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Company car

This information is provided by:Tax and Customs Administration, BelastingdienstTax and Customs Administration, BelastingdienstLast updated on Nederlandse versie

If you have a company car, it has consequences for your income tax and VAT. If you use your business car privately, you will pay a private use addition (bijtelling).

Check how much added taxable income rate you will have to pay

Do you use your company car for private purposes for more than 500 kilometres per year? Then you must pay a private use addition (bijtelling, in Dutch). The addition for the private use of a car is a percentage of the list price.

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.

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.

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, and motor vehicle tax. Do you also use the car privately? Then you can only deduct the costs for the part you use the car for business purposes.

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.

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 deprication 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.

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.

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