• Calculation benefit in kind and tax deductibility of company cars

What CO2 emissions should you take into account?

18 December 2020

Since the introduction of the WLTP standard, the certificate of conformity of a car sometimes mentions several standards for CO2 emissions: the NEDC standard and the WLTP standard. The WLTP emission level is usually substantially higher than that of the NEDC.

It is therefore important to know what CO2 emissions you should use to calculate the benefit in kind and the tax deductibility. We have summarised this for you in the table below. This table gives you an overview of which standard you should take into account when calculating the benefit in kind and the deductibility:


Where can you find the correct CO2 emission level of your car?

The CO2 emissions according to the WLTP norm for recent vehicles are indicated on the car’s certificate of conformity (section 49.4 or 49.1).

However there is a nuance, if the certificate of conformity states a CO2 emissions  level, but the certificate of registration does not. In addition, if the Vehicle Registration Office does not have any data either, the CO2 emission level of the vehicle is determined as follows:

  • Petrol, LPG or natural gas engine: CO2 emission level of 205 g/km
  • Diesel engine: CO2 emission level of 195 g/km.


Transitional period

As of 1 January 2021, car manufacturers are allowed to communicate an NEDC value in addition to the WLTP value. From that date, however, it will only be compulsory to state the WLTP value on the certificate of conformity. As a result, from 1 January 2021, the following situations could occur for vehicles in circulation:

  1. Only an (old) NEDC 1.0 value available
  2. Both a WLTP value and an NEDC 2.0 value available
  3. Only a WLTP value available.

The FAQ (update January 2020) states that in the absence of legislative provisions to the contrary, the benefit in kind for company cars and the deductibility of car costs from 1 January 2021 onwards may still be determined on the basis of the (more advantageous) NEDC value for the vehicles covered by points 1 and 2. Only for the vehicles falling under point 3, there is the obligation to determine the benefit in kind and the deductibility according to the WLTP value from 1 January 2021 if there is no longer an NEDC value available. In practice, this means that only cars purchased after 1 January 2021 may fall under point 3 and are therefore obliged to use the new WLTP value. 


Impact WLTP

Measuring the CO2 emission level using the new WLTP method leads to a higher CO2 emission level than using the old NEDC method. In some cases the WLTP measurement method even results in a CO2 emission level that is 30g/km higher than under the old NEDC measurement method.

Under the WLTP method, the options of the vehicle are also taken into account. For example, a panoramic roof will have an additional charge of 3 g/km and a tow bar will have an increase in CO2 emissions of 5 g/km.


Impact on the calculation of the benefit in kind

The formula for the calculation remains unchanged. However, CO2 emissions according to the WLTP measurement method will be higher, which will also increase the benefit in kind.

Deductibility in corporate income tax

From 1 January 2020 a new formula will apply to determine the deductibility of car expenses.


Higher CO2 emissions with this formula will reduce the deductibility of car costs.


Impact of the WLTP value in relation to the NEDC value on the calculation of the benefit in kind


Audi A6 powered by a petrol engine with a list price of EUR 59,900.00

  • CO2 value according to WLTP: 166 g/km
  • CO2 value according to NEDC: 144 g/km

Formula benefit in kind petrol car (for 2021)

Catalogue price x (5.5 + ((CO2-102) x 0.1))% x 6/7 x age coefficient (here calculated as new car)

Annual benefit in kind with NEDC (144 g/km)

59,900.00 x (5.5 + ((144-102) x 0.1))% x 6/7 x 100% = EUR 4,980.26

Annual benefit in kind with WLTP (166 g/km)

59,900.00 x (5.5 + ((166-102) x 0.1))% x 6/7 x 100% = EUR 6,109.80

There is therefore a difference of EUR 1,129.54, which is equal to an increase of almost 25% of the benefit in kind based on the NEDC value. 



If you have any questions about the calculation of CO2 emissions, you can always contact your usual BDO contact person or one of our Global Employer Services experts: