SD Worx: ‘Tax increases slightly for fossil company cars’

The tax on the private use of a diesel or gasoline company car – the so-called taxable ‘benefit in kind’, (Voordeel Alle Aard, VAA – will increase in 2025. According to human resources service provider SD Worx, a few euros are added monthly. You ‘get’ a car from work but must pay taxes on its private use.

The CO2 reference emissions for 2025 were published on Thursday in the Bulletin of Acts. In 2025, employers and employees will pay more for their private use of fossil fuel ‘company cars’. The price has already increased by 40 percent in six years. The calculation of this tax is complex and takes into account CO2 emissions,  fuel type,  list price, and age of the car. 

More electric cars

The CO2 reference emissions are necessary to calculate the taxable ‘benefit in kind’ linked to the private use of a company car made available by a company or employer. This private use is calculated based on the average CO2 emissions of the newly registered cars. The higher the CO2 emissions, the higher the tax.

“The reference emissions are falling again, which is not surprising given the strong sales growth of electric cars,” explains Veerle Michiels, mobility expert at human resources service provider SD Worx

Specific formula

“For diesel cars, the reference emissions drop from 65 grams to 59 grams per kilometer, and for vehicles with gasoline, LPG, or natural gas engines, they decline from 78 grams to 71. A decrease in the reference emissions means an increase in the taxable benefit in kind.” For the employer, the associated expenses will also increase.

Since 2012, the ‘benefit in kind’ for the private use of a company car has been calculated based on a specific formula. A CO2 coefficient is applied to 6/7th of the car’s catalog value and then adjusted depending on the car’s age. The older the car, the lower the ‘benefit in kind’.

Electric cars are also taxed

For the 2025 income year, the basic CO2 coefficient is 5.5% for a reference emission of 59 g/km for diesel vehicles and 71 g/km for cars with a gasoline, LPG, or natural gas engine. If the CO2 emissions are higher than the reference emissions, the coefficient increases by 0.1% per gram of CO₂. The coefficient decreases by 0.1% per gram of CO if they are lower.

Today, 214,725 company cars are already electric, while fossil fuels still power 585,000. This is evident from figures from the automotive federation Febiac. To be clear, electric vehicles are also taxed, even if they do not emit CO2. They are subject to a minimum coefficient.