‘Cash for car’ to be corrected with ‘mobility card’
Belgian government intends to put through its ‘cash for car’ plan in a few weeks, but will add a ‘mobility budget’ in the form of a ‘mobility card’ as a correction later, to comply with the propositions of employers and unions.
400.000 salary cars
The government wants to do something about the growing number of so-called ‘salary cars’, company cars that are allocated to employees as part of their wage, but barely taxed for the employer. The latter has become a sensitive social debate ‘being death already’, affecting some 400.000 people with a company car in Belgium today.
Didier Reynders’ plan
The initial plan of Didier Reynders (MR), Minister of Foreign Affairs today but at the origin of the favourable tax benefits for company cars in the year 2000 as Minister of Finance in those days, is to give the employee a tax-free amount of ‘cash’ money representing the leasing value of his company car.
Typically this is an amount between 600 and 800 euro a month if the employee is willing to trade in his company car, minus the ‘benefits in kind’ he has to pay today. But there are some drawbacks. The State’s Council for instance says this measure is discriminating, doesn’t do anything to improve the environment by asking for durable alternatives.
Attractive mobility budget
And it doesn’t take into account the advice of the social partners, being employers and unions. The latter, being united in the National Advice Council on Labour (CNT/NAR) did their own proposition in September 2017, putting forward a more attractive ‘mobility budget’ that the employee could spend independently on ‘sustainable alternatives’ for his daily mobility needs.
Details are still being discussed by CNT/NAR, but the headlines are approved by the Michel government to be added to the ‘cash for car’ law afterwards. Adding it afterwards by a ‘correction’ on the new law by the parliament ‘is the fastest way to do it’, according to insiders.
Two options remain
Concrete two options will remain for the employee: the (partly or fully) conversion of his ‘salary car’ into cash or a ‘mobility budget’ in the form of a ‘mobility card’, dedicated to transport means and a durable mobility. The exception that ‘this cash for car’ only was to be given to employees already having a company car for more than one year, has been dropped.
The mobility budget can be attributed by the employer yearly or periodically on a mobility ‘credit card’ that is to be used for public commuting transport like train, tram, metro and buses, but also sharing systems for cars, scooters and bikes, bicycle maintenance, taxis or even rental cars abroad when on holiday.
Rest in cash
If at the end of the year the mobility budget isn’t fully used up, the rest can be given in cash. But this cash money would be taxed in a normal way, to make the difference less painful to the ones not having the right to a company car or mobility budget. They would be granted to claim their mobility expenses tax free.