Changes to the tax on company cars

Newsletter - November 2017

The tax on company cars has been altered both by the 2017 social security financing law and by the amending finance law for 2016.

What is tax on company cars?

The tax was created in 2006 and replaced the tax on passenger and company cars introduced in 1974. Based on two criteria – CO2 emissions and the type of fuel on which the vehicle runs -, this tax is calculated on a progressive scale (available on and depending on the date the relevant vehicles first came into service.

The tax applies to all companies that own or use company cars, regardless of their juridical form or their regime of taxation. However, it does not apply to associations governed by the 1901 law and non-profit organisations. The relevant vehicles are easily to identify as the registration document is marked VP (private vehicle). Vehicles designed exclusively for a commercial or industrial activity are thus excluded. Hybrid and electric cars benefit from certain exonerating measures.

A change of periodicity for 2018

Until now, the taxation period for tax on company cars ran from 1 October of year N to 30 September of year N+1. Starting in 2018, the taxation period will be same as the calendar year, i.e. from 1 January to 31 December of year N. However, provision is made for a simplified transition, to avoid companies submitting two declarations for the year in progress. So payment of the tax due by 30 September 2017 is deferred to January 2018.

Recap schedule

– November 2017: no declaration or payment of tax.

– January 2018: declaration and payment of tax on company cars for the period running from 1 October 2016 to 31 December 2017.

– January 2019: declaration and payment for the period running from 1 January to 31 December 2018.

New VAT-linked declaration and payment methods

The declaration of the tax on company cars is simplified and will depend on a company’s VAT regime. There are two different situations:

– In the case of a company with a normal VAT regime or a company not registered for VAT: using annex 3310A to the VAT declaration, it must declare and pay the tax electronically by a deadline set between 15 and 24 January of year N+1.

– In the case of a company with a simplified VAT regime: it must declare and pay the tax by completing the paper form 2855-SD by 15 January of year N+1 at the latest. The electronic procedure does not exist for this form.

We are entirely available if you have any further queries about the issues discussed in this newsletter or about any other accounting, tax, social security or law related topic.

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