Tax benefits for users of company cars: How do they affect the cost of ownership for the employer?

I present a cost of ownership (from the perspective of the employer) analysis of leased company cars sold in Belgium in 2023, both before and after taxes. The preferential tax treatment given to company cars with low CO 2 emissions has a large impact on the distribution of the cost of ownership of electric cars and of gasoline plug-in hybrid cars. The taxation of the benefit-in-kind enjoyed by employees who can use a company car for private purposes allows companies to lower the wages offered to employees. The integration of these wage savings in an extended cost of ownership concept leads to a large improvement of the relative position of plug-in hybrid vehicles (PHEVs) compared to all powertrains, including electric cars. Given the relatively low environmental benefits of PHEVs in real world driving circumstances, this raises the question of the budgetary costs of the current system.