Increase in solidarity contribution for company cars
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When employees are allowed to use their company car for private purposes, the employer has to pay a CO2 solidarity contribution to the NSSO. As part of the “greening” of the vehicle fleet, this “CO2 contribution” will be increased as of 1 July 2023. Additionally, the tax deductibility of company cars will be reduced (for fully electric vehicles) and phased out (for cars with a combustion engine).
We will discuss the increase in the solidarity contribution for company cars ordered as from 1 July 2023 in this newsletter.
How is the solidarity contribution calculated now?
A formula is used to calculate how much the solidarity contribution amounts to. This formula differs depending on the fuel type of the vehicle.
The amount is then multiplied by the indexation coefficient, since an indexation takes place on 1 January of each year. The indexation coefficient for 2023 is equal to 1.5046.
The calculation looks as follows for the year 2023:
- Diesel cars: [[(CO2 emission rate x € 9) – 600] / 12] x 1.5046;
- Petrol cars: [[(CO2 emission rate x € 9) – 768] / 12] x 1.5046;
- Gas-powered cars (LPG, CNG or methane): [[(CO2 emission rate x € 9) – 990] / 12] x 1.5046.
The minimum solidarity contribution is currently € 20.83 (indexed: € 31.34).
For electric cars, the minimum solidarity contribution is multiplied by the indexation coefficient. For the year 2023, this amounts to € 20.83 x 1.5046 = € 31.34.
What happens as of 1 July 2023?
A higher solidarity contribution will have to be paid on company cars purchased, rented or leased as from 1 July 2023. The order date mentioned on the order form is decisive. In case of leasing/rental, the date of the lease/rental agreement is decisive. The result of the calculation according to the abovementioned formula will be multiplied by a factor. This factor will increase as follows:
- Multiplication by factor 2.25 from 1 July 2023 to 31 December 2024;
- Multiplication by factor 2.75 from 1 January 2025 to 31 December 2025;
- Multiplication by factor 4.00 from 1 January 2026 to 31 December 2026;
- Multiplication by factor 5.50 from 1 January 2027.
Increased minimum contribution from 1 January 2025
The minimum solidarity contribution will also be increased. This increase will only take effect from 1 January 2025.
It is a non-indexed amount, with a minimum of:
- € 23.41 from 1 January 2025;
- € 25.99 from 1 January 2026;
- € 28.57 from 1 January 2027;
- € 31.15 from 1 January 2028.
These amounts are therefore yet to be indexed as indexation is not yet available for these dates in the future.
Exception for electric company cars
For electrically powered cars, the solidarity contribution is still calculated according to the abovementioned formula, without multiplying by a factor.
The minimum solidarity contribution does apply to electric cars, with the same minimum amounts as for non-electric cars.
The impact of this change is therefore quite limited for electric company cars and only noticeable as from 1 January 2025. For other types of company cars, the increase will already have an impact for company cars ordered starting from 1 July 2023.
Action point
! Provide your Payroll Business Partner with the date of the order form or the date of the lease agreement (if it is a lease) when you assign your employee a company car. This is essential for accurate payroll processing.
