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  • Writer's pictureThierry Devresse

The federal TCO package: where's the simplification?

The legislator's aim with these new flat-rate formulas is to simplify administration.

Here are the simplifications they bring.

For rented or leased cars :

The basis of the calculation remains TCO2, and nothing has changed here, but the calculation of the energy component (fuel or electric recharging) is now a flat-rate calculation. There is no longer any need for tedious calculations of the actual fuel consumption of each car to define an average per vehicle category.

There's also no need to calculate the average annual mileage per employee (to define, or not, an average annual mileage per vehicle category or for the company).

Most companies had already opted for a pragmatic solution such as WLTP + x%, but there was no uniformity on the percentage to be used. For these companies, this is therefore an official standardisation of the calculation, which is a very good thing.

For the calculation of average annual mileage, the new formula is based on the existing VAT rules, which is a great simplification and standardisation for companies.

All you have to do is multiply the reference fuel price by the number of kilometres defined in the formula, and that's it! For reference, the cost of consumption per kilometre is equal to 30 p.c. of the kilometric allowance in force for federal civil servants.

The formula is: consumption cost per kilometre x (6,000 km + home-work distance x 2 x 200).

For owned or leased vehicles :

The lump sum is determined in accordance with the following formula:

Catalogue value of the vehicle (including tax on the non-deductible part of this catalogue value) x 25 p.c. + employer's CO2 solidarity contribution + (6,000 + home-work distance x 2 x 200) x consumption cost per kilometre.

The administrative simplification here is enormous. Companies with their own vehicles or those on finance leases are really helped, because for them calculating the TCO was really tedious (if not mission impossible)..

Business kilometres are excluded from these packages

It is important to note that business kilometres are excluded from these formulas. The legislator allows these kilometres to be compensated over and above the mobility budget when the latter is granted.

This is a much-appreciated simplification, as it clarifies and solves the problem of sales staff and consultants whose business mileage varies enormously depending on their assignments. However, the employer will have to set up a system for measuring or reporting these kilometres.

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