Belgium Changes VAT Deduction Rules

Bart Vanham

By Bart Van­ham, TCOPlus

As of Jan­u­ary 1, 2013, the appli­ca­tion of the deduc­tion rules on (a.o.) cars changed in Bel­gium. Where before 50% of the VAT on cars could be deducted, the deduc­tion is now lim­ited to only the pro­fes­sional use of the car with a max­i­mum of 50%.  The author­i­ties have pro­posed 3 meth­ods to deter­mine the pro­fes­sional use of the car:

  • A kilo­me­ter registration
  • A semi-forfeit method: the pri­vate use is cal­cu­lated based on dis­tance home-work x 2 x 200 days + 6000 km for week­end and hol­i­days com­pared to the total kilo­me­ters dri­ven by the car in a year
  • An optional for­feit method for fleets of more than 4 cars: deduc­tion of 35%

Meth­ods 1 and 2 can be used alter­na­tively, if opted to apply method 3, it is applic­a­ble for all cars for a period of 3 years. This implies that if your com­pany decides to apply the for­feit method, it will add another cost of +/- 1.5 to 2% to the TCO of the fleet.

For fleets with lots of pro­fes­sional kilo­me­ters (sales reps, tech­ni­cians, etc.) it is worth­while to prove the pro­fes­sional kilo­me­ters (gain of +/- 220 EUR/year: 15% (50%-35%) of 21% of 70% of 10000 EUR). Using telem­at­ics for this would add to the busi­ness case of mea­sur­ing and improv­ing dri­ving behavior.

Based on the above we advise you to cal­cu­late the effect for your Bel­gian fleet and take appro­pri­ate mea­sures in order to limit the extra cost. Email Bart Van­ham for more information.