Tax changes coming up for 'false' hybrid company cars

From 1 January 2020, a higher CO2 emission rate will be taken into account when calculating the taxable benefit of 'false' hybrid company cars. This only applies to vehicles purchased, leased or rented as from 1 January 2018.

Which 'false' hybrid company cars?

The CO2 emission rate of certain hybrid vehicles is much lower than their actual emissions because the vehicle's electric battery has insufficient energy capacity. This is why the legislator decided to adjust the method of calculating the taxable benefit of certain hybrid company cars, more specifically the 'false' hybrid company cars.

This adjustment only applies for:

• plug-in hybrids or rechargeable hybrid vehicles;
• purchased, leased or rented as from 1 January 2018;
• equipped with an electric battery with an energy capacity of less than 0.5 kWh per 100 kilograms of car weight or emitting more than 50 grams of CO2 per kilometre.

Plug-in hybrids or rechargeable hybrid vehicles;

These are passenger cars, dual-use cars and minibuses that run partly on fuel and partly on a rechargeable electric battery. However, the capacity of the electric battery does not allow significant use of the vehicle via this power source.

Full hybrid vehicles are excluded from the scheme. These are vehicles in which the electric battery is charged solely by means of the combustion engine and/or braking energy. In the case of a rechargeable hybrid, on the other hand, the electric battery is recharged by connecting the vehicle to an external power source.

Date of purchase, lease or rental

The adjustment to the method of calculating the taxable benefit only applies to hybrid rechargeable vehicles purchased, leased or rented as from 1 January 2018. Consequently, there are no changes for the hybrid rechargeable vehicles purchased, leased or rented before 1 January 2018.

The date of purchase does not necessarily mean the moment when the taxpayer, usually the employer, becomes the economic owner of the car. The moment on which the car is ordered (but not yet delivered) may also qualify for this.

In the case of a rental or lease car, the date on which the lease or rental contract had been concluded is important.

Energy capacity and car weight

When calculating the energy capacity, it should be rounded up to the higher or lower decimal depending on whether the one-hundredth of the figure reaches 5 or not.

Example:

• 9 kWh/(1845 kg/100 kg) = 0.4878 ... After the round-up we obtain 0.5;

• 8.3 kWh/(1845 kg/100 kg) = 0.4498 ... After the round-down up we obtain 0.4;

In terms of the weight of the car, the vehicle's mass in running order is important. Section 13 of the certificate of conformity states this fact.

How is the taxable benefit calculated from 2020 onwards?

The fixed benefit of a company car is calculated using the following formula: (List price x digressive coefficient) x 6/7 x CO2 percentage

The CO2 emissions of the vehicle also determine the CO2 percentage. Nothing changes with regard to this principle.

However, as from 1 January 2020, the CO2 emissions of the 'false' hybrid company car to be taken into account will be equal to:

• the CO2 emissions of the corresponding vehicle equipped with an engine using only the same fuel (the non-hybrid version of the vehicle);
• or, if no corresponding vehicle exists, the emission condition multiplied by 2.5.

A royal decree will determine the terms and conditions of the corresponding vehicle (the non-hybrid version of the vehicle) in the near future.

Will the CO2 contributions be calculated differently?

At the moment, only the method of calculating the taxable benefit of 'false' hybrid company cars will be adapted from 2020 onwards.

There are no plans to change the CO2 contributions paid by the employer at the moment. We wait and see if this will remain unchanged.

Be prepared!

If you make hybrid company cars available to employees or company managers, you can already check whether any 'false' hybrid company cars are present. Once the terms and conditions have been laid down by royal decree, you will have to check for these vehicles whether or not a non-hybrid version of the vehicle exists in order to ultimately determine the new CO2 emissions.

Partena is closely monitoring this measure and will inform you as soon as there are new developments. So keep a close eye on our Infoflashes!

Sources: Corporation Tax Reform Act of 25 December 2017, Belgian Official Gazette of 29 December 2017; Law of 2 May 2019 containing various tax provisions 2019-I., Belgian Official Gazette of 15 May 2019; Circular 2019/C/56 on the benefits in kind for the personal use of a ‘false’ hybrid car provided free of charge.