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At the end of last week, Parliament approved the draft act on mobility allowances, or cash for car. At the same time, the government reached an agreement on the mobility budget. But what is the difference between the two? We will briefly address both topics.
The mobility allowance has been passed by Parliament, so you can start using it soon.
Your employee exchanges his company car for a mobility allowance, hence cash for car. This cash payment is subject to an advantageous tax and social security treatment.
As an employer, you can choose whether or not you want to introduce a mobility allowance system in your company. The condition for this, however, is that you have already been providing company cars for private use for three years. It is up to you whether you offer this option to all employees with a company car or only to a specific group
Your employee then chooses whether or not to exchange his company car. In other words, you cannot oblige him to do so. An additional condition for your employee is that he has had a company car at his disposal for twelve months in the past three years, of which at least three months must be before the exchange application.
The mobility allowance is calculated as follows: list price of the exchanged company car x 20% x 6/7.
Will you bear all or part of the cost of fuel? In that case, the percentage is 24%. Did your employee pay a personal contribution for the company car? In that case, the amount of the mobility allowance will decrease.
You will pay a solidarity contribution on the amount of the mobility allowance that is equal to the amount of the solidarity contribution of the exchanged company car.
Your employee will pay taxes on a part of the mobility allowance calculated according to the following formula: list price x 6/7 x 4%. The remaining part of the mobility allowance is exempt from tax.
The political agreement has yet to be translated into legislative texts, but we already indicate the broad lines today. Please note that this agreement is still subject to amendment.
Your employee exchanges his company car and for this, he receives a mobility budget.
Budget can also be created if the employee opts for a more environmentally friendly company car.
The employee uses this budget to finance his means for sustainable transport. In other words, he can freely choose how he spends this budget on mobility. What this sustainable transport means is still to be determined by Royal Decree.
Anyone who has not used up his mobility budget by the end of the year will be paid the remaining amount.
As with the mobility allowance, it is up to you to decide whether or not to introduce a mobility budget. Your employee freely chooses whether he wishes to participate.
For which employees? Only for an employee who has had a company car for 12 months in the past three years, of which at least three months must be before the application. But also an employee who is entitled to a company car but has not exercise that right, is entitled to the mobility budget. He must have already had that right for at least twelve months in the last three years, of which at least three months must be before the application.
The amount of the budget is equal to the total cost on an annual basis that you bear for financing the company car and all related costs (fuel, insurance, maintenance, taxes, etc.).
Does the employee opt for a more environmentally friendly company car? In that case, the normal rules apply. You pay a solidarity contribution and the employee pays taxes on the benefit of the company car.
Does the employee use the budget to finance sustainable transport? In that case, these amounts will be completely exempt from social security contributions and tax.
Does the employee still receive a cash amount at the end of the year? In that case, you will have to pay an employer's contribution of 25%. The employee pays a personal contribution of 13.07%. The cash amount is also exempt from tax.
Managing the mobility budget is becoming a complex matter. Each individual employee will use the mobility budget in a different way. An efficient tool will be crucial to manage this complex multiplicity of information. Think of a tool similar to a cafeteria plan tool. User-friendly for the employee and offering a link to the payroll processing.
Sources: Press release Council of Minister of 16 March 2018, Message FEB.
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