What level of CO2 emissions for company vehicles?

Since 1 September 2018, the level of CO2 emissions for new vehicles has been determined based on the “Worldwide harmonized Light vehicles Test Procedure” (WLTP) method.

In fact, the European Commission has made this new method for determining CO2 emissions on car manufacturers obligatory, with the aim of replacing the old NEDC (New European Driving Cycle) method.

However, until 31 December 2021, car manufacturers will be required to mention two values on the official vehicle documents: the level of CO2 emissions determined based on the new WLTP standard and a conversion into the value under the NEDC (NEDC 2.0).

Tax impact of the new WLTP standard

The CO2 emissions of the vehicle determine the CO2 percentage that is taken into account in the formula for calculating the benefit in kind resulting from the provision of a company vehicle for personal use (i.e. catalogue value X degressivity coefficient X 6/7 X CO2 percentage).

What CO2 emissions should be taken into account when determining the taxable benefit in kind (BIK)? Is it the CO2 emissions indicated on the vehicle registration certificate or those indicated on the certificate of conformity?

Vehicles with a single level of CO2 emissions (NEDC)

To determine the taxable BIK, the level of emissions that has to be taken into account is that recognised by the Belgian Vehicle Registration Authority (DIV).

These data are, in principle, indicated both on the certificate of conformity (“combined, weighted” CO2 value for plug-in electric vehicles; “combined” CO2 value for other types of engines) and on the vehicle registration certificate.

Vehicles with two levels of CO2 emissions (WLTP and NEDC)

Checking the certificate of conformity will determine whether a vehicle has two levels of CO2 emissions (WLTP and NEDC). A certificate of conformity with two levels of CO2 emissions includes both a table (code 49.1) with the NEDC values and a table (code 49.4) with the WLTP values. However, the registration certificate only mentions one value and does not specify whether it is the NEDC or WLTP value.

For vehicles with two levels of CO2 emissions (WLTP and NEDC), the NEDC value can be taken into account up to and including 31 December 2020 for calculating the BIK.

The NEDC value must be that recognised by the DIV. In principle, the NEDC value corresponds to the NEDC value mentioned in the table (code 49.1) on the certificate of conformity (“combined, weighted” CO2 value for plug-in electric vehicles; “combined” CO2 value for other types of engines).

From 2021, the NEDC value will be replaced by the corresponding WLTP value.

In the two scenarios mentioned above, where the certificate of conformity mentions a level of CO2 emissions but the registration certificate does not and the DIV does not have any information relating to CO2 emissions, the level of CO2 emissions for calculation of the BIK must be determined as follows:

If the vehicle has a petrol, LPG or natural gas engine, it is treated as a vehicle with CO2 emissions of 205 g/km;

If the vehicle has a diesel engine, it is treated as a vehicle with CO2 emissions of 195 g/km.

Social security impact of the new WLTP standard

The creation of this new standard also has an impact on the calculation of social security contributions.

Indeed, the Belgian National Office for Social Security’s CO2 contribution is based on the level of CO2 emissions in g/km.

This solidarity contribution is due by an employer when it provides (directly or indirectly) its employee with a company vehicle (type M1 or N1) that the employee can use for his or her personal use or for travel from home to the workplace.

By way of reminder, this monthly contribution is calculated by applying the following formula:

From 1 January 2019, the amount of the CO2 contribution may under no circumstances be less than €26.97 for vehicles other than electric vehicles.

As mentioned previously, only one level of CO2 emissions is mentioned on the registration certificate: the NEDC value or WLTP value, depending on the vehicle registration date.

During a transitional period running up to the end of 2020, the Belgian National Office for Social Security specifies that the NEDC value mentioned in the table (code 49.1) on the certificate of conformity must be used. Until this date, the WLTP value (code 49.4) must not be taken into account.

If no CO2 emissions data are available (with the exception of M1 category vehicles, which are converted into N1 category vehicles for which the level of CO2 emissions is calculated as if they belonged to the M1 category), the CO2 contribution must be calculated using the following levels:

Petrol vehicles: emissions of 182g/km

Diesel vehicles: emissions of 165 g/km

Sources: Company Cars FAQ (available in French and Dutch at https://finances.belgium.be), NOSS Administrative Instructions Q1/2019