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'Cash for car' incentive cancelled by Belgian court

19:36 26/01/2020

A cash incentive to get workers to give up their company car has been scrapped by Belgium's Constitutional Court.

The "cash for car" scheme aimed to take tens of thousands of company cars off Belgian roads, by offering employees a tax-efficient alternative.

But only 142 people took advantage of the scheme in its first year, according to HR administrator SD Worx, which handles the payroll for 24,000 Belgian companies.

The Constitutional Court judgment comes after a complaint by two trade unions, FGTB and CSC, and the non-profit organisation Inter-Environnement Bruxelles.

They argued that the "cash for car" incentive was discriminatory and had the potential to be misused for tax avoidance purposes as "a form of disguised remuneration".

The "cash for car" incentive gave employees who handed back their company vehicle an annual "mobility allowance" with the same tax and social charges benefits, which could be used to buy a smaller vehicle, an electric bicycle or a public transport pass.

The court said the scheme could remain operational until a revised law was passed - and until 31 December 2020 at the latest.

In 2018, the European Commission told Belgium that it must urgently discourage the use of company cars. The country pays out the most of all the members of the OECD in subsidies for cars.

Written by The Bulletin



What did they expect. The car is a huge status symbol and afaik, the majority of company cars are in price classes way above the pay level of those who receive them. The car costs the employee absolutely nothing. The company pays for all fuel, insurance, maintenance and one-off and annual car taxes. Employees have unlimited, unrestricted business and private use of the car. The number and size of cars driving around would reduce drastically if company cars were no longer allowed. Imo.

Jan 27, 2020 11:43

A company car is one of the few things that goes to making Belgium vaguely competitive on taxation. It redresses the balance for many people between tax and costs of living.
The scheme failed because it simply didn't add up financially.

Jan 27, 2020 11:51