Taxes and deductions for vehicles
If you have a vehicle you will have various types of costs. You can deduct some of these expenses from your income tax. And you can deduct VAT for some costs if you use the car for your business. Find out about vehicle costs and which ones are deductible.
Deducting car expenses for income tax
Do you have a company car? Then you can deduct your car costs from your turnover in your income tax return. Did you buy a car for private use but also use it for business purposes? Then you do not deduct any car expenses. Instead, you deduct a fixed amount of €0.23 per kilometre driven for business purposes.
In the case of a company car, you can deduct these expenses:
Your car has to be insured against third-party liability (WA, Wettelijke Aansprakelijkheid). You can take out insurance against damages to your own car with a casco insurance. You may deduct insurance costs from your (corporate) income tax if you mainly use your private car for your business.
The type of fuel your vehicle uses determines how much motor vehicle tax you pay (mrb). Which type of fuel is most cost-efficient for you depends on, among other things, how many kilometres you drive per year.
Every car needs maintenance, and sometimes repairs. Your car must regularly undergo a periodic technical inspection or PTI (APK in Dutch). Check the website of the Netherlands Vehicle Authority (RDW) website to find out when your car needs a PTI.
Do you own one or more motor vehicles (a car, van, motorcycle, trailer, or truck)? You will have to pay motor vehicle tax, mrb (motorrijtuigenbelasting). The Dutch Tax Administration will send you an assessment automatically. You can calculate how much mrb you have to pay yourself (in Dutch).
If you buy or import a car, a van, or a motorcycle, and have it registered at the Netherlands Vehicle Authority RDW for the first time, you must pay private vehicle and motorcycle tax (bpm, belasting op personenauto’s en motorrijwielen).
Do you drive a truck on the motorway? Besides paying mrb, you will probably also have to pay heavy vehicle tax, bzm (belasting zware motorrijtuigen). The tax is levied on trucks that carry only goods and have a maximum permitted weight of 12,000 kilograms (circa 26,000 lbs) or more.
You may deduct from your income tax investments you make for your company, that last for more than 1 year and cost over €450. A car is such an investment. You do not deduct all the costs at once, but over a period of a number of years. This is called amortisation or depreciation. You list the investment in your tax return under ‘afschrijving’.
You can also deduct the cost of leasing a car from your income tax. Leasing means you rent a car from a leasing company for a certain period of time and for a certain number of kilometres.
Deducting VAT on car costs
You can deduct the VAT on your car expenses in your VAT return. This is possible for both a company car and a private car. These costs must have been incurred for business trips that you made for turnover taxed with VAT (in Dutch). You can deduct the VAT on these car costs:
- purchase costs for a company car
- maintenance costs, such as garage costs
- running costs, such as petrol and insurance
Keep in mind that commuting is not a business trip for VAT purposes, but a private trip.
Do you have a company car? You still have to pay VAT at the end of the year for the private use of your car.
Statistics: number of company cars
This graph shows how many passenger cars are registered in the name of a company or institution.
Questions relating to this article?
Please contact the Netherlands Tax Administration, Belastingdienst