Corporate Car Tax Reform in Belgium: The July 1, 2023 Turning Point and 2025-2026 Rules
Enacted under the Law of November 25, 2021 on the fiscal and social greening of mobility (the Van Peteghem reform), Belgian company car taxation has undergone a historic paradigm shift. At the heart of this reform lies a crucial dividing line: July 1, 2023. Whether your vehicle purchase order was signed before or after this date directly determines your corporate income tax exposure and employer social security liabilities.
1. Why July 1, 2023 is the Decisive Cutoff
In Belgian tax law, the governing date is strictly the date of signature of the purchase order or leasing agreement, and not the date of vehicle delivery or registration with the DIV.
- Ordered prior to July 1, 2023: Grandfathered under the prior tax regime (classic CO₂ formula with a 50% minimum floor and 100% ceiling) for the vehicle's entire corporate holding period.
- Ordered on or after July 1, 2023: Subject to a strict legislative phase-out schedule reducing deductibility on combustion engines to exactly 0% by 2028.
2. Corporate Tax Deductibility Phase-Out Schedule
| Tax Year of Expense | Maximum Statutory Cap | Minimum Floor | Corporate Tax Status |
|---|---|---|---|
| 2024 | 100% (CO₂ formula) | 50% (or 40% if CO₂ > 200g) | Standard deductibility |
| 2025 | Strict 75% cap | Abolished (0%) | At least 25% non-deductible expense |
| 2026 | Strict 50% cap | 0% | At least 50% non-deductible expense |
| 2027 | Strict 25% cap | 0% | At least 75% non-deductible expense |
| 2028 and later | 0% | 0% | 100% non-deductible (fully taxed) |
3. Plug-in Hybrid (PHEV) Restrictions
- 50% Deductibility Cap on Fossil Fuel Costs: For all PHEVs ordered from January 1, 2023 onwards, petrol and diesel expenses are capped at a maximum of 50% deductibility. Electricity used for battery charging remains deductible at the vehicle's general rate.
- General vehicle costs follow the phase-out: For PHEVs ordered on or after July 1, 2023, all lease payments, depreciation, maintenance, and insurance costs follow the combustion phase-out path (75% in 2025, 50% in 2026, 0% in 2028).
4. Full Electric Vehicles (Zero-Emission)
Zero-emission electric vehicles enjoy complete fiscal protection:
- Orders placed up to December 31, 2026: Retain 100% corporate tax deductibility for their full life in the fleet.
- Orders placed in 2027 and beyond: Gradual phase-down schedule begins (95% in 2027, 90% in 2028, 82.5% in 2029, 75% in 2030, 67.5% in 2031).
5. Escalation of Employer Solidarity Contributions (RSZ / ONSS)
Mandatory monthly employer CO₂ solidarity contributions on combustion cars ordered after July 1, 2023 are multiplied by steep penalty multipliers: x 2.75 in 2025, and x 4.00 in 2026.
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