IMPACT OF THE DIESEL GATE ON YOUR FISCAL POSITION
27 October 2015
On 19 September 2015 it became quite clear that Volkswagen had manipulated its figures for the CO2 emissions of certain vehicles. In Belgium 393,648 vehicles (Volkswagen, Audi, Skoda en Seat) have been equipped with inaccurate software and associated engines. As a result, the amount of CO2 emissions determined for these vehicles was found to be incorrect.
As is known, the deductibility of car costs in corporate income tax as well as the calculation of the benefit in kind for the private use of a company car is dependent on the CO2 emissions of the vehicle.
For companies, the CO2 emissions are also of importance to determine their taxable base in Belgium. What is more, a company (or branch office or permanent establishment) that offers a passenger car to its employees/company directors will always have to pay corporate income tax on 17% of the charged benefit in kind. That 17% qualifies a minimum taxable base for corporate income tax purposes to which no fiscal deductions can be offset.
You may have wondered if the information used to prepare the tax return is still considered to be correct from a tax point of view.
The minister of Finance was interrogated on this issue. In his reply of 7 October 2015 he confirmed that if the current tax legislation had been applied, the owners of the intended car brands shall not be penalised for this type of fraud and will therefore not be held responsible.
How the Belgian tax legislation will evolve after this CO2 fraud is, however, not yet known. µ
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