Going on holiday with a company car from Luxembourg: what you need to know
- Lux-Assurances
- 9 hours ago
- 3 min read
Using a company car to go on holiday may seem convenient, but it raises several questions, particularly regarding insurance, taxation and authorised use. If you work in Luxembourg and are planning to hit the road this summer with your company car, here are the essential aspects you need to take into consideration.
Company car vs. service vehicle
A company car is a vehicle made permanently available by the employer, which the employee can use for both business and personal travel (including weekends and holidays). It constitutes a benefit in kind, subject to tax in Luxembourg, assessed according to a flat-rate scale.
A service vehicle is a vehicle assigned to a position or function, often used by technicians, delivery drivers, maintenance workers, etc. Its use is strictly reserved for business trips (assignments, construction sites, etc.). It is often shared between several employees and must remain on the company's premises outside working hours. Its private use is therefore prohibited, unless specifically agreed.
Private use of a company vehicle: is it allowed?
In Luxembourg, private use of a company vehicle is possible, but only if this is provided for in the employment contract or in a specific agreement. This use includes commuting, personal travel and... holidays!
Points to check:
The employer's explicit agreement
The mention of private use in the contract
What does company vehicle insurance cover?
Most company vehicles are insured by the company under a fleet insurance policy or a specific insurance policy. However, this coverage varies from one contract to another.
Details to verify on the car's insurance:
The geographical scope of the cover (some contracts exclude certain countries or areas outside the EU)
The guarantees (assistance, glass breakage, theft, fire, etc.)
Coverage for additional drivers, especially if you plan to share driving duties with your spouse
💡 Tip: Before you leave, request an up-to-date insurance certificate and find details about what to do in the event of a breakdown or accident abroad.
Can you lend your Luxembourgish company car to someone else?
In theory, no, unless the insurance contract or company regulations explicitly allow it. In Luxembourg, company vehicles are assigned to specific employees. They are therefore normally reserved for their exclusive use, unless expressly authorised by the employer and the insurer.
Cases in which another person may drive the company car:
A spouse, adult child or colleague may drive the vehicle on an exceptional or temporary basis, but only if:
The vehicle insurance authorises additional drivers
The company gives its prior consent
The driver holds a valid driving licence
The driver meets the age and experience requirements defined by the insurer
In the event of an accident during the holidays: who is liable?
In the event of an accident, everything depends on the type of insurance contract and the circumstances of the accident.
If private use is authorised and insured, the company's insurance will generally cover the repairs. In the event of unauthorised use, you may be held personally liable for the damage or associated costs.
💡 Important : Remember to always obey local traffic laws, keep your insurance and vehicle documents with you, and contact your company in the event of an unforeseen event.
Before hitting the road with your Luxembourg company vehicle for the holidays, check with your employer and their insurance company. Also remember to check the mandatory safety equipment you must have in your car. Planning ahead is the key to avoiding unpleasant surprises and enjoying your holidays with peace of mind.