Annulment of discriminatory “cash for car”-law probably without much impact


5 years ago, Belgium introduced the so-called "cash for car", giving employees the possibility to exchange their company car for tax-friendly extra cash. The goal of the law was to reduce traffic jam and air pollution by reducing the number of company cars (reportedly around 15% of all cars registered in Belgium).

Even before the law was adopted, the Council of State held that the means of achieving the law's aim were not appropriate or proportionate and that the law -if adopted- would be discriminatory. Not surprisingly, the Constitutional Court annulled the law in its decision in the beginning of 2020.

The practical impact for employers of the Constitutional Court's decision seemed fairly limited as well. In a timeframe of about one year, reportedly 0.06% of the total number of company cars had effectively been exchanged for extra cash (an equivalent of about 500 cars).