Company-car benefit in kind
Taxable benefit arising when an employer provides an employee with a vehicle for permanent private use, valued at a flat rate or on actual costs.
Definition
A company-car benefit in kind (avantage en nature véhicule) arises when an employer places a vehicle at the permanent disposal of an employee who may use it privately: evenings, weekends, holidays. That provision is a component of pay: its value is added back into the social-contribution base and into the employee’s taxable income, under the rules set by the BOSS (Bulletin officiel de la Sécurité sociale, France’s official social security bulletin).
In detail
Two valuation methods coexist. The actual-cost method adds up the expenses actually borne by the employer (depreciation or lease payments, insurance, maintenance, fuel where applicable), prorated to private use. It is precise, but heavy to document. The flat-rate method, the most common in fleets, applies a percentage to the cost of the vehicle.
The flat-rate scale was thoroughly revised for vehicles made available from 1 February 2025 (URSSAF scale):
- Purchased vehicle: 15% of the purchase cost, reduced to 10% if the vehicle is more than 5 years old.
- Leased vehicle (LLD or LOA, France’s long-term lease and lease-purchase formulas): 50% of the total annual cost, raised to 67% when the employer also pays for fuel.
The 100% electric vehicle keeps a favourable regime: if it reaches the environmental score required for the bonus écologique (France’s EV purchase incentive), the same scale applies after a 70% rebate, capped at €4,641.60 per year (2026 cap), and electricity paid by the employer is excluded from the calculation. This gap in treatment weighs directly on the petrol-versus-electric arbitration for a company car. We detail it in our article on the electric-vehicle benefit in kind.
Not to be confused with the taxation of the vehicle itself: the company vehicle tax is owed by the business, whereas the benefit in kind bears on the employee’s pay. The recovery of VAT on fuel likewise follows its own rules.
Frequently asked questions
How is the benefit in kind of an electric vehicle valued?
Under the same scale as a combustion vehicle, but with a 70% rebate capped at €4,641.60 per year (2026 cap), provided the vehicle reaches the environmental score required for the bonus écologique. Electricity paid by the employer is also excluded from the calculation, which substantially lowers the taxable value compared with an equivalent combustion model.
Is there a benefit in kind on a pool (service) vehicle?
In principle, no. A service vehicle is reserved for business trips and returned outside working hours: with no private use, there is no benefit in kind. The employer must nonetheless formalise the ban on personal use in writing; a mere tolerance for home-to-work commutes remains regulated and must be documented.
Related terms
- Company car: the provision with private use that triggers the benefit in kind
- Mileage allowance: the alternative to a provided vehicle when the employee uses their own
- VAT on fuel: the recovery regime specific to fuel paid for by the company
