Mobility allowance: changes as from 01 March 2019

Less than a year after the publication in the Belgian Official Gazette of the law introducing the mobility allowance (“cash for car”), the government is adapting the legislation. We will briefly address the most important changes. The changes are final, but the act must still be published. Thanks to Partena Professional you already know what to expect.

Context

With the mobility allowance, an employee can exchange his company car for a mobility allowance. This allowance is subject to an advantageous tax and social security treatment.

The employer can choose whether or not to introduce a mobility allowance system. A prerequisite is that he has been granting his employees company cars for private use for three years.

The employee is also free to choose whether or not to hand in his company car. An additional prerequisite for the employee is that he must have had a company car at his disposal for at least twelve months in the course of the last three years and during three consecutive months prior to the application for the mobility allowance.

Wider application

Entitlement to a company car

The employee who does not actually have a company car but who is entitled to it, will be given the opportunity as from 1 March 2019 to apply for a mobility allowance.

Is entitled to a company car: the employee who belongs to a job category for which the employer's company car policy provides for a company car.

Also for this employee it is required that he must have been entitled to a company car for at least twelve months in the past three years and during three consecutive months prior to the application for the mobility allowance.

Recruitment, promotion or job change

At the recruitment, it suffices that the employee is entitled to a company car for him to be able to apply for a mobility allowance. There are therefore no minimum periods applicable.

Also in the event of a promotion or job change of the employee that took place before 1 March 2019, the employer does not have to prove that the employee already had a company car. If the promotion or job change only takes place after 1 March 2019, the minimum periods must be observed.

Abolition of the company car certificate

In the event of a change of employer, the company car or the mobility allowance that was granted with the previous employer is no longer taken into account to assess whether a mobility allowance can be granted with the new employer.

Because of this, the company car certificate loses its usefulness and will be abolished as from 1 March 2019. Attention, the act must still be published.

Extent of the mobility allowance

The mobility allowance is calculated as follows: list price of the exchanged company car or the company car to which the employee is entitled x 20% x 6/7.

If the employer bears all or part of the fuel costs, the percentage is 24%. If the employee paid a personal contribution for the company car, the amount of the mobility allowance decreases with this personal contribution.

The list value on which the mobility allowance is calculated is indexed annually.

Change of job or promotion

From 1 March 2019, a job change or promotion that causes the employee to belong to a job category for which the employer's wage system provides for a higher or lower company car can lead to an increase or decrease in the mobility allowance.

Tax incentive

The employee pays taxes on a part of the mobility allowance calculated according to the following formula: list price x 6/7 x 4% (with a minimum of 1,340 EUR in 2019)... The remaining part of the mobility allowance is exempt from tax.

Private contribution

If the employee paid a personal contribution for his company car that he exchanged, this will be taken into account from 1 March 2019 for determining the tax benefit. The contribution paid during the last month before exchanging the company car is converted to an annual amount and deducted from the annual taxable benefit of the mobility allowance.

Source: Draft law amending certain provisions concerning the mobility allowance, Doc.parl. Chamber 2018-2019, no. 3382.