The WLTP standard, which more realistically calculates the consumption and CO2 emissions of cars, will have an impact on the way they are taxed in Belgium. But in our country, we obviously like to drag things along: rather than adapting the calculation grids, we extend the validity of the old calculation, beyond 2020. Nothing says, however, that the manufacturers will follow . A very Belgian story that we are trying to summarize: hang in there.
A new standard, more realistic and therefore more severe, for measuring the quantity of CO2 emitted by cars, called WLTP (see below) has been implemented in the European Union. However, these CO2 emissions have been used for a long time as a calculation basis in Belgium and elsewhere in the world to establish various taxes.
People contacted the RTL INFO editorial staff because they heard disturbing things while going to their garage. “I have to change company car soon, and my dealership tells me that from 2021, the WLTP standard replaces the old one. It is stricter, so for the same car, the CO2 emissions will be greater. And so, taxes will increase, and it would even be retroactive“, worries Antoine via the orange button Alert us. What is it really?
The WLTP standard “replaces” the NEDC standard, but not in Belgium where they coexist
Since the VW scandal, the German company having cheated on the calculations of average consumption and CO2 emissions of its cars, Europe wants consumers to no longer be fooled by inconsistent figures. It therefore imagined a new way of calculating CO2 emissions and average consumption, more realistic and faithful to reality.
The Globally harmonized test procedure for passenger cars and light commercial vehicles (in English Worldwide harmonized Light vehicles Test Procedures, or WLTP) was set in 2017, and it is gradually being imposed by Europe on its member states.
The WLTP replaces the NEDC (New European Driving Cycle), active from 1973 to 2018, and which was criticized for being unrepresentative of reality with the inclusion of an average test speed of 33 km / h, low load on the engine, very low acceleration, etc.
WLTP standard displays CO2 emissions between 5 and 30% higher than the NEDC standard for gasoline and diesel cars (this is not the case for hybrids).
A schedule has been established in Belgium, under pressure from Europe: since September 2018, manufacturers must perform the WLTP test and this measure must be indicated in showrooms and advertisements. But, at the same time, they also still had to calculate a theoretical NEDC value (estimated from the WLTP results) until December 31, 2020, this is called NEDC 2.0.
The rest, therefore what happens from 2021, should have been decided in the course of this year. But without a government, or with a temporary government dedicated to managing the health crisis, nothing has been decided.
The tax administration has found a way to avoid administrative chaos: continue to accept the NEDC value on the certificate of conformity (as far as 2021, manufacturers still intend to do so, which is not guaranteed, see below).
Are company cars going to cost employees much more in 2021?
The CO2 emission of a car is taken into account for the calculation of the benefit in kind (ATN) represented by a company car (this is a monthly deduction from wages for the employee). And the consequences of an increase in the ‘CO2 value’ of a vehicle, caused by the arrival of WLTP, are significant.
First a little theory: the calculation of the ATN is based on the catalog value of the vehicle, which is weighted by the CO2 emissions. The more these rejections increase, the more the ATN increases, and the more the monthly deduction from salary increases (and therefore the employee’s net salary decreases). Here is a table showing the calculation:
We did the math for a 30,000 euro gasoline car emitting 100 grams of CO2 with the old calculation (NEDC) and in the worst case scenario 130 grams with the new calculation (WLTP). The difference at the level of the ATN which is deducted from the employee’s salary would be around 700 euros per year, or about 60 euros per month.
There would also be an impact in terms of the registration tax, but it would be slight: a few dozen euros to pay in addition but only once, when registering a vehicle (road tax, that that we pay each year, does not take into account CO2 emissions). The spokesperson for the Walloon Region told us that the Parliament did not intend to touch this grid, even if the WLTP result one day completely replaces the NEDC.
The federal sleight of hand
Given the absence of a government with full powers and the coronavirus crisis, the question of what to do with this new calculation of CO2 emissions in 2021 has never been a priority. We submitted Antoine’s concerns to the SPF (Federal Public Service) Finances. The response we received is contained in a document entitled “New calculation rules and FAQ” of the ATN company car.
