Car expense deductibility in Belgium has undergone a major shift since the Law of 25 November 2021 on greening business mobility. From 2026, the rules tighten considerably for petrol, diesel and hybrid vehicles, while fully electric vehicles keep a favourable regime. This article gives you the full picture of the rules that apply in 2026, with worked examples and practical advice.
The Legal Framework: Articles 66 and 198bis of the 1992 Income Tax Code
Car expense deductibility is governed by:
- Article 66 of the 1992 Income Tax Code: general deductibility rules for individuals (the self-employed)
- Article 198bis of the 1992 Income Tax Code: specific rules for companies
- The Law of 25 November 2021 (the greening law): a progressive reform of deductibility
The rules apply to cars, estate cars and minibuses. Commercial vehicles (vans, trucks) follow separate rules and remain 100% deductible.
The Three Car Expense Deductibility Regimes in 2026
Regime 1: Vehicles Bought, Ordered or Leased Before 1 July 2023
These vehicles follow the old CO2 formula (Article 66, §1 of the Income Tax Code):
Formula: Deductibility = 120% – (0.5% x coefficient x g CO2/km)
The coefficients depend on the fuel type:
| Fuel | Coefficient |
|---|---|
| Diesel | 1 |
| Petrol / LPG / CNG | 0.95 |
| Electric (0 g emissions) | N/A (100% deductible) |
Deductibility is:
- A minimum of 50% (floor)
- A maximum of 100% (ceiling)
- Exception: 0 g CO2 = 100% deductibility
Worked examples:
| Vehicle | CO2 (g/km) | Fuel | Calculation | Deductibility |
|---|---|---|---|---|
| BMW 320d | 130 | Diesel | 120 – (0.5 x 1 x 130) = 55% | 55% |
| VW Golf 1.5 TSI | 120 | Petrol | 120 – (0.5 x 0.95 x 120) = 63% | 63% |
| Peugeot 208 1.2 | 100 | Petrol | 120 – (0.5 x 0.95 x 100) = 72.5% | 72.5% |
| Tesla Model 3 | 0 | Electric | 100% | 100% |
| Toyota Yaris Hybrid | 92 | Petrol | 120 – (0.5 x 0.95 x 92) = 76.3% | 76.3% |
Regime 2: Zero-Emission Vehicles Bought or Ordered From 1 July 2023
Fully electric vehicles (and hydrogen vehicles) bought or ordered from 1 July 2023 follow a declining regime:
| Purchase/order period | Deductibility |
|---|---|
| 1 July 2023 – 31 December 2026 | 100% |
| 2027 | 95% |
| 2028 | 90% |
| 2029 | 82.5% |
| 2030 | 75% |
| 2031 onwards | 67.5% |
Important: it is the order date (or the date the leasing contract is signed) that sets the rate, not the delivery date.
Regime 3: Petrol, Diesel and Hybrid Vehicles Bought or Ordered From 1 July 2023
This is where the reform bites hardest. Petrol, diesel, LPG and CNG vehicles, as well as plug-in hybrids, ordered from 1 July 2023 see their deductibility progressively reduced to 0%:
| Order period | Maximum deductibility |
|---|---|
| 1 July 2023 – 31 December 2025 | Maximum per the CO2 formula (capped at 75% in 2025) |
| 2026 | Maximum 50% |
| 2027 | Maximum 25% |
| 2028 onwards | 0% (no deductibility at all) |
In practice, in 2026: a petrol or diesel vehicle ordered in 2026 is deductible at 50% maximum, regardless of its CO2 emissions.
Which Costs Count Toward Car Expense Deductibility?
The deductibility restriction applies to all costs linked to the vehicle:
| Cost | Subject to the restriction |
|---|---|
| Depreciation or lease payments | Yes |
| Fuel (petrol, diesel, LPG, CNG) | Yes (minimum 50% under the old regimes) |
| Charging electricity | Yes (same rate as the vehicle) |
| Car insurance | Yes |
| Registration tax | Yes |
| Annual road tax | Yes |
| Maintenance and repairs | Yes |
| Tyres | Yes |
| Car washing | Yes |
| Parking | No (100% deductible) |
| Motorway tolls | No (100% deductible) |
| Roadside assistance | Yes |
| Financing (interest) | Yes |
A quirk for fuel (old regime): for vehicles bought before 1 July 2023, fuel costs are deductible according to the CO2 formula but with a minimum of 50% (even if the formula gives a higher rate). In practice, this means fuel for these vehicles is always at least 50% deductible.
Business Use: A Mandatory Pro Rata for Car Expense Deductibility
The Principle
Before applying the CO2 restriction, you must first work out the business share of the vehicle's use. Only that share is deductible (and is then further capped by the CO2/regime rate).
