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Company car leasing or buying: which should you choose in 2026?
Finance lease, operating lease or outright purchase through your company: balance sheet, depreciation, VAT and deductibility compared to choose the right financing in 2026.
For a Belgian company, financing a vehicle comes down to four options: paying cash, a bank loan, a finance lease and an operating lease (renting). The advertised monthly payment or interest rate only tells part of the story: what really sets these options apart is how they are treated for accounting and tax purposes — recognition on the balance sheet, depreciation, VAT recovery and deductibility of costs. Here is how to decide between them.
Paying cash: simple, but heavy on cash flow#
The vehicle is recorded as an asset on the balance sheet and depreciated on a straight-line basis over 5 years if it is new. For a used car, depreciation follows its remaining useful life: 4 years for a vehicle up to 2 years old, 3 years up to 4 years old, with a floor of 2 years.
On the VAT side, the company pays 21% on purchase (new vehicle or professional seller) and can recover part of it — capped at 50% for passenger cars, even if business use exceeds that threshold. A used car bought from a private individual carries no VAT, so there is nothing to recover.
The advantage: no financing cost. The drawback: the cash is tied up in one go, which can weigh on working capital.
Bank loan: keep your cash, deduct the interest#
The accounting treatment is identical to a cash purchase — asset on the balance sheet, depreciation over 5 years for a new car. The difference: the company repays a fixed monthly instalment and pays interest.
Good news on the tax side: loan interest is 100% deductible. It escapes the CO2-related limitation that applies to other car expenses. And if the vehicle is sold before the end of the loan, the balance is repaid: no further interest accrues.
Finance lease: ownership at the end of the contract#
In a finance lease, the purchase option is less than 15% of the vehicle's value. The accounting consequence: the vehicle is capitalised on the company's balance sheet and depreciated over 5 years, exactly like a purchase.
The lease payments are not expenses: they are repayments of capital. VAT on the acquisition remains recoverable, with the same 50% cap. At the end of the contract, the company exercises the purchase option and becomes the owner.
Operating lease (renting): all-inclusive, off balance sheet#
Here, the vehicle does not appear among the assets: there is no depreciation. Monthly lease payments go straight into deductible operating expenses — but subject to the vehicle's CO2 deductibility rate. There is no purchase option, and no recoverable VAT on a purchase, since the vehicle is never bought.
The lease payment often includes maintenance, tyres and insurance: convenient for a predictable budget, but always compare the full lease payment with the total cost of ownership (TCO) of an equivalent purchase.
The comparison table#
| Aspect | Purchase (cash or loan) | Finance lease | Operating lease |
|---|---|---|---|
| Asset on the balance sheet | Yes | Yes | No |
| Depreciation | Yes (5 years, straight-line) | Yes (5 years, straight-line) | No |
| Lease payments as expenses | Not applicable | No (repayment) | Yes (deductible OPEX) |
| Recoverable VAT on purchase | Yes (50% cap) | Yes (50% cap) | No |
| Purchase option | Direct ownership | Yes | No |
| Interest 100% deductible | Yes (loan) | Not applicable | Not applicable |
Deductibility, the deciding factor in 2026#
Whatever the financing method, depreciation or lease payments remain subject to the vehicle's tax deductibility rate. For a combustion-engine car or a plug-in hybrid ordered after 1 July 2023, that rate shrinks year after year: 75% in 2025, 50% in 2026, 25% in 2027 and 0% from 2028. An electric car ordered before 2027 remains 100% deductible.
The tax shield is then calculated at the corporate income tax rate: 25% (or 20% for SMEs on the first €100,000 of profit). In other words, €10,000 of costs that are 50% deductible now yields only €1,250 in tax savings.
Do not forget the NSSO CO2 solidarity contribution: it is due for every company car made available, whatever the financing — but it remains 100% deductible. And if the vehicle is made available to a director or an employee, the benefit in kind (ATN) comes on top, again regardless of the financing.
So, which should you choose?#
- Paying cash: comfortable cash position, electric vehicle, long ownership. Zero financing cost, recoverable VAT.
- Loan: you keep your cash and the interest is 100% deductible, outside the CO2 limitation.
- Finance lease: you want ownership in the end while spreading the outlay, and still recover the VAT on the acquisition.
- Operating lease: all-inclusive budget, off-balance-sheet commitment, rapid fleet turnover. It is also the clearest option for a combustion-engine car nearing the end of its deductibility, since depreciation is borne by the leasing company.
For a combustion-engine car ordered today, the real question is no longer "leasing or buying" but "combustion or electric": with deductibility falling to 0% in 2028, the financing method will never make up for the lost tax shield. AutoCalcul models all four options with the interest actually accrued and the extra cost of leasing; the comparison tool shows the same vehicle bought and leased, side by side.
Tax rules change — check the legislation in force.