The VAT regime will apply to properties for professional use from 2018. An end to complex tax arrangements by way of tax optimisation? All the details.
It is already the case with our neighbours, but Belgium used to be an exception. From now on, it will be possible to apply VAT to the rental of properties for industrial use. This decision was made by the Michel government when preparing its 2018 federal budget, the famous 2017 "summer agreement".
What will change?
Specifically, the measure will enable property developers to reduce their construction costs. From 2018, they will be able to recover the 21% VAT invoiced by contractors when constructing a property. Until now, as odd as it may seem, this was impossible.
Three aims in sight:
- On the one hand, to make Belgium more attractive from a tax perspective for companies wanting to set up their operational or management headquarters in our country;
- On the other hand, the measure will also entail a simplification of administrative and tax procedures: previously, construction and rental of properties to companies was subject to a series of... tax arrangements;
- Finally, the most eagerly awaited consequence: to lower lease rental costs.
"It allows for lower rental prices due to a significant reduction of charges on building construction and foundation costs. On the other hand, it will no longer be necessary to set up complex tax arrangements for tax optimisation purposes."
Johan Van Overtveldt, Minister of Finance, in charge of Combatting Tax Fraud.
A EUR 500,000 building generates 105,000 in VAT. Currently, VAT at 21% is applied to the company's lease rental. In future, this will be recoverable.
No, the system, which should be emphasised is optional, only applies to new contracts entered into as from 1 January 2018, where a landlord lets a property to a professional tenant. This is clearly a B2B perspective. Trade-off: the individual or the company will be bound to use it for professional or industrial activities eligible for VAT.
Greater flexibility and lower costs thanks to mobility budget
Solving traffic congestion problems will require a broad range of solutions The mobility budget is one of these.
Is there a solution to traffic congestion? Constructing more roads is not the answer, because they will become congested as well before long. How about imposing a toll on freight transport? While this is supposed to reduce the number of lorries on the road, their place will probably be taken by passenger cars. Not only that, but a toll may make delivery vans even more popular than they already are. By 2030, the number of kilometres spent on the road by these vehicles will rise by 43%. The Planning Office estimates that the rise in duty on diesel will do little to combat congestion.
Many experts consider company cars to be one of the main culprits. They believe that the treatment of company cars is far too generous in Belgium. Both the OECD and the European Commission have criticised the tax benefits associated with company cars in our country. "Half the cars on Belgian roads are company cars", people sometimes claim. This is simply not true. The CVO (Corporate Vehicle Observatory) requested the registration figures for the Belgian vehicle fleet from FEBIAC (Belgian Federation of the Car and Two-wheeler Industries):
- Belgium has some 700,000 light commercial vehicles and 930,000 other vehicles (buses, lorries, motorcycles, etc.).
- However, passenger cars actually account for the lion's share of vehicles on the road, at 5.6 million. Of these, 4.48 million belong to private individuals and just 1.12 million to companies and self-employed professionals. It is clear, then, that the latter are not the only culprits when it comes to creating congestion. Abolishing tax benefits for company cars alone will not resolve the issue altogether.
A change of mentality
There is no miracle cure. The solution is like a jigsaw – it has multiple pieces. A change of mentality is required above all else. Perhaps you would like to encourage your employees to choose the most efficient, least polluting and reasonably priced mode of transport for every journey. A mobility budget would make this a possibility in the future. The experts at Arval Belgium, one of the major players in the lease market, are preparing a suitable approach. Els Costers (Sales Director at Arval Belgium):
"The concept is simple. Instead of giving employees a car, parking space, rail pass or rental bike, they receive a mobility budget. This budget enables the employer to set an agreed amount to be spent by the employee on a range of transport options: company car, public transport, bicycle, pool car, etc. The employer specifies the budget size and the means of transport available. The employer and employee also discuss the types of commute that the mobility budget is intended for: commuting to work and professional travel only or private use as well."
The mobility budget has many advantages for employers:
- You are seen as an attractive employer, because you encourage a flexible working environment and you offer your employees freedom of choice and flexible mobility solutions.
- You meet your CSR targets (corporate social responsibility) by stimulating public transport usage and by reducing the number of cars deployed, kilometres travelled and litres of fuel used.
- You lower your TCM (total cost of mobility), because you have more control over your lease vehicles, increasingly pay for use rather than ownership, and reduce administrative burden.
In turn, your employees have more freedom and flexibility when organising their travel. Last but not least, it also benefits the environment. The then Flemish Mobility Minister Hilde Crevits commissioned the Mobility budget works pilot project in 2012. The project showed that employees with a mobility budget decide more often not to use a car in favour of a different mode of transport. Car usage for journeys between home and work fell by 37% among the five companies that tested this system.
