Belgium’s tax incentives drive electric vehicles in corporate fleets

There has been a remarkable rise in new battery electric vehicle (BEV) registrations in Belgium over the last few years, with nearly 128,000 units registered in 2024, a 37% increase over the previous year. The growth between 2022 and 2023 was even more impressive, as new registrations grew by 148% (Figure 1). This case highlights how progressive, targeted government policies can help grow the BEV market. Let’s dive into it.

Figure 1. Total new registrations of battery electric cars by year in Belgium

Sources: ACEA and the European Alternative Fuels Observatory  

In 2024, more than one in four new passenger cars registered in Belgium was a BEV (28%). This percentage was significantly higher than in other key European markets, including the United Kingdom (20%), France (17%), and Germany (14%), as shown in Table 1. From 2023 to 2024, Belgium recorded the largest growth in BEV shares among these markets, with an increase of almost 9 percentage points.

Table 1. Shares of battery electric cars in new registrations in key markets  

Source: ACEA  

Companies are vital to these changes. In 2024, company cars accounted for 62% of the over 448,000 new passenger car registrations in Belgium; that’s about 276,000 cars, 40% of them BEVs. In comparison, private individuals registered around 172,000 passenger cars, just 10% of them BEVs. Of the almost 128,000 new BEVs registered in 2024, 87% were by companies. Additionally, by the fourth quarter of 2024, there were nearly 74,000 charging points accessible to the public in Belgium, a 66% jump over the same quarter the previous year.

This isn’t surprising when you consider that a key piece of legislation implemented in Belgium in December 2021 encouraged the uptake of zero-emission vehicles in company fleets. One part of the story in Belgium involves tax deductions for company cars. This approach is gradually discouraging the acquisition of traditional internal combustion engine vehicles (ICEVs) and plug-in-hybrid vehicles (PHEVs) while offering benefits for BEVs and fuel-cell electric vehicles (FCEVs). For ICEVs purchased, leased, or rented by companies between July 2023 and December 2025, the tax deduction will drop from a maximum of 100% until end 2024 to 0% by January 2028 (Table 2). On the other hand, BEVs and FCEVs bought or leased until December 2026 will still benefit from a full 100% tax deduction; starting January 2027, deductible rates on these will also decrease to a maximum of 67.5% by 2031.

The second part of the story is the private use of a company car by an employee. If an employee has the permission by his employer to use a company car for personal purposes, this is a taxable benefit. Consequently, it will be treated as part of an employee’s income and taxed accordingly. The private use of a company car by an employee is a common practice in Europe. In Belgium, the benefit in kind (BIK) is calculated based on factors like car catalogue value, fuel type, carbon dioxide (CO₂) emissions, and registration date. The rates for BEVs and FCEVs have remained stable, while CO₂ emission rates and minimum benefit amounts for ICEVs have become stricter over the past decade. The solidarity contribution, also known as the CO₂ contribution, is the employer’s obligation; this is a monthly charge based on the vehicle’s CO₂ emissions, fuel type, and an indexation coefficient. Since July 2023, an “increase coefficient multiplier” has been added for ICEVs. For example, in 2024, the yearly solidarity contribution for a diesel car with CO₂ emissions of 129 g/km exceeded €1,900, whereas for a BEV it was less than €400.

Figure 2 shows selected policies and monthly shares of new BEV registrations beginning in January 2022. While there are fluctuations among the months, the policies aimed at companies appear to have contributed to a rise in BEV adoption when considering the yearly averages.

Figure 2. Monthly BEV shares in new passenger car registrations in Belgium and selected policy measures