What Changes in 2025
The reform of company car taxation in Luxembourg, effective January 1, 2025, radically simplifies the benefit in kind (BIK) calculation. Gone is the complex CO2-based grid — replaced by a two-tier system.
Simple rule: Any vehicle emitting CO2 (thermal, hybrid, PHEV) is taxed at 2.0% of the catalogue price per month. Only 100% electric and hydrogen vehicles benefit from reduced rates.
2025 Rate Table
| Vehicle Type | Condition | Monthly Rate |
|---|---|---|
| 100% Electric | Consumption ≤ 18 kWh/100km | 0.5% |
| 100% Electric | Consumption > 18 kWh/100km | 0.6% |
| Hydrogen | All | 0.5% |
| Thermal / Hybrid / PHEV | All (emissions > 0 g/km) | 2.0% |
How to Calculate the BIK
Monthly BIK = Catalogue Price (incl. VAT) × Rate
The catalogue price is the new vehicle price including 17% VAT, with all options. The new price is always used, even for second-hand vehicles or end-of-lease.
Examples
Diesel SUV — €60,000 incl. VAT
60,000 × 2.0% = €1,200/month
€14,400/year added to your taxable base
Tesla Model 3 — €45,000 incl. VAT (≤ 18 kWh)
45,000 × 0.5% = €225/month
€2,700/year — almost 5× less than diesel
Calculate the impact on your salary
Use our benefit in kind calculator to estimate your exact BIK amount, then simulate the impact on your net salary.
Calculate my benefit in kind