Belgium: Application of VAT to company cars
Provision of company cars by employers to resident employers to be treated as providing car rental services to employees for VAT purposes
Application of VAT to company cars
Belgian Circular 2023/C/72 of 1 September 2023 provides that the provision of company cars by foreign employers to Belgian resident employees is treated as providing car rental services to the employees for value added tax (VAT) purposes and therefore is subject to Belgian VAT.
The provision of company cars by Belgian employers to Belgian resident employers also will be treated as providing car rental services to the employees for VAT purposes if the employee:
- Pays rent to the employer
- Renounces part of his or her gross salary
- Chooses between different types of benefits and has to give up one to be able to benefit from one other
The taxable basis is either the consideration paid by the employee or the normal value (when the consideration is lower than the normal value) which is calculated by reference to the (leasing) rents and costs related to the car, multiplied by the “recovery percentage” and “professional percentage.
Read a September 2023 report prepared by the KPMG member firm in Belgium
Read a September 2023 report prepared by the KPMG member firm in Luxembourg
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