Buying and leasing a company car in Belgium: a guide for new entrepreneurs

A car to meet your prospects. A motorbike, e-scooter or electric bike to get around town easily and visit your customers. A van or other commercial vehicle to transport your goods or get to a construction site.

Beyond the brand and model, your choice of business vehicle will inevitably depend on your line of work. But whatever your situation, you’ll also need to decide how to finance this considerable investment, taking into account your budget and the tax implications of company vehicles.

Buying your vehicle: with or without a loan?

Buying your first business vehicle? This allows you to become the legal owner. But it also requires sufficient funds of your own, which is not always easy for a new business.

You may therefore need to take out a business car loan, allowing you to spread the cost over time.

Bear in mind that buying the vehicle also means paying the VAT upfront (which is generally partially recoverable) in a single payment at the time of purchase. If you opt for financial or operational leasing, the VAT payments are spread over the term of the contract.

Financial leasing: leasing with a purchase option

If you choose financial leasing, you will not be the legal owner of the vehicle: the leasing company buys it and makes it available to you. However, you can easily become the owner because your financial leasing contract includes a purchase option that allows you to buy the vehicle at the end of the contract. The amount of this purchase option is already specified in the contract. Your lease payments include VAT, allowing you to spread this cost over time.

Operational leasing: the option with services included

Would you prefer an all-inclusive package? Operational leasing offers just that.

The leasing company owns the vehicle and makes it available to you. You pay a fixed monthly lease payment that covers everything: the lease of your company car as well as insurance, taxes, maintenance, repairs, tyres and roadside assistance.

The amount of your lease payment reflects these additional services, but gives you a clear view of what your vehicle will cost, even if something unexpected happens, such as a breakdown. Nor do you have to manage these costs and services separately. You must return the vehicle at the end of the contract (with compensation for any damage, where applicable), although some contracts give you the option to buy it at market value.

The leasing contract runs for an agreed period, with a predefined maximum number of kilometres per year. The lease payment includes VAT, which is spread over the entire term of the contract.

Car or commercial vehicle, two or four wheels, new or used

A loan or leasing for an electric bike, motorbike or scooter, van or other commercial vehicle… These various financing solutions are available for a wide range of vehicles: they are therefore not limited to company cars. And you can also take advantage of them for second-hand vehicles to keep costs under control.

When making your decision, it is also important to take into account the total cost of your vehicle – including from a tax perspective – so that you can compare your options objectively.

What about insurance?

Like all motor vehicles driven in Belgium, your company vehicle must be covered by compulsory third-party liability insurance. You can supplement this with comprehensive insurance or other cover related to your business activities, for example for the goods you transport.

Sole trader or company: what are the tax benefits?

Whatever status you have chosen to start your business, the specifications of your business vehicle – and in particular its CO₂ emissions – will determine what you can claim as a tax deduction.

This applies not only to purchase or leasing costs, but also to other costs such as insurance, maintenance and repairs. Since 1 January 2026, there have been even greater differences between electric and internal combustion vehicles.

In summary:

• Internal combustion vehicles (petrol and diesel) purchased or leased from 1 January 2026 are no longer tax deductible, both for sole traders and for companies.
• Electric vehicles are still 100% deductible in 2026. But this rate will decrease in the next few years: 95% in 2027, 90% in 2028, 82.5% in 2029, 75% in 2030 and finally 67.5% in 2031 and beyond.
• Hybrid vehicles are no longer deductible for companies, but remain so for sole traders until 2029.
• These CO₂-based rules do not apply to ‘genuine’ commercial vehicles such as vans: these remain up to 100% tax deductible, including vehicles with internal combustion engines.

The impact of private use of the vehicle

This deductibility rate based on the vehicle’s technical specifications and emissions is not the only factor to take into account when assessing your tax benefit. The ratio of private to business use will also play a role: directly if you operate as a sole trader, or through a taxable benefit in kind if you operate through a company.

Business vehicles for sole traders

If you have opted for sole trader status, the deduction rate for your business vehicle is adjusted according to your private journeys. Have you bought or leased an electric company car (100% deductible) that you use 70% of the time for your business? If so, you’ll be able to deduct 70% of your car expenses.

What expenses are covered?

This principle of deductibility applies to all expenses: purchase or leasing, fuel, maintenance, insurance, charging points, etc.

Business vehicles for companies

In this case, your company will purchase or lease the vehicle and then make it available to you. From a tax perspective, you can therefore deduct your car expenses for corporate income tax purposes.

But be careful: if you also use your vehicle for private travel, this benefit provided by the company is considered a form of remuneration in kind. This is the principle of the benefit in kind (BIK).

This benefit is estimated in euros, then added to your salary… and taxed as such via your personal income tax return, as explained here.

VAT deduction: partial recovery, except for commercial vehicles and bikes

Are you subject to VAT? Whether you buy or lease a vehicle, the VAT you pay on the vehicle and its associated costs is not fully deductible. The same rule applies to sole traders. Here too, the use of your business vehicle is taken into account.

In short:

• The VAT deduction for a company car is capped at a maximum of 50%.
• The rate that applies depends on the ratio between business and private use.
• There are several methods for defining the VAT deductibility rate, including a flat rate of 35%.
• Commercial vehicles such as vans are not subject to the 50% ceiling. The rate is determined in proportion to business use. If the commercial vehicle is used exclusively for business purposes, up to 100% of the VAT can be deducted. If it is also used privately, up to 85% can be deducted.
• You can also deduct up to 100% of the VAT on a company bike, again depending on the ratio of business to private use.
• Consult your accountant or tax specialist to determine which method is best suited to your particular circumstances.

Plug-in hybrid vehicles (PHEVs): extended deductibility for the self-employed

Planning to choose a plug-in hybrid for your future company vehicle? You can still deduct up to 100% of the cost for tax purposes in 2026 (2027 tax year), depending on its CO₂ emissions.

This does not apply to companies, which – as with internal combustion vehicles – can no longer deduct plug-in hybrids purchased or leased from 1 January 2026 (2027 tax year).

But bear in mind:

• Vehicles considered ‘fake hybrids’ are not tax deductible. This is the case if the battery capacity is insufficient or if CO₂ emissions (according to the Euro 6e-bis standard) exceed 75 g/km.
• The deductibility rate depends on the vehicle’s CO₂ emissions.
• Deductibility will gradually decrease until 2029 (2030 tax year) and disappear in 2030.
• Petrol costs are not deductible.