Income tax addition for private use of company car

Any use an employee makes in a private capacity of the company car that has been made available to him or her calls for an addition to be made to his or her wage, at a standard rate – since 2017 – of 22 percent of the vehicle’s list price. Vehicles having been purchased or leased prior to 2017 come under a modified rate regime, which is available for a maximum of 60 months and on expiry of said term causes the standard addition regime to be reverted to, albeit at a rate of 25 rather than 22 percent for pre-2017 vehicles.

Addition for electric vehicles

The addition to be made for an electric vehicle amounts to 4 percent of the list price. The reduced addition has been curbed with effect from 2019 to the first € 50,000 of the list price, with the surplus (if any) being charged at the regular 22 percent addition rate. The new rule is to apply to all vehicles whose date of initial registration postdates the first of January 2019.

If you are considering to purchase a pricier electric vehicle, you may well want to make the investment before the current year is out in order to continue enjoying the reduced rate of addition on the entire list price for the entire 60 months. Alternatively, given that the reduced addition rate continues to apply throughout the first 60 months of the date of the vehicle’s initial registration, you may wish to consider purchasing a used electric vehicle with few miles on the clock. You would still have this option throughout 2019. This scenario would obviously curb your use of the reduced rate addition regime to the remainder of the original 60-month term.

Check the mileage log

No addition needs to be made to the employee’s (taxable) wage on condition that he or she is able to prove that his or her private use of the company car has not exceeded 500 kilometres during the calendar year in question, by submitting a reconciled mileage log which you, as the employer, are required to check and keep on record as part of your payroll accounts. Inaccuracies in your employee’s mileage log will leave you no choice but to make the appropriate addition to his or her wage. Whether or not use is made of a “no private use statement”, your employee will always have to be able to tender evidence of his or her having stayed within the 500-kilometre range during the year in question.

Dutch version: De bijtelling voor de auto van de zaak