Sunday, April 8, 2012

25-01-12 Company cars: a new update!
In December 2011, the government introduced new measures that significantly amends the calculation of the benefit in kind company car. The new formula takes into account the 'catalog value'.

As a reminder:
catalog value is the invoice value, options and VAT, net of rebates, discounts, price reductions and rebates
the new formula is: percentage of catalog value x CO2 x 6/7
For more details, please refer to our communication of 5 January 2012 and the related e-magazine.
The text is currently assumed that the same formula applies to used cars. So for second hand cars as well, the employer must be based on the original invoice for the value catalog.
However, these new provisions could have the unintended consequences the government. Thus, companies, why not, individuals might be tempted to sell cars for a new invoice price less and receive a lesser benefit in kind. Revenue for the Treasury could be affected.
The Minister thus sought to fill this gap in legislation. How? By decreasing the value of second hand vehicles through a mechanism established. It is expected that the value of vehicles decreased by 6% per year.
A question now arises concerning the amount to be used for the calculation and how this new provision will be enforced. Currently, no specific legislation has yet been written on the subject.
On its website, the Minister Vanackere indicates that this measure is intended to establish the benefit of any kind for used vehicles. The formula adopted in late 2011 and described above should not be changed.


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