Company cars: the reference CO2 emissions for 2024 have been published!

If you make a company car available to your employees, a taxable benefit arises when they use this car for private purposes. One of the elements to calculate the taxable benefit for 2024, the reference CO2 emissions, is finally known after weeks of negotiations within the federal government. To reach an agreement, it was necessary to tinker with the tax exemption of the bicycle allowance and to introduce a supplementary federal government contribution to the train season ticket.

Flat-rate estimation of the benefit

The benefit in kind for a company car is calculated according to the following formula:

(List price x degressive coefficient) x 6/7 x CO2 percentage

For electric company cars, the CO2 percentage is always 4%. For other company cars, the CO2 percentage is determined on the basis of the so-called reference CO2 emissions.

These reference CO2 emissions are set annually by Royal Decree.

What happened in early 2024?

The reference CO2 emissions for 2024 are determined according to the average CO2 emissions over the period from 1 October 2022 to 30 September 2023 compared to the average CO2 emissions of the reference year 2011. Average CO2 emissions are calculated based on the CO2 emissions of vehicles registered as new.

Until now, only the NEDC values of cars were taken into account when determining reference CO2 emissions. This would cause reference CO2 emissions to drop sharply in 2024, resulting in a significant increase in the benefit in kind for commercial vehicles with diesel, petrol, LPG or natural gas engines (or their hybrid versions).

Therefore, the federal government decided to modernise the determination of reference CO2 emissions from income year 2024. For cars where NEDC emissions are known, the NEDC value is taken into account; for cars where WLTP emissions are known but not NEDC emissions, WLTP emissions are taken into account. For electric cars, 0 emissions are taken into account.

Reference CO2 emissions for 2024

As a result of the new calculation method, the reference CO2 emissions for 2024 are:

• 78 g/km for cars equipped with petrol, LPG or natural gas engines (in 2023: 82 g/km);
• 65g/km for cars equipped with diesel engines (in 2023: 67 g/km).

These reference CO2 emissions are subject to a CO2 basic percentage of 5.5%. If the vehicle's real emissions are higher/lower than the reference CO2 emissions, the basic percentage increases/reduces by 0.1 % per CO2 gram. The CO2 percentage must be at least 4 % and can be a maximum of 18 %.

The new calculation method reduces the reference CO2 emissions compared to 2023. This causes an increase in the taxable benefit in kind for the company car with a combustion engine. However, due to the new calculation method, the decrease is much less significant and consequently the increase in the taxable benefit is also more limited.

And in practical terms?

Taking the example of a company car of type BMW X1, diesel, new, list value € 45,600, CO2 emissions 128 g:

• in 2023 (reference CO2 emissions = 67), the average monthly taxable benefit in kind was € 377 (annual taxable benefit = € 4,533);
• in 2024 (reference emissions = 65), the average monthly taxable benefit in kind (excluding any degressivity of the vehicle's list value) is € 384 (annual taxable benefit = € 4,612).

The limited reduction in reference CO2 emissions, from 67 to 65, also causes a limited increase in the taxable benefit in kind (€ 79 annually).

Compensation measures

To compensate for the new calculation method of reference CO2 emissions, the decision was taken:

• to increase the annual ceiling of the tax exemption for the bicycle commuting allowance from € 2,500 to € 3,500 per year. For more information on the tax exemption, please refer to our Infoflash of 17 January 2024;
• that the federal government awards an additional contribution to employees who commute to work by train but cannot avail of the so-called third-party payer scheme. The condition, however, is that the employer also pays an additional contribution to the cost of the season ticket.

We are closely following the developments of these measures. As soon as we have more practical information, we will let you know.

Sources: Press Release minister of Finance, various press releases.