Tax addition in the Netherlands
Anyone who is employed in the Netherlands and gets a company car, will be confronted with the regulation private use company car (in Dutch: regeling privégebruik auto van de werkgever). In short, this regulation means that the employer must add an amount to the wages of the employee, because he or she has financial advantage from the private use of the car. This regulation applies to virtually all passenger and delivery vehicles of an employer.
How is tax addition calculated?
Tax addition is calculated on the basis of a percentage of the tax value of the car. These percentages have been determined by the Dutch government and are dependent on the date on which the car was first registered and on the CO2 emissions of the vehicle.
The tax addition is then calculated as follows:
(tax value of the car x percentage of additional tax) - possible personal contribution = gross tax addition.
Change of addition percentage
When a car gets a license plate for the first time after 1 July 2012, the addition percentage for 60 months applies. After those 60 months, it must be re-examined in which tax addition category the car falls.
If the car has been named before 1 July 2012, then the addition percentage will apply until 31 December 2018 at the latest.
500 kilometer rule
Those who do not drive more than 500 kilometers privately on a calendar year basis with the employer's car do not have to pay any additional tax. Note: it is 500 private kilometers per calendar year. Anyone who does not drive privately with the car from January to November of that calendar year, but still makes 600 private kilometers in December, has to pay the fiscal addition for the whole year, including the months in which the car has only been used commercially.
If the car is only made available for part of the calendar year, the employee may only 'use' that part of the 500 private kilometers. For example: the car is made available from January to March. That is 3 months out of 12, or 25%. That means that even 25% of the maximum permitted private kilometers can be driven, i.e. 125 kilometers.
More information about the tax addition can be found on the website of the tax authorities.