What is a company car in Belgium?
A company car is a vehicle the employer makes available for professional and private use. It is one of the most valuable single items in a Belgian package and also one of the least transparent, because it is not free to the employee.
Private use is taxed as a benefit in kind, calculated from the vehicle's catalogue value, its age and its emissions rather than from what the employer actually pays. The employer separately owes a contribution linked to emissions, which is why the fleet policy of most Belgian employers has been shifting towards zero-emission vehicles.
What is the mobility budget?
The mobility budget lets an employee who has a company car, or who is entitled to one, give it up in exchange for a budget of equivalent value. The budget is spent across three pillars.
- An environmentally friendly vehicle, if you still want one
- Sustainable transport and mobility, which also covers housing costs, meaning rent or both the capital and the interest of a mortgage, if you live within ten kilometres of your main place of work or telework at least half the time
- Whatever is left, paid out in cash after a special social security contribution
The pillars are treated very differently, and the second is the one people underestimate. Housing costs are a genuine use of the budget and are exempt from tax and social contributions when the distance or telework condition is met, as the federal mobility budget guidance describes.
How is a mobility budget different from just being paid cash instead of a car?
Because only the third pillar is cash, and it is the only one that carries a charge: the residual balance is paid out subject to a special social security contribution. The first two pillars are what make the arrangement worthwhile, so converting everything into the cash balance mostly gives the advantage away.
This is the single most common misreading of the scheme. A mobility budget is not a car allowance. It is a structured budget with an ordering of preferences built into how each part is treated.
How should you weigh a car against the alternatives?
Start from the benefit in kind you will actually be taxed on rather than from the model, because two cars with similar prices can be taxed very differently. Then ask what your commute really is: if you live close to the office or work mostly from home, the second pillar of a mobility budget can outperform the car comfortably, and it is the only route that turns a mobility entitlement into housing costs.
A flex income plan sometimes offers a third route by letting a car budget be converted into other benefits. See extra-legal benefits for how the pieces fit together, and compare what each of the roles currently open includes.