It reads what looks like a sleight of hand, on page 39. “From January 1, 2021, automobile manufacturers can still calculate an NEDC value“and add it to the European certificate of conformity.
We will therefore continue to have two values, two quantities of CO2 (WLTP and NEDC) released by the same car, and indicated on its certificate.
It is on the basis of this certificate that the DIV (Vehicle Registration) records in its databases the quantity of CO2 that a car releases. “In the current state of the legislation, the taxable benefit in kind must be determined taking into account the CO2 emission rate of the vehicle, as available from the DIV. “ says the SPF Finances.
But what value will the DIV take? WLTP or NEDC? The answer is surreal: “The legal text does not clearly specify whether to take the NEDC value or rather the WLTP value“, specifies the FPS Finances.
Understand: it would be time to clarify the situation because it is a Belgian story, this WLTP calculation. As it stands, this new standard is completely useless since its implementation 3 years ago, given that the NEDC calculation coexists and that the DIV will “to choose“.
In reality, it is when you apply for registration that you (or more often your insurer, online) will choose and indicate the CO2 rejection calculation that benefits you the most in the box (orange outline) of the form :
According to Febiac, “this adaptation of the calculation of the taxation of company cars should have been approved by the federal government, but in the absence of the latter, it was validated by the Administration at the beginning of the summer“, explains Christophe Dubon, from the communication service of the Belgian Federation of the Automobile and Cycle Industry. The Febiac reassures Antoine more by setting aside any retroactivity of the measures:”This new regime will only affect newly registered company cars and will therefore not impact cars that are currently in circulation.“.
What does the new minister say about this gruesome situation?
We contacted the new Minister of Finance, Vincent Van Peteghem, who has just moved in and does not know the file. His spokesperson referred us to the office of the SPF Finances, who ended up telling us that “the administration is studying the issue“. Same kind of reaction on the side of Ecolo, who has joined the federal government (Georges Gilkinet is Minister of Mobility). Reading between the lines, we understand that it may finally change in the weeks / months to come, but it will soon be too late, you will understand.
What the administration is studying is, as we can imagine, a rewriting of the ATN calculations, to limit the financial impact of the sudden increase in CO2 emissions. Let us take the case of France: for a few months now, only the WLTP standard has been taken into account (see the explanations of L’Argus). The French government had previously slightly revised its grid of ‘malus’ so as not to add too much to the bill for the citizen.
“Europe has made it clear to member states that they need to find a solution so that the financial impact does not rest on the end customer. Because the goal of WLTP, ultimately, is to have values that are closer to reality“, tells us Ann Van Espen of LeasePlan, one of the leasing (intermediary between a company and an employee in the context of the granting of a company car) active in Belgium.
Let us take the most probable scenario: the new Minister of Finance does not solve the equation in the coming weeks and confirms what the SPF explained to us above (double standard accepted in 2021). If the idea seems absurd but effective, in practice, nothing is less certain. There could be a famous quack, and it is located at the level of the factories that make the cars.
Today, we do not yet know if in 2021 we will have both measures
For its part, Audi Belgium hopes …
Indeed, it is on them that everything ultimately rests, because they deliver the cars with their certificate of conformity. We gave the floor to the manufacturers, but only the Audi brand was kind enough to answer us, and it is one of the major suppliers of company cars in Belgium.
You will hear it, it is the great unknown at the local subsidiary of this large international group, which does not particularly want to adapt its approval procedures planned for 2021 for the small Belgian market.
“Today, we do not yet know if in 2021 we will have both measures (WLTP mandatory and NEDC optional), we have not yet received the confirmation from the factory“, explained Sofie Luyckx, spokesperson for Audi in Belgium.”We do our best to get the best solution for our customers, obviously, but it depends on the parent company“, therefore from Audi headquarters in Germany.
There is no doubt that the Belgian management is doing the pressing to make themselves heard, at the risk of pushing all employees and leasing companies to other brands which would manage to obtain both values on the European certificate of conformity …
There is also no doubt that all the Belgian subsidiaries of the major manufacturers are in the same situation as Audi.
Conclusion, if you have to choose a company car in the next few months, try to do so as soon as possible, before 2021, as the future is a bit hazy.