Tax
Company car
By the Finances Indépendants editorial teamUpdated on 3 min readAlso known as: Voiture de société, Business car
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Contents
Two effects never to be confused
A company car has two independent tax consequences. For the director, a benefit in kind (BIK) is added to their taxable remuneration. For the company, the vehicle's costs are deductible at a percentage that depends on its powertrain and year of acquisition.
A decision is made by looking at both together. A vehicle with very low deductibility but a modest BIK can cost more than another, and vice versa: only the total counts.
How the BIK is calculated
The official formula is as follows: BIK = catalogue value × [5.5% + (CO₂ − reference emissions) × 0.1%] × 6/7 × age coefficient
The CO₂ reference level is revised every year and stands at 58 g for diesel and 70 g for petrol in 2026. The further emissions exceed this level, the higher the benefit. A floor of €1,690 per year applies in all cases.
The age coefficient reduces the benefit as the vehicle gets older, from 100% in the first year to 70% after five years. A vehicle kept for a long time therefore gradually becomes cheaper for the director.
Deductibility for the company since 2026
This is the major change brought by the greening of company car taxation. For vehicles with emissions bought from 2026 onwards, the rule is now: 0% for cars emitting CO₂ acquired (ordered) from 1 January 2026, under the Act of 25 November 2021.
Electric cars keep a favourable but tapering regime: 100% in 2026, 90% in 2028, 75% in 2030 and 67.5% in 2031. The applicable rate is in principle fixed by the year of acquisition, which makes the purchase date decisive.
Hybrids fall under a transitional regime: a tapering transitional regime for plug-in hybrids ordered before 2026, capped and then phased out.
Company car or mileage allowance
For limited business use, a flat-rate mileage allowance paid by the company to a director who uses their private vehicle is often simpler and more efficient: no BIK, and no question of the vehicle's deductibility.
The company car comes out ahead when mileage is high, when the vehicle would be bought anyway, and when going electric keeps substantial deductibility. The calculation is made on the full cost, BIK and corporate income tax included, never on the lease payment alone.
Not to be confused with
The terms close to Company car and what sets them apart.
- Company car and the mileage allowance
- The allowance reimburses business use of a private vehicle, with no BIK and no question of the vehicle's deductibility. A company car puts the asset at the director's disposal and triggers both mechanisms.
- Company car and BIKs in general
- Most BIKs follow a flat rate. The car follows a formula that depends on catalogue value, CO₂ and age, which makes it far more variable.
Further reading
Company car: frequently asked questions
Not for a vehicle with emissions bought from 2026 onwards: 0% for cars emitting CO₂ acquired (ordered) from 1 January 2026, under the Act of 25 November 2021. Vehicles acquired earlier keep the regime of their year of acquisition.
100% for an acquisition in 2026, then a tapering rate depending on the year: 90% in 2028, 75% in 2030, 67.5% in 2031. The rate is in principle fixed at acquisition.
BIK = catalogue value × [5.5% + (CO₂ − reference emissions) × 0.1%] × 6/7 × age coefficient The CO₂ reference level is 58 g for diesel and 70 g for petrol in 2026, with a floor of €1,690 per year.
Yes. An age coefficient reduces the benefit in steps, from 100% in the first year to 70% after five years. Keeping the vehicle therefore gradually lightens the director's tax burden.
The allowance is often preferable for limited business use, since it avoids the BIK and the question of deductibility. The company car regains the advantage at high mileage, especially an electric one. The calculation is made on the full cost.
Yes, the contribution the director actually pays to the company is deducted from the taxable benefit, though it cannot make it negative. The payment must be real and traceable.
Official source
- FPS Finance, company car. View (new tab)(Official source, accessed on 2026-09-19)