The commercial vehicle is electrifying at a rapid pace. Therefore, anyone who still drives a polluting company car will have to pay more. Because the political debate on this topic has reached a dead end, many pay stubs will contain errors at the end of January.
Victim of your success?
Hundreds of thousands of employees won't know how much they earned in January until the end of February. The reason: the rapid rise of electric commercial vehicles. This ensures that anyone who still has a company car with a combustion engine will easily have to pay 300 to 500 euros in additional taxes per year compared to last year.
Finance Minister Vincent van Petegem wants to rectify this situation – extra taxes are difficult in an election year – but is currently clashing with the Greens and Socialists. Clarity on the new rates may come too late to calculate payroll at the end of this month.
Van Petegem is to some extent a victim of his own success. He hoped to quickly green the fleet through a tax advantage on the company's all-electric vehicles. This worked great. According to figures from social secretariat SD Worx, at the end of 2021, just under 5 percent of the company's vehicles were 100 percent electric. Two years later, this percentage was more than 31 percent.
Up to 300 to 500 euros in additional taxes: how is it possible?
This has serious consequences for the tax that drivers of commercial vehicles equipped with a combustion engine must pay. What's called a VAA, short for “benefit in kind,” appears on their payslip. “Since you can also use the car privately, a salary advantage is created that is assessed at a fixed rate. You pay taxes on that,” says Veerle Michiels of SD Worx. How high this amount will depend, among other things, on CO22Vehicle emissions and average carbon dioxide2-Emissions in the vehicle fleet: The lower the average emissions, the higher the taxes imposed on the polluting vehicle.
Due to the rapid increase in the number of electric cars, average emissions have also decreased rapidly. Therefore, anyone still driving a combustion engine will have to pay a much larger sum in 2024 – even if their car is just as polluting as it was in 2023.
For an Audi A4 with diesel engine to be used in 2023, which is an average commercial vehicle in terms of catalog value, the VAA will increase by €63 per month from 1 January. “You pay taxes on that, about 50 percent.” On an annual basis, the car suddenly became about 380 euros more expensive. For the gasoline version, it reaches 430 euros.
For the BMW sDrive18d with diesel engine, the monthly cost will rise by an estimated 35 euros – an 18 percent increase on last year. For a diesel Volkswagen Golf VIII, the cost increases by around 34 euros, or at least 30 percent more. Nothing will change for electric and hybrid cars.
How does Van Petegem want to change that?
For many people who own a company car, this isn't insurmountable, but it's still an annoying bite out of the budget. Therefore, Van Petegem wants to review the method of calculating the benefit in kind in order to mitigate the difference. CD&V has heard that it would be unfair to make these managers pay much more at once. In many cases, they are asked to drive their company car for a few more years. “They should not fall victim to the fact that they are not yet allowed to switch to an electric car.”
Van Peteghem's modification revolves around a technical issue: what exactly are the values used to calculate a car's emissions? Until now, only so-called NEDC values have been used, an old emissions standard that was replaced by the more accurate WLTP values after the Dieselgate scandal. Van Petegem now wants to include these elements in the calculation, because they provide a better picture of average carbon dioxide2emissions.
In practice, drivers of polluting company cars will have to pay less in taxes – and after recalculation, the benefit in kind will only differ by a few euros per month compared to last year instead of a few tens of euros.
But will the rest of the government follow suit?
This is difficult in principle for the Greens in government. They reportedly agree with Van Petegem's reasoning, but demand cheaper train tickets or a higher bicycle allowance in exchange for the agreement. Socialists also continue to obstruct this. They first want more clarity about the impact on the budget if hundreds of thousands of people pay less in taxes. In the meantime, Van Petegem has prepared a memorandum on the subject – the recalculation is unlikely to have any budgetary consequences.
The discussion will return to the government table on Wednesday or Friday. In all likelihood, clarity on the benefit-in-kind will only become clear after most white-collar workers' payrolls for January have already been prepared. Therefore, social security and human resources services must work with last year's figures for the time being.
“Wage calculations are now being done for most white-collar workers. Once the final emissions data is available, we will have to do a review,” says Michels. For the majority, this means the higher tax from January will be settled alongside wage calculations in February.
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