coefficient x grams CO2/km)  For the full life-cycle (min 40%, max 100%)
Between 01/07/2023 and 31/12/2025By gram formula: 120% – (0.5 x fuel coefficient x grams CO2/km)Assessment year 2026: max 75% Assessment year 2027: max 50% Assessment year 2028: max 25% Assessment year 2029 : 0%
From 01/01/2026Non-deductible 

BOFIDI will be happy to help you through new regulations.

Do you need more information? Contact your accountant or go to our contact page.