Terms like benefit in kind, catalogue value and fiscal rules can sometimes cause confusion. Alphabet is pleased to explain the key terms for you and to answer some of the most frequently asked questions.
What does Benefit in Kind mean?
A benefit in kind is a benefit that an employer or a company awards free of charge to an employee or director. A company car is an example of a benefit in kind. The benefit in kind is regarded as income from work. An employee or a director who receives such a benefit in kind must therefore pay tax over the amount that corresponds with the value of the benefit.
How is the benefit in kind calculated for the private use of a car provided free of charge?
The flat-rate benefit is calculated by applying a CO2 percentage to 6/7th of the catalogue value of the vehicle provided free of charge.
The formula is:
[catalogue value x correction coefficient x 6/7] x basic CO2 percentage
In Belgium catalogue value is defined as the original market value of the vehicle in new condition at the time of its sale to a private individual, including options and the VAT actually paid, disregarding any discount, reduction, rebate or refund.
The catalogue value is multiplied by a correction coefficient to reflect the period of time elapsing from the date of the first registration of the vehicle.
Period elapsed since first registration of the vehicle (a commenced month counts as a full month)
Percentage of the catalogue value that must be taken into account when calculating the benefit
|From 0 to 12 months||100%|
|From 13 to 24 months||94%|
|From 25 to 36 months||88%|
|From 37 to 48 months||82%|
|From 49 to 60 months||76%|
|From 61 months||70%|
The basic CO2 percentage is 5.5% for a reference CO2 emission.
If the vehicle’s emission is higher than the stated reference emissions, the basic percentage will be increased by 0.1% per CO2 gram, subject to a maximum of 18%. If the vehicle’s emission is lower than the stated reference emissions, the basic percentage will be reduced by 0.1% per CO2 gram, subject to a minimum of 4%.
On January 1st 2015, the reference emission for diesel cars has decreased to 91 gr/km. For vehicles with fuel, LPG or gas motor, the reference emission decreases to 110 gr/km. The Benefit in Kind cannot amount to less than € 1.250 a year (also for electric vehicles). The reference emission for CO2 and the lower limit are reviewed and indexed on a yearly basis.
I want to know the exact amount of the taxable benefit of my company car. Where can I find it?
You can find the annual amount of the benefit in kind applicable to your car on our online Fleet Agent tool.
The Federal Public Service Finance has developed a Web form. You can find it at http://ccff02.minfin.fgov.be/. It allows drivers to request a calculation of their benefit in kind. Important! This calculation requires a lot of details. It is advisable to have your vehicle’s registration certificate and certificate of conformity to hand before you start. The dealer is the person best placed to state the catalogue value (including options) required for the calculation formula and can additionally calculate the benefit in kind.
On which document must the employer or company state the taxable benefit?
The employer or the company must state the taxable amount of the benefit in kind on the individual tax form 281.10 (in the case of an employee) or 281.20 (in the case of a director). The amount will then be included in the taxable remuneration of the person who receives the benefit in kind.
Is the taxable benefit subject to payroll tax?
Yes, the taxable benefit is subject to payroll tax rules.
What happens if the benefit is not provided free of charge?
If the benefit is not provided free to the employee or the director, the personal contribution will be deducted from the taxable amount of the benefit that he obtains.
Do these rules also apply to bicycles, scooters and motorcycles?
There is no benefit in kind if the bicycle or scooter is used solely for professional purposes during the leasing period.
In the case of bicycles, the Belgian Revenue has decided that no benefit in kind needs to be charged (not even for purely private travel) provided that the bicycle is actually used for commuting fully or partly between home and work. However, the Social Security Department has adopted a different line to the Revenue in this matter. So you must still pay social security contributions over purely private use of the bicycle, regardless of whether you use it fully or partly for commuting.
The taxable benefit must be determined for the private use of a scooter or motorcycle provided free of charge. The benefit is subject to payroll tax rules.
Do these rules also apply to smart phones and tablets?
The taxable benefit must be determined for the private use of communication devices provided free of charge. The benefit is subject to payroll tax rules.
What is BIV/TCM?
BIV/TMC is a vehicle registration tax payable once-only to put a car on the road. New rules were introduced on 1 March 2012 for the vehicle registration tax payable for cars registered in the name of natural and legal persons resident in Flanders, except legal persons with leasing activities. Therefore, Alphabet is subject to the old arrangements under which the vehicle registration tax is calculated according to kilowatts and horsepower for taxation purposes. You can work out the vehicle registration tax at https://belastingen.fenb.be
- Website of Federal Public Service Finance
- SD Worx
Alphabet provides this advice based on its own expertise of Full Operational Lease. However, Alphabet is not a tax consultant and declines any and all responsibility for the content and accuracy of this information. The information provided by us is purely by way of a guide and is subject to change at any time without notice. Any decisions or actions that you choose to take on the strength of this information will be for your own account and risk.