Mobility budget and cash for car
With the mobility budget and the cash for car scheme the Government is promoting other means of transport than the company car. Cash for car is already approved by Parliament. The government has internally agreed on the mobility budget. But the Chamber still has to agree with the concrete rules.
Difference between cash for car and mobility budget
Cash for car, also called mobility allowance, does literally what it says. It makes it possible for employees to exchange their company car for salary in cash.
The mobility budget is similar, but is not the same. The mobility budget provides employers and employees with more possibilities. The employee can divide his budget over different means of transport: a company car, public transport, bike. The budget is based on the total cost of ownership for the employer of the employee's company car.
The mobility budget in three steps
Step 1: you exchange your company car for an environmental friendly one. This car has a lower CO2 emission. The taxable benefit in kind of this car is lower. You still have budget for other means of transport. For the employer these costs remain deductible in function of the CO2 emission.
Step 2: besides the car, you use also other more sustainable means of transport, e.g. public transport or bike. This is an advantage for both you and your employer: these means of transport are tax exempt for you and fully deductible for the employer. Example: you drive with your car to the station and take the train to work.
Step 3: you did not use the full mobility budget (after environmental friendly car + use of other means of transport). You receive the balance in cash which is subject to social security contributions.
It is an optional scheme. Both for employers and employees. Employers are not obliged to offer this scheme. You have as employee the choice to opt for the scheme or not.
Employers should have a company car policy for at least 36 months. For starters, other conditions apply.
You only are entitled to a mobility budget when you already have a company car.