Calculation: Deductible expenses = Total expenses x % business use x % deductibility (CO2/regime)
How to Determine Business Use
For self-employed individuals: you must prove the proportion of business use. Two methods:
- A mileage log: record every business trip (date, destination, km, purpose). Business percentage = business km / total km
- A 75% flat rate: the tax authorities often accept a flat rate of 75% business use, but this is not a right (the tax inspector can demand a mileage log)
For companies: if the vehicle is made available to a director or employee for private use, a benefit in kind (ATN) must be calculated (see our dedicated article on benefits in kind). The benefit in kind is a disallowed expense (DNA) that reduces the tax advantage.
A Complete Example for a Self-Employed Person
Marc, a self-employed consultant in Namur, owns a VW Golf 1.5 TSI (120 g CO2, petrol, bought in 2022).
Annual figures:
- Total km: 25,000 km
- Business km: 18,000 km (72%)
- Total vehicle costs: EUR 8,000 (depreciation, insurance, fuel, maintenance, tax)
- Of which fuel: EUR 2,500
Deductibility calculation:
CO2 formula: 120 – (0.5 x 0.95 x 120) = 63%
| Cost | Amount | Business use (72%) | CO2 rate (63%) | Deductible amount |
|---|---|---|---|---|
| Costs excluding fuel | EUR 5,500 | EUR 3,960 | 63% | EUR 2,494.80 |
| Fuel | EUR 2,500 | EUR 1,800 | 63% (the 50% minimum doesn't apply here, as 63 > 50) | EUR 1,134.00 |
| Total | EUR 8,000 | EUR 5,760 | EUR 3,628.80 |
Marc deducts EUR 3,628.80 out of EUR 8,000 of total costs.
Electric Vehicles: A Very Favourable Regime
Why the Electric Vehicle Wins on Car Expense Deductibility
For a fully electric vehicle ordered before the end of 2026, car expense deductibility is 100%. This means every cost (depreciation, electricity, insurance, maintenance) is fully deductible.
A 5-Year Cost Comparison
Let's compare two scenarios for a self-employed person driving 20,000 business km a year:
Scenario A: BMW 320d (diesel, 130 g CO2, bought in 2022)
| Item | Annual cost | Deductibility (55%) | Annual deduction |
|---|---|---|---|
| Depreciation (EUR 40,000 / 5 years) | EUR 8,000 | 55% | EUR 4,400 |
| Diesel (7 L/100 km, EUR 1.80/L) | EUR 2,520 | 55% | EUR 1,386 |
| Insurance | EUR 1,200 | 55% | EUR 660 |
| Road tax | EUR 600 | 55% | EUR 330 |
| Maintenance | EUR 800 | 55% | EUR 440 |
| Annual total | EUR 13,120 | EUR 7,216 |
Scenario B: Tesla Model 3 (electric, 0 g CO2, ordered in 2025)
| Item | Annual cost | Deductibility (100%) | Annual deduction |
|---|---|---|---|
| Depreciation (EUR 45,000 / 5 years) | EUR 9,000 | 100% | EUR 9,000 |
| Electricity (18 kWh/100 km, EUR 0.30/kWh) | EUR 1,080 | 100% | EUR 1,080 |
| Insurance | EUR 1,400 | 100% | EUR 1,400 |
| Road tax | EUR 100 | 100% | EUR 100 |
| Maintenance | EUR 400 | 100% | EUR 400 |
| Annual total | EUR 11,980 | EUR 11,980 |
Difference in annual deduction: 11,980 – 7,216 = EUR 4,764 more for the electric vehicle.
At a marginal tax rate of 50%, that represents an extra tax saving of EUR 2,382/year, or EUR 11,910 over 5 years.
The Deduction for Charging Infrastructure
A Home Charging Point
Installing a home charging point qualified for a tax reduction for individuals (Article 145/50 of the Income Tax Code) until 31 August 2024. This scheme has now expired.
For the self-employed and companies, a charging point is a business investment that's deductible under the normal rules (depreciation, plus a possible investment deduction).
Publicly Accessible Charging Points (Companies)
Companies installing a charging point that is publicly accessible outside opening hours benefit from enhanced depreciation:
| Installation period | Enhanced depreciation rate |
|---|---|
| Before 1 April 2023 | 200% (double depreciation) |
| 1 April 2023 to 31 August 2024 | 150% |
| From 1 September 2024 | 100% (standard regime) |
Car Leasing: Tax Specifics
Operating Lease vs Financial Lease
| Criterion | Operating lease | Financial lease |
|---|---|---|
| Ownership of the vehicle | Lessor | Transferred to the lessee at the end |
| Accounting treatment | Expense (rent) | Asset on the balance sheet (depreciated) |
| Deductibility | Rent x CO2 rate | Depreciation x CO2 rate |
| VAT | VAT on each rental payment | VAT on the full price at delivery |
| Purchase option | Usually not mandatory | Purchase option at the end of the contract |
The Reform's Impact on Leasing
For leasing contracts signed from 1 July 2023 for petrol, diesel or hybrid vehicles, the same progressive reduction rules apply. The determining date is the date the leasing contract is signed.
