Optimize the amount of the benefit in kind and benefit from the purchase option at the end of the contract! Strong discounts dedicated to new stock vehicles.

The provision of a company car (eg leased by the employer) is a common practice in Luxembourg and is part of the remuneration policy of many employers. The provision of a company car to an employee for his professional and private trips constitutes a taxable benefit in kind as income from paid employment and is subject to social security contributions. The purchase by the employee of a company car (leased with option to buy) at a price lower than the market price also constitutes a taxable benefit in kind as income from salaried employment and is subject to the social security contributions. Persons concerned Any resident or non-resident employee who has a company car used for personal purposes is concerned. 1. Practical case of the flat-rate method to assess the benefit in kind. The benefit in kind is assessed at a flat rate of 1.5% per month of the replacement value of the vehicle, (options and VAT included) less, where applicable, the discount granted by the seller. The assessment of the benefit in kind is the same for used cars. Example: Vehicle catalog price: 30,000 Eur VAT included - Strong discount granted by the seller for a new vehicle in stock: ex. - 6.000 Eur VAT included (discounts are often around 20% to 30%) Purchase price of the vehicle in new condition 24,000 Eur VAT included Monthly taxable benefit in kind: 1.5% x 24,000 = 360 Eur 2. Practical case of a buyout by the employee of a company car. The repurchase by the employee of a company car (leased with option to buy) at a price lower than the market price constitutes a taxable benefit in kind and is subject to social security contributions. The tax base of the benefit in kind corresponds to the difference between the market value of the vehicle at the time of redemption and the price paid by the employee. The valuation of benefit encounters the problem of determining the market value of the vehicle in question. In view of the various factors likely to influence this assessment, but above all for the sake of tax fairness, the Luxembourg tax administration recommends a simplified method. Example: Purchase price of the vehicle in new condition: 24,000 Eur (VAT and options included, minus the discount granted by the seller) At the end of the leasing contract, the employer assigns the right of purchase option to the employee who has had the benefit of making the vehicle available for 4 years. At the end of the lease contract, the vehicle in question has a market value corresponding to 35% of the purchase price (24,000 x 35% = 8,400 Eur). Repurchase price paid by the employee (generally 10% of the price of the vehicle in new condition in financial or semi-operational leases): 2,400 Eur The benefit in kind would be 6,000 Eur (8,400 Eur - 2,400 Eur). This amount is subject to withholding tax on wages and social security contributions as income from salaried employment. Easy Lease offers you, through its network of regional and inter-regional garages, new vehicles of all brands and models at high discounts!