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. That way, you pay less tax.
- Did you buy a car for private use and 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 2026.
- Commuting counts as business costs for income tax purposes.
Deductible car expenses for a company car
You must have third-party liability insurance for your car (WA, Wettelijke Aansprakelijkheid). You may deduct insurance costs from your (corporate) income tax if you mainly use your private car for your business.
You can take out insurance against damages to your own car with a casco insurance.
The type of fuel your vehicle uses determines how much motor vehicle tax you pay (MRB). If your vehicle is electric, you will pay less 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 also undergo a periodic motor vehicle test (APK) once a year. Check the website of the Netherlands Vehicle Authority (RDW) website to find out when your car needs an APK.
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 the motor vehicle tax you owe (in Dutch) at belastingdienst.nl.
Note: Motor vehicle tax will be temporarily reduced for vans and trucks from 1 July 2026 to 1 January 2027.
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? And does the truck carry only goods and have a maximum permitted weight of 12,000 kilograms (circa 26,000 lbs) or more? Besides paying mrb, you also have to pay heavy vehicle tax (BZM, belasting zware motorrijtuigen).
Note: on 1 July 2026 the BZM will be replaced by the Heavy goods vehicle levy on trucks (truck toll, or vrachtwagenheffing) . And you will pay less motor vehicle tax.
You cannot usually deduct the purchase cost of your car from your turnover in a single go. This is because a car lasts longer than one year and usually costs more than €450 (investment). Instead, you depreciate these costs. This means you spread the costs over the years that you use the car. In your income tax return, you declare the costs as ‘depreciation’ (afschrijving). Does the car cost less than €450? If so, you can deduct the full amount in a single year.
You can also deduct the cost of leasing a car. When you lease a car, you either hire it (operational lease) or buy it (financial lease) from a leasing company for a specific period and for a specific number of kilometres. You can deduct the leasing costs, or the depreciation and interest costs (in the case of a financial lease), from your turnover.
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 (only for a company car)
- maintenance costs, such as garage costs
- running costs, such as petrol and insurance
Commuting is not a business expense for VAT purposes, but private.