Advice: if you have an ongoing lease for a petrol or diesel vehicle signed before July 2023, keep it until the end of the term. The old regime (CO2 formula) remains applicable for the entire contract.
Commercial Vehicles: A Separate Regime
Commercial vehicles (vans, open-bed pick-ups, trucks) are not subject to the CO2 restriction. They are 100% deductible (excluding private use).
Definition: a commercial vehicle is designed and built to transport goods. Box J of the registration certificate must state "van" or equivalent.
Caution: double-cab pick-ups and SUVs registered as "cars" are subject to the car rules, even if used for commercial purposes.
The CO2 Solidarity Contribution for Companies
The Principle
When a company makes a vehicle available to an employee or director for private use, it must pay a CO2 solidarity contribution to the National Social Security Office (ONSS) (Article 38, §3quater of the Law of 29 June 1981).
Calculating the CO2 Contribution (2026 Amounts)
| Fuel | Formula (indicative monthly amounts) |
|---|---|
| Petrol | [(CO2 x EUR 9) – 768] / 12 (minimum EUR 32.05/month) |
| Diesel | [(CO2 x EUR 9) – 600] / 12 (minimum EUR 32.05/month) |
| LPG | [(CO2 x EUR 9) – 990] / 12 (minimum EUR 32.05/month) |
| Electric (0 g CO2) | Minimum = EUR 32.05/month |
Example: a BMW 320d (130 g CO2, diesel)
Monthly contribution: [(130 x 9) – 600] / 12 = (1,170 – 600) / 12 = EUR 47.50/month = EUR 570/year
This contribution is a deductible cost for the company.
The Mileage Allowance: An Alternative
For the Self-Employed
If you use your own car for business travel, you can opt for a flat-rate mileage allowance instead of claiming car expense deductibility on actual costs.
The 2026 flat rate is EUR 0.4280/km (indexed annually).
Advantage: no need to calculate CO2 deductibility, no receipts for fuel, insurance, etc.
Drawback: if your actual cost per kilometre is higher than the flat rate, you lose out on deductions.
For Employees and Directors
A mileage allowance paid by a company to an employee or director who uses their own vehicle is:
- Tax-exempt for the recipient (within the flat-rate limit)
- Deductible for the company (but capped by the CO2 deductibility of the vehicle used)
Summary Table: Car Expense Deductibility by Vehicle Type in 2026
| Vehicle type | 2026 deductibility | 2027 deductibility | 2028+ deductibility | Recommendation |
|---|---|---|---|---|
| Electric (ordered before 2027) | 100% | 95% | 90% | Tax-optimal |
| Plug-in hybrid (ordered before 07/2023) | Per CO2 | Per CO2 | Per CO2 | Keep if already owned |
| Plug-in hybrid (ordered in 2026) | Max 50% | Max 25% | 0% | Avoid |
| Petrol/diesel (ordered before 07/2023) | Per CO2 | Per CO2 | Per CO2 | Keep if already owned |
| Petrol/diesel (ordered in 2026) | Max 50% | Max 25% | 0% | Avoid |
| Commercial vehicle (van) | 100% | 100% | 100% | Always worthwhile |
Practical Advice for 2026
- If you need to replace your car, switch to electric: it's the only tax-rational choice for orders from 2026 onwards
- Keep your current petrol or diesel car if the contract/order dates from before July 2023: the old regime still applies
- Keep a mileage log if you're self-employed: it's the best proof of business use
- Calculate the total cost of ownership (TCO) before choosing: purchase price, fuel/electricity, insurance, maintenance, tax
- Consider leasing for electric vehicles: leasing instalments tend to align with petrol/diesel models thanks to fuel and maintenance savings
- Install a charging point if you switch to electric: it's a deductible investment
Official Resources
- FPS Finance – Car expenses: finances.belgium.be
- The Law of 25 November 2021 (greening mobility): Belgian Official Gazette (Moniteur belge)
- FPS Mobility: mobilit.belgium.be
- FPS Finance Contact Centre: 02 572 57 57
Conclusion
Belgian car expense deductibility rules in 2026 send a clear signal: the electric vehicle is now the most advantageous choice from a tax standpoint. The essentials:
- Petrol/diesel vehicles ordered in 2026: maximum 50% deductibility, falling to 0% by 2028
- Electric vehicles ordered before 2027: 100% deductibility
- Older vehicles (before July 2023): the old regime (CO2 formula) still applies
- The tax gap between electric and petrol/diesel can amount to several thousand euros a year
For every Belgian entrepreneur, now is the time to seriously plan the switch to electric — not just for the environment, but for your finances too.
This article was written by the Espero-Soft team for the blog dedicated to entrepreneurs in Belgium. For personalised advice, consult a professional.
