Tax levy and the car

Tax levy and the car

The Dutch Tax Authority has always been very interested in the car. In this article we will be updating you about:

  • the employee with a lease car;
  • the entrepreneur with a company car.

acconavm can give you advice on all questions and/or problems related to the taxation of cars.

Staff with a lease car

 If your business employs employees in the Netherlands and provides them with a lease car, this will impact your employees’ salary. The salary of your employees on which income tax is calculated is increased by a percentage of the listed value of the supplied lease car. This is called: addition. The Tax Authority feels that the fact that the employee can use the car outside of office hours constitutes wages in kind. There are ways to prevent the extra income tax levy. Please feel free to contact us about this.

In addition to the addition for income tax purposes, BPM and road tax may also be payable when you provide your employees with a car with a foreign registration. More information is available under the heading: BPM and road tax.

Entrepreneur and company car

 If you are a sole trader or are running a general partnership, you can put the car in the name of your company or have a private car. If you put your car in the name of your company, you can deduct all costs in respect of your car from your profit. At the same time, the Tax Authority will increase your profit with a flat-rate amount because you can use the car for private purposes as well. When you choose to have a private car, you can charge the company € 0.19 per kilometre you drive on company business. However, the fuel costs, maintenance cost, depreciation etc. will be private costs. If you would like to know the most profitable option for you, we can easily calculate the turning point for you. We would have to know the number of kilometres you will drive and the type of car. Ask your acconavm account manager or send an email to international@acconavm.nl and we will contact you.

Please note! It is also possible to put your car in the name of the company just for turnover tax purposes. In that case, you can apply for a refund of the turnover tax on all expenditure for your car. We will be happy to give you more information about this.

BPM (Private Motor Vehicle and Motor Cycle Tax) and road tax

Anyone using a car in the Netherlands is subject to BPM (Private Motor Vehicle and Motor Cycle Tax) and road tax. BPM is a one-off tax payable when you buy a new car or when a car with a foreign registration is used in the Netherlands for the first time. The level of the BPM payable depends on the CO2 emission of the car.

In addition, each month or quarter road tax is payable for cars used in the Netherlands. The level of the road tax depends amongst others on the type of fuel and the weight of the car.

In some cases you can get an exemption from BPM and road tax. If you have to submit a return for BMP and/or road tax, please contact us to check whether you may be eligible for an exemption. This will prevent you from paying too much. For further information please use the advice form below or send an email to international@acconavm.nl and our international experts will contact you.

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