Historic ‘coalition’ for green-company-cars-only in Belgium
The federal parliamentary groups of CD&V, Open VLD, and Groen have found a ‘historic’ compromise for a coalition to reform tax benefits for company cars in Belgium, reserving them exclusively for zero-emission vehicles from 2025 on. According to financial newspaper De Tijd, which broke the news, they’re looking for an alternative majority with the socialist parties.
Details about the plan will be given in the federal parliament next week, says Dieter Van Besien (Groen). What is lying on the table? Scrapping the fiscal benefits for all vehicles with an internal combustion engine (ICE), registered after 2025.
Benefits dying out by 2029
Vehicles registered between 2023 and 2025 will keep the tax benefit until 2029 at last before it will die out permanently. Only 100% of zero-emission vehicles will retain the fiscal benefit in the future, so the company car fleet in Belgium that renews typically every four to five years will be completely ‘green’ by 2030.
The deal in the parliament between three major Flemish parties on such a ‘sensitive subject’ as company cars, comes as a surprise, especially with the liberal party on the same line as the green party. Flanders’ largest political party, N-VA isn’t aboard.
They will abstain when it comes to a vote in the parliament, as they want to keep the tax benefit for plug-in hybrids and cars on natural gas as well. MP Wouter Raskin (N-VA) calls the timing ‘unfortunate’, as the economic crisis in the aftermath of corona will be the biggest challenge for companies since the crisis in the thirties of the previous century.
On top of that, the company car in Belgium is often called a ‘salary car’, as it is part of the wage of lots of employees. And for those people, the following years will be ‘difficult enough’, the MP says. And there is the uncertainty of how the corona crisis will affect the roll-out of electric cars and charging infrastructure in the future.
N-VA making U-turn?
It sounds like the N-VA is making a U-turn, as its Flemish Climate Minister, Zuhal Demir, urged the federal minister Marie Christine Marghem (MR) just a few months ago to speed up measures for ‘greening’ the company car fleet to help Flanders meet its climate goals. According to N-VA, they don’t give up their climate ambitions now, but they want “a well-thought and gradual tackling of the problem”.
But after all, the ‘coalition’ won’t need the support of the N-VA, if they can convince the socialist parties, sp.a and PS, to join. And that shouldn’t be too difficult. Sp.a MP Joris Vandenbroucke already stated that the party is fundamentally in favor to make the fleet of company cars in Belgium emission-free.
MR uncertain factor
Paul Magnette, president of the PS, the largest party in the French-speaking part of Belgium, had put the issue already on the agenda of the negotiations for a new federal government in autumn last year.
The liberal party MR, second party on that side of the linguistic border, is an uncertain factor today, De Tijd writes. But with 76 seats in the parliament, a coalition of the green parties, socialists, Christian democrats, and Open Vld could form an alternative majority.
7% more company cars
Last year, companies in Belgium registered a record number of 315 557 new cars. That is almost 22 000, or 7 % more than in 2018. The Belgian company car market exceeded the 300 000-mark for the first time.
The share of company cars in Belgian car sales rose from 53% to 57% last year. This is the fifth increase in a row. In 2019, one-third more new company cars were registered than five years ago. The former Michel government already made the company car less attractive by limiting its deductibility. But that lower deduction has not encouraged companies to offer fewer company cars.
The category of company cars includes cars leased or purchased by companies or the self-employed. The exact number of pure ‘salary cars’, which are not actually needed for carrying out a job but are given as part of the wage, is not clear.