The fiscal and taxation session of the 2016 Global Fleet Conference painted a picture of regulatory fragmentation.
“Company car taxation has a great impact on TCO”, said Erwin Boumans at the start of the Global Fleet Conference's second session. Of course, he meant to say: a big impact. As Boumans would make clear, car taxes are not only inevitable, they are furiously unpredictable, even if a few general conclusions can be drawn from the fractuous global tax landscape.
For example: “The continued 'greenification' of company car taxation, as more and more countries basing taxes on CO2 emissions”, said Boumans, Partner, Tax and Legal Services at BDO. “Following 'Dieselgate', even NOx emissions could start to be taxed more heavily, making diesel increasingly expensive”.
But that's about as specific as one can get, from a global perspective. The national differences are just too great. “Some countries don't even have specific car taxes, or limited ones. If they do, they're not necessarily linked to CO2. And as for incentives for alternative powertrains, if they exist, they range widely from country to country”.
The main question, from a global fleet management perspective: “How do you manage the company car tax situation globally if the specific car taxes are determined locally, and change so often?”
Indeed, as Boumans pointed out, regulatory fragmentation is only part of the problem. “In my view, the main problem is that policy makers have a short-term vision on company car taxation. They only think about the next budget round, or the next election cycle”.
The problem is of particular importance when it comes to electric vehicles and other alternatives, which often depend for their success on tax exemptions or outright subsidies. When governments tinker with those policies, it often makes the difference between success and failure for the entire, fledgling sector.
That issue extends to formulas such as mobility packages: “The tax status of these new solutions is often still unclear in many countries. If they are taxed as part of the salary, the cost could easily be higher than the car tax”. Which would put an end to that innovative option.
In the often confusing conjunction of new business models, updated accounting standards, and local and fast-changing tax situations, the only general advice Boumans can offer is to remain vigilant, flexible and informed: “If you have a global framework for company car taxation, don't be too strict with it; the variety of local tax systems is such that this simply will not work”.
| 07/06/2016 | Frank Jacobs