The mobility budget is evidently a fantastic system. So why is it not yet being utilised all over the country? Well, proponents of the system are waiting for a new law to resolve a series of legal stumbling blocks, especially with regard to taxation and social security. The bill has already been drawn up. Els Costers:
"Today, it is impossible for an employer to make all modes of transport available to employees. The legal rules are different for professional, commuter-based and private travel, and they also change depending on the means of transport. This makes the administrative side of things highly complex and time-consuming. The mobility budget intersects all of these rules. The new law needs to resolve this. Once it is passed, things can move quickly."
Ready for the mobility budget? Here are a few simple rules to take on board.
To implement a mobility budget, an analysis needs to be made of travel habits and the way in which the organisation functions. This analysis enables you to see which combinations are desirable, feasible and profitable.
Involve social partners when introducing a mobility budget.
The following combinations are now feasible from a tax perspective:
company car and tax-free company bicycle
company car and bicycle allowance
company car and public transport
a smaller or electric car for daily usage with a larger family car for holiday periods. In this case, the benefit in kind must be calculated according to usage.
Focus on maximum flexibility. A package such as Arval Select makes it possible for drivers of lease cars, for example, to use different vehicles depending upon their varying mobility needs.
Vehicle lease companies are also taking on the role of mobility consultants
Vehicle lease company such as Arval Belgium are evolving from pure suppliers into mobility consultants with a broad range of solutions.
What does Arval Belgium, one of the major players in the lease market, still have up its sleeve when it comes to benefiting from the new perspective on mobility? Els Costers, Sales Director:
"We are developing a mobility platform under the name Arval Mobility Link. The platform has three modules. One of these modules is the mobility budget. When this mobility budget's legal framework and uniform tax treatment have been fine-tuned, organisations will need a clear summary of the different methods of transport, prices and journeys.
The second of these is the dynamic lease budget. It is a tool aimed specifically at lease car drivers. Currently, you agree with your lease car drivers on a specific number of kilometres that they are permitted to drive each year, for example 30,000 kilometres. This maximum amount is the same for everyone. If an employee exceeds this limit, they may have to pay for the additional kilometres. If another employee is below this limit, for example 10,000 kilometres, that is unfortunate for them because the salary deduction is calculated on the basis of 30,000 kilometres per year, not on 10,000."
The dynamic lease budget works more fairly. This method is used to calculate the number of kilometres permitted to be travelled per year per employee or group of employees. This figure is calculated based on commuting distance. This means that employees who commute from Limburg to Brussels are no worse off than a colleague who travels from Vilvoorde. An employee who drives fewer kilometres records this in a savings fund, and they can then convert this amount saved into a bonus or different form of incentive. You can impose a levy on employees who spend more time on the road, e.g. 5 cents per kilometre. Employees who car pool receive another bonus. The same applies to drivers who fill up their tank at a cheap petrol station or who adopt an economical driving style.
Els Costers: "We provide the tool and help employers devise an arrangement tailored to their specific requirements. The exact arrangement depends on the targets set by the organisation: managing costs, travelling fewer kilometres, consuming less fuel, reducing CO2 emissions, encouraging employees to take part in a car pool or use other means of transport, etc."
Arval Mobility Link will be rolled out this year. That can happen quite quickly. This is what you need: an arrangement in line with your organisation's targets, a platform on which everything is registered, a black box in the lease car and... an honest employee. After all, the employee has to assign the kilometres travelled to the appropriate category on their laptop or smartphone: commute, professional, or private.
"The black box that we plan to employ for the Arval Mobility Link platform is already in use for the Arval Active Link telematics solution", Els Costers explains. "The device registers the journeys taken by the driver, the speed at which they drive, brake and accelerate, fuel consumption and so on. This can help to make employees aware of their driving behaviour and to encourage them to drive economically, defensively and safely."
Many companies have a relatively limited lease fleet. Nevertheless, they do reimburse travel expenses. The first module under the Arval Mobility Link, the travel allowance module, is designed specifically for employees without a lease car or mobility budget. This tool enables employees' travel expenses to be correctly recorded and reimbursed, explains Katrien Jacobs (business team manager at Arval Belgium):
"In many companies today, reclaiming travel expenses requires a lot of paperwork: employees bring their rail tickets, parking tickets and petrol station chits to the office, where they are then placed in a folder or, in a best-case scenario, entered in a spreadsheet. It can then take months for the requisite amount to be transferred to your employees' accounts. It is not particularly convenient. This tool allows employees to declare their travel expenses online. Furthermore, a link to the organisation's HR platform makes it much easier to reimburse these expenses."
Leasing of cargo vehicles: much more than just financing
Leasing has been dubbed conventional financing for professionals. It is by far the most common means of financing when it comes to machines and rolling stock.
Leasing brings together three parties: carriers, suppliers and leasing companies. The carrier selects their material and a supplier to provide it. They then negotiate with the supplier on the precise conditions and the purchase price. Subsequently, the leasing company will draw up a contract detailing all the features and specificities of the contract agreed upon with the supplier. Here, it is important that the invoice is made out to the leasing company, which will then be responsible for paying for the vehicle upon its arrival.
