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EU Urban Mobility Observatory
  • News article
  • 10 December 2018
  • 2 min read

Belgium introduces further alternatives to the company car

The Belgian federal government is taking action to provide alternatives for those employees that currently use company cars. Two initiatives, the Mobility Budget and the Mobility Allowance, have been designed to offer employees alternatives to the company car, including by supporting the use of other modes of transport or cleaner cars.

From 1 January 2019, employees will be able to make use of the option of the Mobility Budget. This will offer employees three alternatives to a conventional company car. The first is to replace their existing car with a cleaner car, which meets the latest EURO standards (i.e. Euro 6) and has a maximum CO2 emissions of 95 g/km. The new car must not exceed the emission levels of the employee's previous car. Requiring stricter standards would be difficult as less than 5% of the cars for sale in the country have very low levels of emissions.

The second alternative is for employees to trade the company car for a tax-free budget to use on more sustainable modes of transport. The budget can be spent on a range of alternatives, including buying and maintaining bicycles, electric bicycles, mopeds and e-motorbikes, public transport use, car sharing, bike sharing and other sharing services, as well as renting vehicles for up to 30 days a year. Additionally, the budget can be used to cover housing costs such as rents or interest on loans, if the employee lives within a 5 km radius of their main employment location. A company can provide a bicycle allowance and provide bicycles to employees out of the budget. The third alternative is a cash-out option that equals the cash balance of the cost of the company car. This is paid to the employee without taxes, but with a 38 % social security payment.

The Mobility Budget is a voluntary action for both employers and employees and needs an active opt-in. It applies to employees with certain conditions. These include that the employee has had a company car for at least 12 months during the past 3 years with at least 3 months falling in the period directly before the application for the Budget. The company in turn needs to have offered company cars for at least 3 years.

Back in March 2018, the Belgian federal government introduced the Mobility Allowance. This is a simple “cash for car” model paid out monthly to employees who trade in their company car. It works with the same conditions as the Mobility Budget. Cash paid out per year is 17 % of the car’s list price or 21 % if the use of the company car included a fuel card. Opting for the Allowance has no effect on the employer's social security payments relating to the employee, as these are the same as if the employee had retained the company car. Employees are able to use the cash received as they wish.

To date, the uptake of the Mobility Allowance has not been that extensive; there are higher expectations for the Mobility Budget.

Story first published by www.fleeteurope.com on 1st of December 2018.

Sources

Details

Publication date
10 December 2018
Topic
  • Policy and research
Country
  • Belgium