Question 1

What is the ATN (avantage en nature) for a company car in Luxembourg?

Accepted Answer

The ATN is a monthly percentage of the car's new list price (including VAT and options) added to your taxable income. Since 2025 the rate is 2% for petrol, diesel, hybrid and plug-in cars. Eligible electric and hydrogen vehicles pay 0.5% (≤ 18 kWh/100 km) or 0.6% (> 18 kWh/100 km) under the transitional regime; the standard electric rates are 1.0% and 1.2%.

Question 2

Is a company car worth more than a cash allowance?

Accepted Answer

It depends on your marginal tax rate. A cash allowance is taxed in full like salary, while a company car only costs you the tax and social contributions on the ATN — with the employer covering lease, insurance, fuel and maintenance. At typical Luxembourg salaries the car often wins, but a high allowance or low running costs of your own can flip it. This calculator compares the actual net outcome of both options.

Question 3

Does my own contribution reduce the taxable ATN?

Accepted Answer

Only a fixed monthly contribution towards leasing or maintenance costs reduces the taxable ATN, and it is capped at 20% of the employer's lease cost net of your contribution (Circulaire L.I.R. n° 104/1). Variable costs you pay yourself, such as fuel, do not reduce the ATN.

Question 4

Which electric cars keep the reduced 0.5%/0.6% ATN rate?

Accepted Answer

Vehicles first registered by 31 December 2026, or first registered in 2027 under a contract signed by 31 December 2026. Outside the transitional regime, electric vehicles are taxed at 1.0% or 1.2% per month depending on consumption.

Company Car vs. Salary Allowance