Company car as salary top-up
A company car, owned by your employer or your company, at an employee's disposal is deemed by the Dutch tax office as an income component (benefit in kind) since you (may) also benefit from it in private. The taxation of a company car at the disposal of an employee is a salary top-up (bijtelling in Dutch) over which the employee is charged wage tax.
How much salary top-up for your company car?
A salary top-up applies to employees who have a company car at their disposal. For sole traders, a profit top-up applies. The top-up salary is a percentage of the list price in the Netherlands of the passenger car or van. The percentage is a function of CO-2 emission of the car. The rate is set annually. For 2019, the applicable top-up salary rate can be found in the below table.
|Top-up rate of 2019||CO-2 emission (in gr/km)||Fuel Type|
|4%||0||Hydrogen vehicle, other zero-emission vehicles with a list price below € 50,000|
|22%||more than 0||All other fuel types|
The salary top-up (bijtelling) is calculated by applying the top-up rate to the list price of the vehicle in the Netherlands. Over the amount calculated wage tax is charged for by the Dutch tax office.
The list price of a company car
The salary top-up (bijtelling) is derived from the value of the car. This value is determined by the list price, including VAT and motor tax (BPM) in the Netherlands of the passenger car or van. The value of any additions or accessories of the car should also be included in the value of the car. If the car is imported from outside the Netherlands without BMP, then this value can be excluded from the valuation.
Cars older than 15 years are valued by the current economic value instead of the list price.
An employee has the disposal of 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. Over this amount wage tax will be charged. For an employee with an annual salary of € 45,000, the tax for the private use of the company car is 38.10% (2nd tax bracket) of € 6,600 or € 2,514 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 a detailed record-keeping administration of all rites (both business and private) to qualify for the exemption. Several commercial apps are available to keep track of the required rite details of a company car.
Alternatively, if an employer prohibits and enforces that a company car is not being 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 kilometers per calendar year. You can prove this/is applicable when:
- by providing your employer with a balanced kilometer log;
- you 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 balanced kilometer log or another type of proof;
- by means of other types of proof (under the doctrine that evidence can be provided by all legal means available), for instance, a Black Box;
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 customary route;
- whether this is a private journey or a business journey;
The correctness of a kilometer log may be verified based on(amongst others): 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, the Black Box 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 (diaries and the like) will still be necessary, as is also the case with a manually kept kilometer log.
The totality of reports and underlying documents constitutes the (verifiable) kilometer log that serves as proof of the actual use.
Statement of no private use of company car
If your private use of the car will not exceed 500 kilometers 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. You should always be able to prove convincingly to the Tax and Customs Administration that your private use of the car did not exceed 500 kilometers. You can do this by means of – for instance – a balanced 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 make the addition.
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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