Tax · Company car · 2026
Company cars: the 2026 tax revolution
Since January 2026, combustion-engine cars bought by a company are no longer deductible. Electric cars remain 100% deductible, but the window starts closing in 2027. Everything a company director needs to know.
Updated on
By the Finances Indépendants editorial team
The 2026 green tax shift: a new landscape
The Act of 25 November 2021 on greening the taxation of mobility overhauled the taxation of company vehicles. From 1 January 2026, cars with CO₂ emissions > 0 g/km bought or leased by a company lose all corporate income tax deductibility: a strict 0%.
For combustion-engine vehicles bought before 1 January 2026, a transitional regime applies, tapering down gradually to 0% in 2028. This makes the choice between buying in 2025 or 2026 critical for companies in a renewal cycle.
Corporate income tax deductibility by powertrain
From 2026, the powertrain entirely determines the tax deductibility of your company car.
2026
2027
2028
2030
Combustion engine (petrol/diesel)
0%
0%
0%
0%
Plug-in hybrid
≤ 75%
0%
0%
0%
Electric (BEV)
100%
95%
90%
75%
For plug-in hybrids (PHEVs) bought in 2026, maximum deductibility is 75%, subject to CO₂ and electric range conditions; from 2027, it is 0%. This is the end of the hybrid era for company cars.
Calculating the car BIK
The car benefit in kind (BIK) is the notional income attributed to the director for private use of a company vehicle. It is taxable under personal income tax at the director's marginal rate.
Annual BIK = Catalogue value × CO₂ coefficient × 6/7 × Age coefficient
where:
• CO₂ coefficient = 5.5% + (actual CO₂ − reference CO₂) × 0.1%
• 2026 reference CO₂: 58 g/km (diesel), 70 g/km (petrol)
• Age coefficient: 100% (0-12 months) → 70% (60+ months)
• Statutory minimum: ~€1,690/year
See also the dedicated BIK page for other benefits (housing, smartphone, internet, heating).
Recoverable VAT and caps
VAT on the purchase or lease of a car can be recovered up to 50% maximum for a mixed-use vehicle (a combination of private and business use, the default case for a company car). For a vehicle with demonstrated 100% business use (a utility van, a vehicle with no private use), VAT is 100% recoverable.
The same rule applies to fuel, servicing and spare parts. To document 100% business use, keep a logbook, an explicit vehicle provision agreement and, ideally, proof of business parking.
Fuel cards and charging points
A fuel card or charging point provided to the director follows the deductibility of the vehicle it is linked to:
- Fuel card for a combustion-engine vehicle in 2026: 0% deductible (it follows the car).
- Charging point for an electric vehicle: 100% deductible (if the car itself is 100% deductible). Electricity provided to the director is neutral for BIK purposes.
- Charging point installed at home: a regional grant may be available (Wallonia, Brussels, Flanders), which can be combined with corporate income tax deductibility.
Worked example: Tesla Model 3 vs BMW 3 Series diesel
Let us compare a Tesla Model 3 (~€50,000 catalogue value) and a BMW 3 Series diesel (~€50,000 catalogue value, 130 g/km CO₂) bought by an SRL/BV in 2026.
Tesla Model 3 BEV
BMW 3 Series diesel
Corporate income tax deductibility 2026
100%
0%
Annual BIK (1st year)
≈ €1,690 (minimum)
≈ €4,800
Recoverable VAT
50%
50%
Net cost over 4 years (estimated)
≈ €28,000 net to the company
≈ €60,000 net to the company
For the same catalogue value, the electric car costs around half as much in net company costs over 4 years, and generates a director's BIK 2-3× lower. The gap is enough to pay for a home charging point and offset any extra purchase cost on some models.
Sources
- Belgian Official Gazette, Act of 25 November 2021, greening the taxation of mobility. View (new tab)(Official source, 2021-11-25)
- 1992 Income Tax Code, Article 36 §2 (BIK) and Art. 198bis (deductibility) of the Income Tax Code. View (new tab)(Official source, 2025)
- FPS Finance, 2025-2026 communications, deductibility of company vehicles. View (new tab)(Official source, 2026)
Company cars 2026
The difference runs into thousands of euros
- 0%
Corporate income tax deductibility, combustion engines 2026+
Act of 25/11/2021 · 2026
- 100%
Deductibility of electric cars in 2026 (then sliding scale)
Act of 25/11/2021 · 2026
- ≈ €1,690
Minimum annual BIK for a company vehicle
Income Tax Code Art. 36 §2 · 2026
Company car FAQ
Frequently asked questions about company cars
For combustion-engine cars (petrol, diesel) bought or leased from 1 January 2026, corporate income tax deductibility is 0%. Combustion-engine vehicles bought before that date keep a transitional sliding scale down to 0% in 2028. Act of 25 November 2021 on greening taxation.
100% deductible from corporate income tax in 2026. Then a sliding scale: 95% in 2027, 90% in 2028, 82.5% in 2029, 75% in 2030, 67.5% in 2031. The optimal tax window to buy or sign a 4-5-year lease is therefore 2026-2027.
Annual BIK = catalogue value × [5.5% + (actual CO₂ − reference CO₂) × 0.1%] × 6/7 × age coefficient. For 2026, reference CO₂ is 58 g/km for diesel and 70 g/km for petrol. Statutory minimum BIK: ~€1,690/year. The age coefficient falls from 100% to 70% after 60 months.
VAT can be recovered up to 50% maximum on mixed-use cars (private + business). For demonstrated 100% business use (a van, a company car not used privately), VAT is 100% recoverable. Document the use with a logbook or a clear agreement.
Yes, 100% from corporate income tax if the associated car is itself deductible (so 100% for an electric vehicle in 2026). The installation may also qualify for regional reductions (Wallonia, Brussels). As for the BIK, providing electricity free of charge to the director is tax-neutral.
Financial or operating leasing remains equivalent to buying in tax terms over the whole contract (expenses deductible at the same rates). Leasing offers predictable budgeting and the flexibility to replace the car regularly. Buying gives you the option of reselling, with a taxable capital gain but cash in hand.
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