- Foreign employers providing company cars to Belgian resident employees will be considered as providing car rental services and will be subject to Belgian VAT.
- The taxable basis is either the consideration or the normal value, whichever is higher, and is calculated by reference to the leasing rents and costs related to the car.
- The recovery percentage and professional percentage are then multiplied to obtain the actual taxable basis.
- The circular allows for a lump-sum reference ratio of 65% for private use and 35% for professional use.
- Luxembourg employers with full VAT deduction rights will have to pay Belgian VAT on 65% of the car leasing and associated costs, while a bank with a 10% recovery ratio will only pay VAT on 6.5% of the costs.
- The CJEU ruled that the supply of company cars to employees who have the right to use the car for private purposes for an agreed period of more than 30 days, against payment of rent, and where the car remains permanently at their disposal, should be subject to VAT at the place of residence of the employee.
- The employer should collect and remit VAT in all countries where its employees reside.
- The German and French situations still lack clarity, while Belgium and Luxembourg have clarified their positions on company cars.
Source KPMG
See also
