The taxation of the company car
Four elements together determine the tax impact of a company car: deductibility for the employer, the benefit in kind for the employee, the CO₂ solidarity contribution and the total cost of ownership. Below is the framework our calculation applies.
Tax deductibility
How far the costs of the car are deductible depends on the drivetrain and the CO₂ emissions. Fully electric cars remain the most favourable, while the deduction for combustion-engine cars is being phased out step by step (ordered from 2026: 0%).
| Drivetrain | Deductibility | Trend |
|---|---|---|
| Electric | 100% | Stable, tapering from order year 2027 |
| Plug-in hybrid | 75% → 50% → 25% → 0% | Falling (phase-out calendar) |
| Diesel / petrol | CO₂ formula, phasing out | Falling sharply |
The percentages are indicative. The exact deduction follows from the gram formula and the order year; our calculation engine is authoritative here.
Benefit in kind
An employee who also uses the car privately is taxed on a benefit in kind (VAA/ATN). It is calculated from the catalogue value, a CO₂ coefficient and an age correction, with a statutory minimum of €1,690 (2026).
Employer CO₂ contribution
On top of the restricted deduction, the employer pays a monthly solidarity contribution to the social security office. It rises with CO₂ emissions (fuel constant: diesel 600, petrol 768, LPG 990) and, for non-electric cars ordered from 1 July 2023, is increased by a multiplier that grows each contribution year (×4 in 2026, ×5.5 from 2027). Fully electric cars fall under the lower base minimum (€33.93 per month in 2026).
Total cost of ownership
The total cost of ownership brings all the elements together: the annual car costs, the non-deductible component (additional corporate tax) and the CO₂ contribution. It is this figure that makes a fair comparison between cars possible.
A lower list price does not automatically mean a lower cost. An electric car with a higher purchase price can still work out cheaper thanks to the full deduction, the low benefit in kind and the low social security contribution.