The current benefit in kind for zero-emission cars remains “very attractive”. This is what the House of Automobile (grouping of Federations of the Luxembourg automobile sector) believes, which made a presentation on the future of the company car.
Remember that from January 1, 2025, the tax rates applied to the benefit in kind granted to company cars will only be really advantageous for electric or hydrogen cars, that is to say for cars with zero CO2 emissions. Thus, a single rate of 2% will apply to cars with thermal or hybrid engines (compared to 0.8% to 1.8% previously, depending on CO2 emissions), while remaining at 0.5% or 0. 6% (depending on vehicle consumption) for 100% electric cars. The system applies to all orders until December 31, 2026 inclusive.
The non-profit organization Mobiz takes the example of a resident employee belonging to tax class 1, who earns 7,000 euros gross per month. He benefits from a 100% electric company car whose purchase price is 60,799 euros including tax. The monthly impact of the car on net salary is 244.83 euros. The monthly impact of converting the car into salary amounts to 514.33 euros.
If this employee wants to buy the car privately, the acquisition price will be higher than 60,799 euros including tax, because he will not benefit from the discount granted to his employer. Taking into account the risk taking and the management burden (financing of the new car, complete insurance package, winter tires, maintenance and repair costs, roadside assistance, replacement vehicle, etc.), the total monthly cost Private use will cost more than 1,110 euros. “The cash available following the conversion (759.16 euros) is well below the cost for private use,” notes the Luxembourg leasing association. The zero-emission company car remains truly advantageous.”
On the other hand, the impact on net salary for cars with thermal or hybrid engines is greater. Mobiz takes the example of a resident employee belonging to tax class 1, earning 5,000 euros gross per month, who benefits from a leasing Opel Grandland Plug-in hybrid plug-in. If the impact on his net salary is 129.40 euros in 2024, it will increase to 325.50 euros in 2025, i.e. a differential of 196 euros.
However, even with a benefit in kind rate of 2%, the thermal company car “remains advantageous”, underlines Dominique Roger, president of Mobiz. The manager takes the example of a resident employee belonging to tax class 1, earning 7,000 euros gross per month, who benefits from a leased Mercedes C 220 AMG line, the price of which is 55,320 euros including tax (fleet discount of 14%).
The monthly impact of the car on net salary is 574.48 euros. The monthly impact of converting the car into salary amounts to 659.21 euros. If this employee wants to buy the car privately, the acquisition price will be 59,823 euros including tax, because he will “only” benefit from a discount of more or less 7%. The cash available following the conversion (1,233.69 euros) remains lower than the monthly cost for private use, which is estimated at more than 1,356.73 euros.
Company cars represent 40% of registrations
An average of 19,000 company cars are sold each year, corresponding to more or less 40% of personal vehicle registrations, indicates the House of Automobile.
“The sales of these 19,000 cars alone represent an annual turnover of 800 million euros for the dealerships, to which is added 130 million euros in VAT for the State,” specifies the organization which represents the interests of the automotive sector. These 19,000 cars also represent “more than 1,600” jobs.
Nearly one in two company cars used by a cross-border worker
Between 40 and 50% of company vehicles are used by cross-border commuters, which represents between 10,000 and 12,500 sales of personal vehicles annually, notes the House of Automobile. In the absence of a company vehicle system, this market would “fall entirely” to neighboring countries (France, Belgium, Germany).
“If vehicles used by residents were converted to privately owned vehicles, we would expect these vehicles to be kept on average twice as long,” says the organization which represents the interests of the automotive sector. Consequently, the number of sales to individuals “would be divided by 2” and thus the number of annual sales and registrations “would drop by around 7,000 units”.
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