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The federal mobility budget, applicable as of the 1st of March 2019, allows an employee to exchange his/her company car for a budget that he/she can spend on various sustainable mobility solutions, including the cash-out of the remaining balance.
Taking into account the spending options offered by the employer, employees can freely spend this budget in the following 3 pillars:
- Pillar 1: eco-friendly company car
- Pillar 2: sustainable means of transportation and housing costs
- Pillar 3: cash
Increased flexibility and broader options since 2022
The federal mobility budget did not have its expected success in the beginning. With some modifications as of the 1st of January 2022 to improve the implementation, the government stimulates more employers and employees to onboard the federal mobility budget. The waiting period for eligible employees has been abolished and the sustainable options to include in pillar 2 have been broadened. Please find more information on this in our previous alert.
Limited roll-out despite simplification and expansion
Figures prove that the federal mobility budget has not (yet) been an attractive alternative for the company car. As a result of the adjustments in effect since 2022, a recent parliamentary question (nr. 1373) was raised to examine the impact of these measures on the popularity of the federal mobility budget.
If we compare the situation pre-entry into force (2021) with the situation after the modifications in 2022, we notice a doubling of the number of employees who stepped into the federal mobility budget: from 3.312 employees in 2021 to 6.025 employees in 2022. Also, the number of employers who implemented the formula within their remuneration policy has increased from 713 to 1.013. These amounts are provided by the NSSO.
Although it concerns an exponential increase in only one year, the usage still remains small-scale in absolute numbers. 6025 employees have opted for the mobility budget, but there are circa 600.000 company cars in Belgium. Therefore, one can conclude that so far only 1% has used the mobility budget as an alternative mobility solution.
|
Income year |
2019 |
2020 |
2021 |
2022 |
|---|---|---|---|---|
|
Number of employees |
179 |
1.0841 |
3.312 |
6.025 |
|
Number of employers |
76 |
322 |
713 |
1.013 |
Vr. En Antw. Kamer 2022-23, 12 mei 2023, nr. 55/111 (Vr. nr. 1373 J. VAN DEN BERGH)
Clear guidelines in terms of budget calculation
On September 29, 2023, the long-awaited Royal Decree was published, outlining the formulas to calculate, on the basis of actual costs or on the basis of lump-sum values, both the amount of spending in pillar 1 and the amount of the mobility budget.
The option to apply a lump-sum formula to calculate the spending in Pillar 1, gives employers a transparent and acceptable means of determining the funds they can allocate to employees for Pillar 2 expenditures, as well as the remaining balance in Pillar 3 after deducting expenses in pillars 1 and 2. Presently, this is causing difficulties for employers who lack complete information to ascertain the actual costs associated with eco-friendly company cars.
For employees, the use of a lump-sum formula provides immediate clarity on the amount available for pillar 2 spending and the expected amount in pillar 3 after deducting expenses from pillars 1 and 2.
Furthermore, the potential adoption of a lump-sum formula for determining the amount of the mobility budget also promises substantial administrative simplification and enhanced legal certainty for all users of the mobility budget.
Let us give a clear overview of the formulas, both on an actual and lump-sum basis, applicable for:
- calculating the amount of spending in pillar 1 (eco-friendly company car);
- calculating the amount of the mobility budget itself.
