Company car as a salary top-up
A company car, owned by your employer or your company, but put at an employee's disposal is deemed by the Dutch tax office as a component of your income (benefit in kind) since you (may) also benefit from it in private. A company car at the disposal of an employee is treated as a salary top-up (bijtelling in Dutch) for which the employee is charged wage tax.
How much is the salary top-up for your company car?
A salary top-up is applied to employees who have a company car. For sole traders, a profit top-up is applied. The top-up is a percentage of the car or van's list price in the Netherlands and also relates to the vehicle’s emissions. The percentage is a function of CO-2 emission of the car. The rate is set annually. For 2020, the top-up salary rates are:
|Top-up rate of 2020||CO-2 emission (in gr/km)||Fuel Type|
|8%||0||Hydrogen vehicle, other zero-emission vehicles with a list price below € 45,000|
|22%||more than 0||All other fuel types or zero emissions vehicles with a list price of more than €45,000|
Wage tax is charged by the Dutch tax office on the top up amount (bijtelling).
The list price of a company car
The salary top-up (bijtelling) is derived from the vehicle's value. This value is determined by its list price in the Netherlands, including VAT and motor tax (BPM). The value of any additions or accessories should also be included. If the car is imported from outside the Netherlands without BMP, then this can be excluded from the valuation.
Cars older than 15 years are valued at the current economic value instead of the list price.
An employee has a company car which runs on petrol. The list price of the company car in the Netherlands is € 30,000, including VAT and motor vehicle tax (BPM). The employee's annual salary top-up is 22 % x € 30,000 or € 6,600. Wage tax will be charged on this amount. For an employee with an annual salary of € 45,000, the tax rate for private use of the company car is 37.35% of € 6,600 or € 2,465 per year.
No salary top-up (bijtelling) applies for a company car at the disposal of an employee or sole trader if the car is being used privately for less than 500 km per year. The Dutch tax office requires detailed record-keeping for all journeys (both business and private) to qualify for the exemption. Several commercial apps are available to keep track of the required travel details of a company car.
Alternatively, if an employer prohibits and enforces a rule that a company car is not used outside working time, no salary top-up (bijtelling) applies. Note that the tax office requires that your employer has taken adequate measures to prevent private use of the company car.
Company car - an income component
Your employer is not required to make an addition to your wages if you can prove convincingly that your use of the car for private purposes does not exceed 500 km per calendar year. You can prove this is applicable:
- by providing your employer with a complete log of kilometers travelled;
- when have been provided with a van and your employer has forbidden you in writing to use the van for private purposes. Your employer should sufficiently monitor your use of the van and impose an appropriate sanction if the ban is not observed;
- you have been provided with a van that cannot be used outside working hours because the van is kept within the locked business premises outside working hours and this is verifiable;
- you are under a (collective) arrangement with the Tax and Customs Administration on how your employer monitors your private use;
- by means of a ‘Statement of no private use of company car’ in combination with a full kilometer log or another type of proof;
- by means of other types of proof for instance a black box;
Company bicycle or moped
The kilometer log should contain the following details:
- the make of the car;
- the model of the car;
- the registration number of the car;
- the period during which the car was available to you;
For each journey you must specify:
- the date;
- the initial and final mileometer reading;
- the address of departure and the address of arrival. If you drive to a meeting from your place of work and back again, you should write down the addresses of arrival and departure for both the outbound journey and the return journey;
- the route you followed, if this is different from the most normal route;
- whether this is a private journey or a business journey;
The accuracy of a kilometer log may be verified based on office diaries, order notes, garage bills, and electronic route planners. We recommend that you retain the kilometer log and this information, because the Tax and Customs Administration may ask you to produce them.
Alternatively, an adequate kilometer log may be kept with the aid of black box systems. These are automated registration systems that support the kilometer log. They accurately record the number of kilometers driven in the car. The written reports based on these records often specify each journey. In this respect, they may help reduce the administrative burden, because a multitude of journey details are recorded automatically.
The driver indicates himself whether the journey is a business journey or a private journey. Therefore, a relationship between the report and other documents (such as diaries) will still be necessary.
Together, these reports and documents represent the (verifiable) kilometer log that serves as proof of actual use.
Statement of no private use of company car
If your private use of the car will not exceed 500km per calendar year, you may apply for a statement of no private use of company car (Verklaring geen privé-gebruik auto) from the Tax and Customs Administration. You submit a copy of this statement to your employer, who will then be able to omit the addition of extra tax. You should always be able to prove convincingly to the Tax and Customs Administration that your private use of the car did not exceed 500km. You can do this by means of – for instance – a complete kilometer log.
If you are unable to supply the proof, the Tax and Customs Administration will issue you with a retrospective assessment for the wage tax/national insurance contributions owed and the income-related contribution towards the health care insurance scheme. The retrospective assessment may be increased by the assessment interest owed and, where applicable, a penalty.
The statement is valid for an unlimited period. If there is a change in the circumstances under which you applied for the statement, you should notify the Tax and Customs Administration as soon as possible. In that case, your statement will be revised. The Tax and Customs Administration will inform your employer of the change. Your employer will subsequently deduct the additional tax.
You are not required to apply for a statement in the following situations:
- your employer has made a collective arrangement with the Tax and Customs Administration. You can check this with your employer;
- you drive a van that you cannot use outside working hours because the van is kept within the locked business premises outside working hours and this is verifiable;
- you drive a van and your employer has forbidden you in writing to use the van for private purposes. Your employer sufficiently monitors your use of the van and will impose an appropriate sanction if the ban is not observed;
- because of the nature of your work, you and one or more of your colleagues constantly take turns in driving the van, and it is difficult to determine to which of you the van has been made available for private purposes. The private use will be taxed on the part of your employer via a final levy. You can check this with your employer;
- you are driving a van that is suitable (nearly) exclusively for the carriage of goods. For example, this may be a van that only has a driver’s seat and in which the attachment points of the passenger’s seat have been ground down or welded shut;
- you are driving a car that is equipped, and is recognizable as such, for use by the police or the fire brigade, for transporting sick and injured persons, for transporting mortal remains, for transporting prisoners, for transporting sick or injured animals or for securities transports;
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