'Cash for car' incentive cancelled by Belgian court

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.