Belgium faces billions in lost revenue due to company car tax benefits

According to a new analysis by the Federal Planning Bureau, Belgium is missing out on an estimated €3 to €6 billion in tax revenue each year due to the favourable fiscal treatment of company cars.

Almost 60% of new cars sold in Belgium are company cars, which are often used for private purposes yet taxed as a benefit in kind. If users had to cover the full cost of private use themselves, public revenues would increase significantly.

Gaps in available data

The wide range in the estimate reflects gaps in the available data, such as the second-hand value of company cars and the number of kilometres driven for private use. The Planning Bureau also notes that removing these tax advantages would likely alter the composition of the vehicle fleet, reducing the proportion of plug-in hybrids and electric vehicles.

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The number of company cars continues to grow. The latest monitoring report from the National Social Security Office recorded 572,416, marking a 10.9% increase since early 2022. The number of firms offering such cars has also increased. While company cars are exempt from employee social security contributions, employer charges are loosely linked to fuel type and CO₂ emissions.

Meanwhile, Belgium’s mobility budget scheme, which allows workers to exchange their company car for sustainable travel options or mortgage support, is gaining ground. In 2023, nearly 18,400 employees used it, almost double the figure from the previous year.

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