Driving a company car in the Netherlands

On April 11, 2016 by Dutch Umbrella Company

Depending on the job or function you have you may be driving a car provided by your employer. A company car, or take-home vehicle, is a car which companies lease or own and which their employees can use for personal and business travel.

Fiscal addition for a company car

If your employer provides you with a company car which you may use for private purposes as well, the gain obtained from that private use is considered as taxable wages. This means your employer has to add this additional tax to gross to net.. This rule goes into effect when the annual private use exceeds 500 kilometers. How high this fiscal addition is depends on the value of the car and it’s CO2 emissions. You’re required to pay all taxes over the fiscal addition, which means you will receive less net wages.

The rules regarding the amounts of the additional tax have changed from 2016, and are now the following:

  • 15% added for CO2 emissions from 1 to 50 grams/km
  • 21% added for CO2 emissions from 51 to 106 grams/km
  • 25% added for CO2 emissions higher than 107 grams/km

These percentages only apply to new cars; if the car was registered before 2016 the amounts of fiscal addition may vary. If you’re in doubt about the height of the fiscal addition that applies to the car you drive in, be sure to check with the Tax Authorities. Another option is that you let us know the license plate number, so we can check the necessary details with the Dutch RDW administration.

Your contribution and extra costs

If you and your employer agreed upon any contribution to private use you pay from your wages, this contribution will be deducted from the additional tax. You only pay taxes over the deducted percentage.. If your employer provided you with a vehicle that you only use for work purposes, you simply need to file a declaration form from the Tax Authorities, and your employer is does no longer add the additional tax.. The same rule applies to rental cars; if the vehicle is strictly being used for business purposes no additional tax will be calculated.

It could very well be that you have some doubts or questions after reading this. How much is the additional tax for your company car? When does private use become use for business purposes? You can ask WePayPeople everything you need to know, contact us on +31 (0)20 820 1560 or at duc@wepaypeople.com.