Private use company car

Addition for private use

When a car is part of the business assets and this is used for private means as well, you must add the amount to your fiscal profit. This is also called the addition (Dutch: bijtelling). This addition is a percentage of the catalogue value and is dependent of the CO2 emission and the age of your car.

The addition for the private use does not apply when the car is not used for more than 500 kilometres annually. This must be verified by registering all your drives in a logbook. Important in this is that all commutes are considered business related.

Stricter control Tax Authorities

It can be beneficial for the fiscal profit when the private use of a car does not exceed 500 kilometres. Because, if the final kilometre administration can demonstrate that the car has been used privately for less than 500 kilometres in a year, no addition will need to be paid. It makes sense that an entrepreneur does not want to exceed this limit.

The Tax Authorities are stricter in their control of the private use of cars lately. This is to prevent misuse of the  500 kilometre limit regulation. For example, they are conducting license plates inspections at amusement parks and furniture malls. It has also recently come to light that the Tax Authorities are requesting parking information, which has led to some discussion.

Preventing addition

Because the Tax authorities are becoming more and more strict in regard to the private use of cars, it is in the benefit of the entrepreneur to register that the limit has not been exceeded.

Declaration exclusive corporate use delivery van

When a delivery van is part of the business assets. ‘Declaration exclusive corporate use delivery van’ (Dutch: Verklaring uitsluitend zakelijk gebruik bestelauto’) can be submitted with the Tax Authorities. The benefit of this declaration is that the advantage of private use does not need to be taken into account. Furthermore, a logbook is not required in this case.

There are some conditions however:

-The delivery van may not be used for private purposes

-Changes in the use of the delivery van must be reported with the Tax Authorities as soon as possible.

Continuously changing use delivery van

Generally the normal regulation for private use applies for each delivery van. However, there is an exception when two or more employees use a delivery van continuously and changing  because of the nature of the work. This is the case when the employees use the vans at random.

Example

In an enterprise seven employees use four delivery vans. With a notification, they use one of the available vans randomly.

No continuously changing use delivery van

In an enterprise two employees each use a separate delivery van. They agree to change cars each period.

The advantage of the continuously changing use delivery van is that no logbook will need to maintained and no addition will need to be paid. The downside is that the employer will need to pay €300,- as a final levy. However, this saves a lot of administrative burdens.

Restriction private use

When a lease car is made available for an employee, the addition can be prevented be means of a restriction on private use. It is agreed with the employee that the company car is only used for business means. It must show whether or not the employees are upholding the agreement by checking, among other things, the logbook administration of the drives, the amount of used fuel and traffic penalties. If not, a penalty can be imposed.

The Tax Authorities have recently published a new example agreement on the restriction of private use. You can download it here. However, the example is only in Dutch. If you have questions regarding the example agreement, you can contact us at info [at] lupacompany.com. Of course an own agreement can be used besides the example agreement.

We would like to make you aware that it is advisable to apply one of the abovementioned options. Using one of these options can lead to a lessening of administrative burdens and prevention of addition. Especially with the current check-ups by the Tax Authorities it saves a lot of hassle if you have security regarding the private use of a company car. If you have trouble figure this out for yourself, please do not hesitate to contact us so we can help you.