Company car benefit in kind (BIK) : explanation and calculation

Benefit in kind company car: key points

• A benefit in kind is a form of remuneration and is taxed accordingly.
• A benefit in kind may have tax implications for self-employed company directors who receive remuneration from their company.
• Self-employed professionals operating in their own name are not affected by the benefit-in-kind rules, as they do not receive remuneration as company directors.
• In Belgium, a company car is one of the most common forms of benefit in kind.
• This benefit is a flat-rate taxable benefit, with both its value and how it is calculated determined by the Belgian tax authorities.
• The taxable value of the benefit depends on the car’s catalogue price, CO₂ emissions and age. This generally favours electric vehicles.

What is a benefit in kind?

According to the Belgian tax authorities (FPS Finance), a “benefit in kind” is “a benefit granted by your employer free of charge or at a reduced price, such as a company car or a smartphone”.

From a tax perspective, this benefit is treated and taxed as remuneration, even though no cash is exchanged. Its value is converted into euros, added to your professional income, and considered when calculating social security contributions.

Why is a company car considered a benefit in kind?

In this context, it is the private use of the vehicle outside of professional purposes that is considered a benefit. In practice, having a company car means you do not need to buy a private vehicle.

Benefits in kind, also for company directors

The benefit-in-kind rules apply not only to employees, but also to self-employed professionals who operate through a company. As a company director, you may receive benefits from your company, such as a car, accommodation or a smartphone.

The value of these benefits is added to your director's remuneration. Your personal income tax is then calculated on your total remuneration, including these taxable benefits, which are expressed in euros.

What about self-employed professionals operating as sole traders?

There is no company car benefit in kind for sole traders, as there is no separate legal entity providing a vehicle to an individual. Instead, a percentage of car expenses can be deducted based on the proportion of professional versus private use of the vehicle.

Company car BIK: a flat-rate taxable benefit

The benefit in kind (BIK) for company cars is calculated using a flat-rate system. 

This means that the amount and calculation method are defined by law and must be applied as such. 

The formula adjusts the taxable benefit according to the vehicle's characteristics, particularly its CO₂ emissions and catalogue value.

How is the benefit in kind for a company car calculated?

The annual BIK amount for a company car is calculated using the following formula: 

6/7 × catalogue value of the vehicle (including VAT) × CO₂ percentage based on reference emissions × age coefficient. 

Here are some practical calculation examples

Whatever the result of this calculation, a minimum annual amount applies. This may change from year to year. For 2026, the minimum BIK is €1,690. So even if your calculation produces a lower amount, €1,690 will be added to your taxable remuneration. 

 CO₂ emissions and the reference percentage

To encourage cleaner mobility, the company car benefit in kind calculation takes the vehicle’s CO₂ emissions into account. 

In practice, the FPS Finance sets a reference emissions value each year for petrol, LPG and natural gas engines, as well as for diesel engines.

For 2026, the reference values are:

• 70 g/km for petrol, LPG and natural gas vehicles
• 58 g/km for diesel vehicles

The following rules apply:

• If your vehicle’s emissions are equal to the reference value, the base CO₂ percentage is 5.5%.
• This percentage decreases or increases by 0.1% for each gram of CO₂ below or above the reference value, with a minimum of 4% and a maximum of 18%.
• For electric vehicles, a fixed percentage of 4% always applies. As a result, the electric company car benefit in kind is generally lower and therefore more attractive from a tax perspective.

Age of the vehicle: which coefficient applies?

The age of the car also affects the BIK calculation. An age coefficient, expressed as a percentage and determined by the FPS Finance, is applied. In short, the older the vehicle, the lower the coefficient and therefore the lower the taxable benefit.
However, there is a floor: once the car is 61 months old or more, the same minimum coefficient of 70% always applies.

Which catalogue value is used?

The catalogue value used to calculate the annual company car benefit in kind includes VAT and the cost of all options.

Discounts and promotional offers are ignored. Consequently, this catalogue value may be higher than the amount your company actually paid for the vehicle.

Examples of company car benefit in kind calculations

Electric company car

John is the managing director of his IT company.

• In 2026, his company purchases a fully electric vehicle and makes it available to him.
• The vehicle is second-hand and was first registered in October 2023.
• Its list price, including VAT, is €53,000.

John’s annual benefit in kind is calculated using:

• A CO₂ percentage of 4% (the standard rate for electric vehicles)
• An age coefficient of 88%

Calculation:
6/7 × €53,000 × 4% × 88% = €1,599

However, this amount is below the legal minimum.

The taxable benefit added to John’s remuneration as a company director is therefore €1,690, corresponding to the minimum BIK for 2026.

Petrol company car

Jim runs a private limited company specialising in consultancy services.

• He drives a petrol car that his company bought new.
• The catalogue value, including VAT, is €33,000.
• The vehicle emits 115 g/km of CO₂, which is 45 g/km above the reference value of 70 g/km. The applicable CO₂ percentage is therefore: 5.5% + 4.5% = 10%

The taxable benefit is calculated as follows: 6/7 × €33,000 × 10% = €2,828 

FAQs: company car benefit in kind

Do company directors benefit from the exemption for commuting?

Employees who use their company car for commuting benefit from a partial exemption on their company car BIK. In 2026, this exemption amounts to €500. Company directors are not eligible for this exemption and must declare the full amount of their benefit in kind.

Purchase, finance lease or operating lease: does the way the company finances the vehicle affect the company car benefit in kind of the employee or company director who uses it?

Whether the vehicle is purchased outright, financed through a finance lease or acquired via an operating lease makes no difference. The only factor that matters is that the company makes the vehicle available to an employee or company director, thereby creating a taxable benefit in kind.

Fake hybrids: what are they and how are they taxed?

Some plug-in hybrid electric vehicles (PHEVs) have real-world CO₂ emissions that are significantly higher than their official values. This may be due to their weight or to limited use of the electric battery.

For these vehicles, which FPS Finance refers to as “fake hybrids”, the benefit in kind is calculated differently:

• The CO₂ emissions of the equivalent combustion-engine model are used instead of those of the hybrid vehicle.
• If no equivalent combustion-engine model exists, the official CO₂ emissions are multiplied by 2.5.

Since 2025 (based on the Euro 6e-bis standard), company vehicles are considered fake hybrids if they:

• have a battery capacity of less then 0.5 kWh per 100 kg of vehicle weight; 
• OR they have emissions more than 75 g/km of CO₂. 

The taxable benefit for these plug-in hybrids can therefore increase rapidly, with a significant impact on taxation.