Company cars and fuel cards: new rules will cost companies money

Until last year companies that provided their general manager and/or personnel with a company car had to present 17% of the amount as non-deductible expenses. From 2017, they will have to state 40% of the amount as non-deductible in cases where the company pays all or some of the fuel costs, for example if the car of the employee/general manager comes with a fuel card. The Programme Act of 25 December 2016 introduced this new rule.

Company car treated as benefit in kind

A company car provided to employees and general managers is treated as a taxable benefit in kind. A special formula is applied to calculate the value of the benefit: catalogue value x age correction x CO2 percentage x 6/7. This does not change if the employee also receives a fuel card. The benefit represented by the fuel card is already incorporated in the benefit of the car as a whole.

It does impact on the employer, however, because it must state 17% of the benefit in kind of the car as a non-deductible expense.

From 2017: 40% of the benefit treated as non-deductible expense

What is new from 2017 is that the company must state 40% of the benefit as a non-deductible expense if the company pays all or some of the fuel costs. This may occur when the company provides the employee or general manager with a fuel card, for example. But the same applies if the employer reimburses the fuel costs on submission of an expense claim.

Personal contribution not charged.

There is another far-reaching change applicable to all company cars, regardless of whether they come with a fuel card.
From now on the 17% or 40% of the benefit in kind that must be presented as a non-deductible expense will be calculated at the complete value of the benefit. The personal contribution paid by the employee or general manager can no longer be deducted.
For employees, however, nothing will change.

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