Then, the carrier pays a monthly leasing fee to the leasing company for use of the vehicle over a period defined in the leasing contract. The carrier may, at the end of the contract, be given the option of purchasing the vehicle at its residual value, which is also agreed upon in advance. However, the carrier may also opt to renew the lease for a new vehicle.
Why choose leasing?
Oxford Economics and Vlerick Management School both conducted a study into financing options. The first was an international study, the second was focused on Belgium. Both studies identified a profile for the type of company that stands to benefit most from leasing machines and/or vehicles: companies that are in the process of growing, are making a profit and invest substantial sums of money.
For them, leasing has a number of advantages. Firstly, the contract is highly flexible. In addition, this is an option that comes with a low administrative burden, and that is no more expensive than other financing solutions. The transporter may also choose whether to declare their vehicle on their balance sheet or not. In Europe, this choice is dependent upon the residual value of the vehicle. If the residual value amounts to more than 15% of the purchase price, the contract will be regarded as a rental contract for which a monthly fee is paid and which is entered into the accounts as a cost. If the residual value amounts to less than 15% of the purchase price at the end of the contract, then the vehicle is regarded as subject to leasing, and must be included on the balance sheet and will later have to be amortised.
And the final two advantages of leasing contracts: they offer customers a real guarantee, and VAT accounting takes place immediately – so the carrier does not have to claim back the VAT later.
From Ostend to Nancy
The importance of leasing in the transport sector should not be underestimated. According to figures from Renta, the umbrella association for vehicle leasing and rental companies, its members have no fewer than 44,000 company vehicles on their books. An impressive sum that becomes all the more impressive when you consider that, if they were all lined up, those vehicles (trucks, trailers, delivery vans, etc.) would form a queue from Ostend to Nancy, in France.
With 13,000 company vehicles, BNP Paribas Leasing Solutions holds a 30% share of the total market, and is therefore a market leader in this segment. And not just in Belgium, but across the whole of Europe.
Indemnité km pour l'utilisation d'un vélo électrique : exonération fiscale sous condition
Les travailleurs qui se rendent au travail à bicyclette peuvent bénéficier d'une indemnité vélo de maximum 0,22 EUR/km. En principe, cette réglementation s'applique également aux vélos électriques, à l'exception toutefois de certains modèles, tels que le speed pedelec.
Le vélo électrique a le vent en poupe : plus d'un quart des bicyclettes vendues sont de type électrique. Dans le même temps, nous sommes de plus en plus nombreux à venir travailler à vélo. L'employeur a la possibilité d'octroyer à son personnel une indemnité vélo exonérée d'impôts à concurrence de 0,22 EUR/km, pour autant qu'il s'agisse d'un vélo électrique « classique » :
- dont la vitesse maximale est de 25 km/h ;
- dont la puissance du moteur n'excède pas 250 Watt ;
- à assistance électrique, le cycliste doit donc pédaler pour avancer (il ne doit pas s'agir d'un moteur autonome).
Les speed pedelecs, exclus de l'exonération fiscale
Cette réglementation avantageuse ne s'applique pas aux speed pedelecs, lesquels constituent en quelque sorte des vélos électriques « de formule 1 ». Ils peuvent en effet atteindre une vitesse de 45 km/h et requièrent, depuis le 1er octobre, le port d'un casque, la détention d'un permis de conduire et la prise d'une assurance.
Précisons toutefois que les navetteurs roulant à speed pedelec peuvent bénéficier d'une indemnité kilométrique de leur employeur, mais celle-ci sera considérée comme un revenu imposable. Le travailleur devra donc payer des cotisations ONSS ainsi que le précompte professionnel. Cette règle connaît cependant une exception lorsque les collaborateurs optent pour une déduction forfaitaire de leurs frais professionnels. Ils ont alors droit à une exonération fiscale de maximum 380 EUR.
Quid des vélos mis à disposition par l'employeur ?
L'employeur peut également mettre des vélos à la disposition de son personnel. Tous les frais qui en découlent, comme les frais d'entretien, sont exonérés d'impôts, à condition que le collaborateur s'en serve réellement pour parcourir ses trajets domicile-lieu de travail (mais il est aussi autorisé à effectuer des déplacements strictement privés). Cette réglementation s'applique uniquement aux vélos électriques classiques. Les speed pedelecs ne permettent (à nouveau) pas de bénéficier de cette exonération fiscale.
(Source : Partena)
- What we know about VAT on properties for professional use
- Greater flexibility and lower costs thanks to mobility budget
- Vehicle lease companies are also taking on the role of mobility consultants
- Leasing of cargo vehicles: much more than just financing
- Indemnité km pour l'utilisation d'un vélo électrique : exonération fiscale sous condition