The Death of the Fossil-Fuel Company Car: What's Deductible in 2026 and the Mobility Budget Alternative

If you have ever driven a company car in Belgium, the rules just changed in a way you must understand. The combustion-engine company car is dead from 2026. Not "more expensive". Not "less attractive". Dead, as in 0% tax deductible.

This is the simple founder's view.

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The four-line summary

1. New petrol or diesel company car bought from 1 January 2026: 0% deductible. Your company pays for it 100% out of taxed profit.
2. New plug-in hybrid: still survives, but only if you are self-employed (not through a company), and only on a declining curve. 75% deductible in 2026, less in 2027, gone by 2028.
3. New electric car bought before 1 January 2027: 100% deductible. Same generous regime as the old combustion world.
4. The mobility budget is the new tax-friendly path for employees and yourself — and from 2026 its company-car pillar must be fully electric.

That is the whole story. The rest is detail.

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What this changes for you, the founder

### If you have an existing combustion car owned by your company

You keep the deduction rate that applied when you bought it. The new rules do not retroactively delete your existing benefit. Selling that car and rebuying triggers the new regime — so think twice before upgrading.

### If you were planning to buy a petrol/diesel car in 2026

Don't. The tax math is brutal. A €45,000 SUV that used to cost your company ~€7,000–€8,000 a year after deductions now costs ~€15,000+. Buy electric or use the mobility budget.

### If you are self-employed and want a plug-in hybrid

You have a small window. 2026: up to 75% deduction. 2027: less. 2028: gone. If the PHEV is your "transition vehicle" before going fully electric, the window is now.

### If you are an employer offering company cars

Stop offering combustion. The economics are inverted. Offer:

• A fully electric car under the mobility budget pillar 1, or
• A direct EV company car (still under classic regime, 100% deductible if delivered in 2026), or
• The full mobility budget with public transport + bike + cash for employees who don't need a car.

The mobility budget delivers roughly 45% more net value to the employee per euro you spend than a gross-salary increase — because pillar 2 (transport, bike, housing top-up) is fully exempt.

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The number that decides

Here is the number to keep in your head: for any car decision in 2026, electric is the only choice that preserves the historic Belgian advantage.

• Combustion: 0% deductible. Brutal.
• PHEV through a company: 0%. Same outcome.
• PHEV self-employed: 75% in 2026, gone by 2028. Marginal.
• Electric: 100% before 2027, gentle glide down to 67.5% by 2031. Generous.

The transition is asymmetric and intentional. Belgium has the highest density of company cars in Europe and used it as a tax-policy lever to electrify the fleet quickly.

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What to do this quarter

1. Inventory your current cars: acquisition date, fuel type, current deduction rate.
2. Decide replacement timing based on the acquisition date — newer cars under the 2023–2025 transitional formula are already losing rate annually.
3. Place EV orders early. Lead times for popular electric models stretch into late 2026.
4. Install a charging station before 31 December 2025 if you want any of the enhanced deduction; from 2025 it's standard rates only.
5. Re-design your remuneration packaging for any employee earning <€100k gross — the mobility budget may be the cheaper way to deliver the same net value.

The honest assessment

The Belgian company car as a tax-efficient compensation tool survives, but only in electric form. The cultural and operational adjustment is real — charging logistics, range anxiety, longer order lead times — but the tax math leaves no realistic alternative.

For most founders, the question is not whether to go electric. It is which model, and how soon.