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The major shift: from fuel to electric
The reform of car taxation is part of the government’s broader climate objectives. Company cars play an important role in this, as they represent a significant share of the Belgian vehicle fleet.
The core of the reform is simple: only zero-emission vehicles, such as electric vehicles, will remain tax-deductible in the long term.
Cars with a traditional internal combustion engine, as well as hybrids, are being gradually phased out of the tax advantage. This means that choosing a company car today is not only a practical or budgetary decision but also a strategic and fiscal one.
2026: last opportunity for 100% deductibility
For companies investing in an electric company car, 2026 is a key year.
Electric cars ordered no later than 31 December 2026 benefit from:
· 100% tax deductibility
· On all car-related costs (purchase, leasing, maintenance, insurance and electricity)
· For the entire period of use of the vehicle
The latter is essential. The deductibility applicable at the time of ordering remains in force for as long as the vehicle is in use, effectively locking in the tax advantage.
An electric car ordered in 2026 therefore remains 100% deductible, including in the subsequent years. For many companies, this is the perfect time to partially or fully renew their vehicle stock.
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From 2027: gradual reduction of the benefit
From 1 January 2027, the situation changes.
Electric cars will remain deductible but no longer in full. The government is gradually phasing out the tax advantage. The deductibility evolves as follows:
· 2027: 95%
· 2028: 90%
· 2029: 82.5%
· 2030: 75%
· 2031: 67.5%
The same principle applies: the percentage is fixed at the time of purchase and remains applicable throughout the entire period of use.
At first glance, the difference may seem limited but over the longer term it can have a significant impact on the total cost of your car.
Fossil fuel and hybrid cars: no more tax advantages
The changes are even more far-reaching for non-electric cars. For companies, the following applies:
Cars with CO₂ emissions (petrol, diesel and hybrid)
Ordered from 1 January 2026 à 0% tax deductibility
In practical terms, this means that all costs relating to these cars are entirely non-deductible for corporate income tax purposes.
For existing or previously ordered cars, two transitional arrangements still apply:
For vehicles ordered since 1 July 2023, a phase-out scheme applies according to the following schedule:
· 2026: maximum 50% deductible
· 2027: maximum 25%
· 2028: 0%
With the second transitional arrangement, vehicles ordered before 1 July 2023 retain their ‘historical’ tax deductibility unchanged, for the entire period of use.
The message is clear: traditional powertrains are being completely removed from the tax advantage for companies.
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Why timing determines everything today
The reform makes one aspect particularly important: timing. The order date, or of the date the lease contract is signed, determines:
· the percentage of deductibility
· and therefore the total tax cost over several years
Example
· If you order an electric car in December 2026 → 100% deductibility
· If you order the same car in January 2027 → 95% deductibility
That 5% difference may seem small but over the full lifetime it can amount to several thousand euros. For larger fleets, the difference becomes even more significant.
Electromobility: more than just taxation
Although the tax advantages play an important role, the shift to electromobility goes beyond that.
Companies today also take into account:
· sustainability goals
· ESG reporting
· image and employer branding
· access to low-emission zones
Electric cars are increasingly becoming the norm, not only for tax reasons but also in order to remain competitive and future-oriented.
Total cost remains decisive
An important nuance, tax deductibility is only one element of the total cost.
When choosing a company car it is best to also consider:
· purchase or lease price
· energy consumption (electricity versus fuel)
· maintenance costs
· insurance
· residual value
Electric cars often have a higher purchase price but lower running costs.
The combination of lower operating costs and (still) favourable tax treatment makes them attractive for many companies.
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Common mistakes made by business owners
In practice, we see that business owners often fall into the same traps:
1. Waiting too long: postponing can lead to lower deductibility and therefore higher costs.
2. Only considering the purchase price: the total cost of ownership (TCO) is more important than the initial investment.
3. Incorrect timing of the contract: not the delivery date but the order or contract date is decisive.
4. Not taking future policy into account: the rules are largely fixed, anticipating them pays off.
What does this mean for your company?
The impact of this reform varies from one company to the next but the main trends are clear:
· Electric becomes the standard
· Tax advantages are being phased out
· Timing determines your benefit
· Conventional cars are disappearing from the system
For companies with investment plans in mobility this is the moment to make strategic decisions.
Our advice
More than ever, the choice of a company car is both a fiscal and strategic decision. So it is crucial to consider the following factors in good time:
· the composition of your vehicle fleet
· future investments
· the impact on your corporate income tax
· the total cost in the long term
Every situation is different. What is attractive for one company may not be for another. That is why our experts help you make the right choices, tailored to your plans, your budget and the tax reality.
