Income tax
If you choose to keep your car as a private vehicle and make occasional business use of it, you cannot deduct any car-related costs from your company profit. You can deduct company use of the car at 19 eurocents per kilometre.
VAT
You are allowed to deduct the VAT you pay on car fuel and maintenance from your company profit, insofar as you use the car for VAT-charged turnover. VAT on costs incurred with private use, or VAT-exempted turnover, cannot be deducted. Also, bear in mind that you will have to pay VAT for the private use of your car at the end of the year. Commuting form home to work counts as private use. Having read all this, you’ll understand that it is a good idea to keep a record of the amount of kilometres driven privately vs. professionally. You can find an example of VAT-calculation (in Dutch) for business use of a privately owned car on the website of the Dutch Tax and Customs Administration.
Keep track of your kilometres
An accurate registration of your driven kilometres enables you to prove how many kilometres you have driven privately and how many for business use. There are several Tax Administration-approved registration systems you can use, so-called RitRegistratiesystemen, of which you’ll find a list on the Keurmerkritregistratiesystemen website. You can also use a system of your own choice or making, but be aware that it has to contain the same data to provide an accurate registration. If you don’t keep track of your kilometres, the amount of VAT you will pay will consist of 1.5% of the car’s catalogue value, including VAT, and bpm (private motor vehicle and motorcycle tax).
Employees driving their own car
If your employees use their cars for company purposes, you may pay them an allowance free of tax and social security contributions of no more than €0.19 per kilometre. You may also pay your employee this allowance for commuter travel. You may not deduct the VAT on the purchase price or repair costs of this car.
