CO₂ Tax on Company Cars: Understand, Calculate and Reduce Your Cost
In 2026, Belgian regions are stepping up their environmental policies to encourage the use of vehicles that emit less CO₂. For employers, this means a specific CO₂ tax on company cars made available for private use – a mandatory cost that can, however, be optimised with the right strategy.
Discover how the CO₂ tax works, how it is calculated, who it applies to, and how choosing more sustainable financing and vehicles can reduce the total cost of your company car fleet.
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Belgian regions continue to encourage lower-emission vehicles through targeted measures:
- Wallonia: eco-bonus or eco-malus depending on the vehicle’s CO₂ emissions.
- Flanders: registration tax (TMC) based on CO₂ emissions, fuel type and Euro standard.
What is the CO₂ tax on company cars?
The CO₂ tax is a specific contribution that every employer must pay for each vehicle made available to an employee for non-professional (private) use. It is a flat-rate social contribution linked to the car’s CO₂ emissions and fuel type, and it is paid to the National Social Security Office (ONSS) in the same way as other social security contributions for employees.
This contribution is 100% tax-deductible for the employer, but it still represents a recurring cost per vehicle. Understanding this mechanism is essential when you choose between different vehicle types or financing solutions for your company car fleet.
The CO₂ tax applies to cars, minibuses, mixed-use vehicles and utility vehicles owned by companies. However, self-employed workers, company directors and liberal professions who use a vehicle in their own name are generally not directly affected by this specific CO₂ tax mechanism, even though they are still impacted by other tax and environmental measures related to vehicle use.
Who pays the CO₂ tax?
Payer: The employer providing a vehicle for private use.
Beneficiary: ONSS (National Social Security Office).
Deductibility: 100% deductible as a professional expense.
How is the CO₂ tax calculated?
The CO₂ tax is a flat-rate amount that depends mainly on two parameters: the fuel type and the CO₂ emissions (g/km) of the car. These elements are combined in a specific formula defined by the authorities. If the official CO₂ value is not known, a standard value is automatically applied: 165 g/km for diesel engines and 182 g/km for petrol engines.
The calculation formulas are relatively technical and complex, and an error can lead to underpayment or overpayment. For this reason, it is crucial to rely on up‑to‑date official tables or to ask for support from a specialist when you structure or renew your company car fleet.
In the event of unpaid or incorrectly paid CO₂ tax, the financial impact can be significant. The penalty is set at double the unpaid tax, plus a 10% surcharge, to which an additional 7% annual interest is added. Anticipating and correctly calculating this contribution therefore helps you avoid heavy regularisations and protect your company’s cash flow.
Key factors impacting your CO₂ tax
Choosing low‑emission or electrified vehicles and an adapted financing solution can significantly reduce the CO₂ tax burden over the life of the vehicle.
How can you avoid or limit the CO₂ tax?
The CO₂ tax only applies when the vehicle is used for private purposes by the employee (for example, commuting or personal trips). It is therefore up to the employer to prove that there is no private use if they want to avoid this contribution for a given vehicle. This may be the case for service vehicles that return every evening to the company’s depot or garage and are not made available to employees outside working hours.
The same principle applies to a worker who uses a car as an independent manager or who is employed under a PFI contract, provided that the conditions of use do not qualify as private use. Clear internal car policies and precise trip records help support this position in the event of an inspection.
Beyond the strict question of applicability, the most effective way to limit your total CO₂ tax cost is to review your mobility and financing strategy: favouring cleaner vehicles, optimising the size of your fleet, and choosing the right type of credit or leasing to spread and control your costs over time.
Vehicles not subject to CO₂ tax
A company vehicle is generally not subject to the CO₂ tax if it is strictly limited to professional use and systematically kept on company premises outside working hours. Proper documentation is essential to justify this exemption.
Optimise cost through financing choices
By combining the right vehicle profile with an adapted financing solution, you can reduce not only the CO₂ tax but also fuel, maintenance and depreciation costs, improving the total cost of ownership of each vehicle in your fleet.
Why plan your company car financing with CO₂ tax in mind?
Control your monthly budget
By anticipating the CO₂ tax when you choose your vehicles and financing, you can better estimate and stabilise your monthly mobility budget, without unpleasant surprises linked to penalties or adjustments.
Improve your environmental footprint
Choosing lower‑emission vehicles often means lower CO₂ tax, while reinforcing a positive environmental image for your company among your employees, partners and clients.
Stay compliant and avoid penalties
A clear strategy for your vehicle fleet and its financing helps you comply with current social and tax rules, reducing the risk of costly penalties related to underpaid or unpaid CO₂ tax.
Plan your next company car with the CO₂ tax under control
Before investing in a new company vehicle or renewing your fleet, integrate the impact of the CO₂ tax into your decision. An adapted financing solution, combined with a carefully chosen vehicle, can make a real difference to your overall budget in 2026 and beyond.
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