Income year
Actual cost formula
|
Eco-friendly company car (pillar 1) |
Mobility budget |
|---|---|
|
All actual costs incurred by the employer to finance an eco-friendly company car and related costs under the company car policy. Costs that are not included in the company car policy, cannot be taken into account. The list of costs included in the Royal Decree (see below) is exhaustive. Other costs cannot be considered. If certain costs cannot be determined at the time the mobility budget is initially allocated, the employer will establish the remaining budget in pillars 2 and 3 based on its own estimation. Once the actual costs are known, they must be reconciled within the mobility budget as promptly as feasible. |
Calculated based on an average of the annual gross cost of the company car that the employee renounces. This average shall be calculated over the last four years (or over the entire period if the company car has been provided for less than four years), taking into account all the actual costs listed in the Royal Decree (see below). In case the employee pays an own contribution for the personal use of the company car, this contribution should be deducted from the mobility budget. |
List of actual costs:
- annual depreciation of 20 pct. of the cost price of the eco-friendly company car, taking into account the options and accessories charged and the discounts granted;
- interests on borrowed capital;
- costs of rental or leasing;
- fuel and electricity costs;
- administrative costs related to fuel cards and charging passes;
- annual depreciation of 20 pct. of the cost price of the charging station and its installation;
- maintenance and repair costs of the charging station;
- management costs of the charging station and charging cable;
- toll and parking costs;
- cleaning, maintenance, and repair costs;
- costs of a replacement vehicle;
- vehicle preparation costs;
- costs of replacing, changing, and stocking tires;
- assessment costs when returning the vehicle at the end of the contract or in the event of a change of driver;
- repair costs inventoried upon return of the vehicle at the end of the contract;
- insurance costs (including franchise fees);
- costs of technical inspection;
- service management costs;
- vehicle registration tax;
- road tax;
- employer's (CO2) solidarity contribution in favor of the NSSO;
- non-recoverable VAT on the above-mentioned cost items;
- tax on the non-deductible portion of the above-mentioned items;
- tax on the portion of the benefit in kind that constitutes a disallowed expense.
Please note that the above-mentioned costs can only be included in the calculation to the extent they are not yet included in the rental or lease contract.
Lump-sum cost formula
|
Eco-friendly company car (pillar 1) |
Mobility budget |
|---|---|
|
The lump-sum cost formula differs depending on whether the car is rented or leased, or whether it is owned or financially leased. In both cases, there is a fixed and a variable component to the calculation. The variable component relates to the number of kilometers for commuting, and a number of strictly private kilometers determined on a flat-rate basis. |
The formula that can be used is identical to the one used to calculate the amount of spending in pillar 1. In case the employee pays an own contribution for the personal use of the company car, this contribution should be deducted from the mobility budget. |
Company car that is rented or leased:
Fixed component:
“Annual rental/lease cost + average annual cost of all costs not included in the rental/lease contract (provided they are included in the company car policy) + non-deductible VAT + tax on the non-deductible car costs + (CO2) solidarity contribution”
- The average annual cost is the average annual cost of all costs over the past three years (or the average annual cost over the entire period if the company car has been made available for less than three years).
Variable component:
“+ (6.000 + commuting distance x 2 x 200) x consumption cost per kilometer”*
- 6.000 strictly private kilometers per year and the commuting distance round trip for 200 working days per year.
- The consumption cost per kilometer is set at 30 pct. of the exempt flat-rate kilometer allowance for employees and federal civil servants (since January 1, 2023: 0,4259 EUR/km x 30 pct. = 0,13 EUR/km).
*Provided that fuel costs have not already been factored into the yearly rental or leasing fee.
Company car that is owned or financially leased:
Fixed component:
“Catalogue value (including the tax on the non-deductible portion of the catalogue value) x 25 pct. + (CO2) solidarity contribution”
Variable component:
“ + (6.000 + commuting distance x 2 x 200) x consumption cost per kilometer”
It is important to note that the choice of lump-sum calculation is optional. Employers who do not opt for the lump-sum calculation, are obliged to perform the calculation based on the actual costs as established in this Royal Decree (see list above). The choice to apply the actual cost or the lump-sum formula is valid for a period of three years and should be identical for all employees.
The Royal Decree will be effective as of 1 January 2024.
Conclusion
With the greening of the car fleet in mind, the federal mobility budget will become an interesting option/alternative for both employers and employees, certainly now that there is more clarification on the calculation of the budget. If you would like to receive more information about the federal mobility budget (in general or with regards to the calculation) or wish our assistance in this respect, do not hesitate to reach out to your trusted EY advisors who will direct you to our mobility experts.