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If you run a company in the Netherlands, you or your employee may use a company car. If you use this car privately, this may have fiscal consequences for the payroll tax and the turnover tax (VAT). This is called the added taxable income rate (bijtelling).
Consequences private use
When you as business owner drive a company car, the car is part of your business assets. You must settle any private use with the car costs of your company.
Consequences private use for employees
If your employee uses a company car for private purposes, you must add a sum to the their wages before tax (private use addition). After all, they benefit from this private use. The addition comes down to a certain percentage of the value of the car, depending on the CO2 emission of the car involved.
Exemption: annual 500 kilometre limit
If your employee's private use of the company car does not exceed the annual 500 kilometre limit, no addition is required. However, they must be able to prove this with complete records of all kilometres travelled with the car.
Consequences for VAT
If the car has been available to you free of charge, you pay VAT on the actual private use of the car. For this purpose you must keep a kilometre record. If you do not keep such a record, you must set the VAT with regard to the private use at 2.7% of the list price of the car, including VAT and private motor vehicle and motorcycle tax (bpm).
Designated contact company car
You can submit questions about the private use of a company car in writing to the National Car Coordination Centre (Landelijk Coördinatiecentrum Auto), Postbus 843, 7600 AV, Almelo or call 0800- 0543.
Private use of a delivery van
If you or your employee only use a delivery van for business purposes, you must declare this to the Dutch Tax and Customs Administration (Belastingdienst) with the Declaration solely business use delivery van (Dutch). It is not necessary to keep a kilometre record. If you want to settle the VAT on the basis of the actually covered kilometres, in some cases you do have to keep a kilometre record.
Private use of a driving school car
Driving school owners who drive less than 500 kilometres privately per year with their driving school car, must include the car in their business assets. If they drive more than 500 kilometres privately per year, they have to decide whether they consider it to be part of their private assets.
If your driving teacher drives less than 500 kilometres privately per year with your driving school car, they can keep a simplified kilometre record. By doing so, they prevent an addition for tax purposes due to private use of a company car.
Private use of a company car in the automobile sector
Employees in the automobile sector often use company cars alternately. The (Dutch-language) ‘Guide to Added Amounts for Private Use of a Company Car in the Automobile Sector' describes how employers in the automobile sector can determine the additions for private use of a company car.
Prinsjesdag (Budget Day) 2019 announcement
On Prinsjesdag (Budget Day) 2019, the Ministry of Finance announced that there will be a gradual increase in the added taxable income rate (bijtelling) for electric company cars. This also applies if you lease an electric car. The added taxable income rate for electric cars is to increase in 2020 from 4% to 8% over the price of a new model. If the price is over €45,000, then the rate is 22%. After 2020, the added taxable income rate will increase gradually.
The government wants electric cars to become more attractive and affordable for everyone in the long term. For this reason, fiscal measures will continue to stimulate the use of electric company cars above that of cars that run on petrol or diesel.
The Ministry also announced a measure to stimulate the use of lease bicycles, instead of or combined with a company car. From 2020, it will be possible to both drive a company car and a company bicycle. The employee will no longer have to keep track of the private kilometres made on the bicycle, but will have to add 7% over the price of the (new model) bicycle to their taxable income over a period of several years.
These measures are expected to come into force from 1 January 2020. This is subject to their acceptance by the upper and lower houses of parliament.