Company car

Your company car and income tax

If you do not drive more than 500 kilometres per year for private use, your car must be regarded as a company car. If you drive more than 500 kilometres per year privately, you may also choose to list your car privately. You can still drive it for business purposes, but different income tax rules apply.

Private use addition for a company car

Do you use your company car privately for more than 500 kilometres per year? Then you must pay a private use addition (bijtelling, in Dutch). The amount of the addition depends on the value of your car and its CO2 emissions.

The Netherlands Tax Administration automatically calculates the taxable addition in your income tax return. This is a percentage of the list price of your car. That percentage depends on the date of registration of your car. You can look up the list price of your car via the RDW registration number check (in Dutch).

Prove low private mileage with trip registration

With trip registration, you can prove that you have not driven more than 500 private kilometres per year. Then you do not have to pay any private use addition. RitRegistratieSystemen (in Dutch) is an example of this type of system. You can also use your own system. It must contain all the data needed for a complete trip registration.

You can use a simplified trip registration for company vans. This makes it easier for employees to keep track of when the van was used for business and for private purposes.

Addition for the private use of an electric car

Do you drive a fully electric, hydrogen, or solar car? Cars with no CO2 emissions currently have a lower private use addition. Read more about the financial benefits of electric company cars.

Put the value of your company car on your business balance sheet

Do you choose to use your car for business purposes? Then put the purchase value on your company’s balance sheet. You can then deduct the car costs incurred and the annual amortisation, or depriciation in its value every year. The amount that appears annually on the balance sheet is called the book value. Make sure the car is registered in your company’s name. And remember that different rules apply if you use your private car for business purposes.

Deduct your car expenses from your profit

You can deduct all car expenses from your business profit. For example:

• maintenance
• the periodic motor vehicle test (APK)
• parking costs
• motor vehicle tax

Company car and VAT

For VAT purposes, you may choose whether your car is business or private. Even if you declare your vehicle as a company car for income tax purposes, you can keep your car private for VAT purposes (in Dutch). For example, do you choose to count the car as a private asset for VAT? If so, this does not automatically mean that the car also belongs to private assets for income tax purposes. Make sure your choice is clearly stated in your records.

For a company car, you can deduct VAT on the purchase, maintenance, and use (as input tax). Please note, this is only possible for the kilometres you have driven for turnover subject to VAT (in Dutch).

Correct your VAT return if you use your car privately

Do you also use your business car privately? Then you do pay VAT on the private kilometres in the VAT return at the end of the year (in Dutch). Keep in mind that commuting is regarded as private travel for VAT purposes.

There are 3 ways you can calculate how much your private use was:

1. You can choose to keep good records of your trips in a complete trip log. Then you will know exactly how many kilometres you drove privately.
2. Are you not keeping a complete trip log? You can also show the business and private kilometres with other information from your records (in Dutch).
3. If you do not keep a record of private car trips, the Tax Administration will calculate a standard percentage (in Dutch).

To make these calculations easier, use the VAT and the car calculator (in Dutch).

Are you transferring your private car to the company? Then you are a customer and seller at the same time. As a result, you cannot deduct this purchase.

Leasing a company car

Do you want to lease a car for your business? Then you can consider these lease forms:

Operational lease

You lease a car and pay a fixed amount per month for using the car. The leasing company remains the owner. The car is not part of your business assets, so you do not put the value of the car on your balance sheet.

Financial lease

This is a form of credit with which you buy a car in your company’s name. You pay off the loan in instalments. Unlike with operational lease, with financial lease, you can put the car on your balance sheet. In most cases, this entitles you to consider depreciation and interest deduction.