Luxembourg Company Car Taxation
In Luxembourg, personal use of a company car is a taxable benefit in kind. The annual BIK is calculated as a percentage of the vehicle's catalogue price, with the rate depending on CO2 emissions.
CO2 Emission Rates (ACD 2026)
- 0 g/km (Electric): 0.5% of catalogue price
- 1–50 g/km (PHEV): 0.6%
- 51–100 g/km: 0.8%
- 101–130 g/km: 1.0%
- 131–150 g/km: 1.2%
- 151–170 g/km: 1.5%
- 171–200 g/km: 1.7%
- 201+ g/km: 1.8%
FAQ
How is company car benefit in kind calculated in Luxembourg?
BIK = Catalogue price × CO2 emission rate. The CO2 rate ranges from 0.5% for electric vehicles to 1.8% for vehicles emitting over 200 g/km. The BIK is added to your taxable salary and taxed at your marginal income tax rate.
What is the BIK rate for electric company cars in Luxembourg?
Electric vehicles (0 g/km CO2) have the lowest BIK rate of 0.5% of catalogue price annually. For a €50,000 electric car, the annual BIK is €250, resulting in minimal additional tax.
Do employers benefit from lower CO2 cars?
Yes. Employers can deduct a higher percentage of costs for low-emission vehicles. Electric and PHEV company cars are incentivised through the BIK system to reduce the tax burden on employees.
Does driving a company car for personal use affect my Luxembourg tax?
Yes. Any private use of a company car creates a taxable benefit in kind, regardless of the actual distance driven privately. The entire catalogue price is used to calculate the BIK.