by Lieven Goossens
Benefit in kind for company cars in France
In France, providing company cars to employees is an attractive benefit. When these vehicles may also be used for private purposes, this constitutes a so-called benefit in kind. This benefit is considered part of the employee’s salary and is subject to social security contributions and taxes. The calculation of this benefit's value is governed by specific rules, which distinguish between traditionally fueled vehicles and electric vehicles. As of 1 February 2025, the method for calculating the benefit in kind for company cars has changed. The new rules apply to vehicles made available from that date onwards. Vehicles allocated to employees before this date will remain subject to the old calculation method.
Benefit in kind for company cars in France before 1 February 2025
Flat-rate calculation for traditionally fueled vehicles
The calculation depends on several factors:
Whether the vehicle was purchased or leased;
If purchased: the age of the vehicle;
Whether fuel costs are covered by the employer.
Without fuel costs
Vehicle | Benefit in kind |
|---|---|
Purchased - 5 years old or less | 9% of purchase cost |
Purchased - older than 5 years | 6% of purchase cost |
Leased | 30% of annual global cost (rent, maintenance & insurance) |
With fuel costs
Vehicle | Benefit in kind |
|---|---|
Purchased - 5 years old or less | 12% of purchase cost |
Purchased - older than 5 years | 9% of purchase cost |
Leased | 40% of annual global cost (rent, maintenance & insurance) |
Note: For leased vehicles, the benefit is capped at the amount it would represent if the vehicle had been purchased. The theoretical purchase value is used for this calculation. Therefore, a double calculation is required: based on the total annual leasing cost, and according to the rules applicable to a purchased vehicle.
Flat-rate calculation for electric vehicles
For electric company cars in France, the same calculation method applies, but with an attractive 50% reduction (capped at €2,000.30 per year*).
Additional benefits:
Charging costs for private use paid by the employer are not included in the calculation;
The installation costs of a home charging station are also exempt (at least until 31 December 2027).
*Amount for 2025
Calculation based on actual costs
Employers may also choose to calculate the benefit based on actual costs. This calculation takes into account, among others:
Purchase or lease costs;
Insurance;
Maintenance;
Depreciation.
The ratio of private use to the total number of kilometers driven is then applied to this total. Fuel costs for private use covered by the employer are added to this amount.
New rules from 1 February 2025 for company cars in France
Flat-rate calculation for traditionally fueled vehicles
From 1 February 2025, higher percentages apply for vehicles running on traditional fuels.
Without fuel costs
Vehicle | Benefit in kind |
|---|---|
Purchased - 5 years old or less | 15% of purchase cost |
Purchased - older than 5 years | 10% of purchase cost |
Leased | 50% of annual global cost (rent, maintenance & insurance) |
With fuel costs
Vehicle | Benefit in kind |
|---|---|
Purchased - 5 years old or less | 20% of purchase cost |
Purchased - older than 5 years | 15% of purchase cost |
Leased | 67% of annual global cost (rent, maintenance & insurance) |
For leased vehicles, a double calculation must still be performed (total leasing cost vs. theoretical purchase value).
Flat-rate calculation for electric vehicles
From 1 February 2025, an even more favorable regime applies to electric company cars in France, provided the vehicle meets the required environmental score to qualify for the ecological bonus. The reduction is increased to 70% of the benefit in kind (capped at €4,582 per year*).
An overview of vehicles eligible for the ecological bonus can be consulted on an official government list. The environmental score is determined based on the vehicle’s carbon footprint.
Charging costs covered by the employer remain excluded from the calculation of the benefit in kind.
*Amount for 2025
Calculation based on actual costs
The method for calculating based on actual costs remains unchanged.
Conclusion
The new rules on the benefit in kind for company cars in France strongly promote electric mobility. Both employers and employees can enjoy significant tax advantages when choosing electric vehicles.
👉 Do you have any questions about company cars in France? Or are you planning to hire staff in France? Feel free to contact our experts. They will be happy to assist you!
This form can only be sent with the use of technical cookies. You can accept these cookies here.
These cookies are used to distinguish people from bots. Certain data, such as your IP address or language preference, can be sent to Google. More information in our cookie policy.
Lieven Goossens
Team Manager Social Legal lieven.goossens@vdl.be
Disclaimer
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.
News and insights
Read our latest insights and news releases to stay abreast of changes in your industry.
