Company car

If you run a business in the Netherlands and you or your employee/employees use a car on business trips, you may sometimes provide an allowance for the costs or offset the costs against tax. What rules apply depends on your situation. The Dutch Tax and Customs Administration (Belastingdienst) distinguishes between the following situations:

You drive business kilometres in your own car or a rental car

You may offset €0.19 per kilometre against your revenue for business trips made in your own car or a rental car. You may not deduct the VAT (BTW) on the purchase price of the car, but you may deduct the VAT on repair and maintenance costs on condition that you take account of private use of your car.

You drive business kilometres in a company car

Your car is part of the business assets and all motoring expenses are chargeable to your business. You may offset the costs against your revenue on condition that you take account of private use of the car. If you buy the car especially for your business, you may deduct the VAT on the purchase price. If you already owned the car before you started using it for your business, you may not deduct the VAT on the purchase price. You may deduct the VAT on the repair and maintenance costs, on condition that you take account of private use.

You drive business kilometres in a leased car

A leased car is not part of the business assets of your business, but the costs are chargeable to your business. You may offset the costs against your revenue, on condition that you take account of private use of the car. You may also deduct the VAT charged to you by the leasing company.

Your employee drives business kilometres in his own car

You may pay your employee an allowance free of tax and social security contributions of no more than €0.19 per kilometre. You may also pay your employee this allowance for commuter travel. You may not deduct the VAT on the purchase price or repair costs of this car.

Your employee drives a company car

If your employee drives more than 500 kilometres per year for private purposes, this private use will be taxable as wages in kind. This means that you must add a percentage of the value of the car to the employee’s wages. You then pay wage tax on this amount. You may offset the costs of the car against your revenue. You may also deduct the VAT on these costs, on condition that you take account of private use of the car.

Calculating the costs of company cars

The website of the Chamber of Commerce (Kamer van Koophandel) includes a tool to make a cost estimate, enabling you to determine whether it makes more financial sense to take a company car or have your own car.

Private use of a car in the automobile sector

Employees in the automobile sector often use various company cars. The (Dutch-language) ‘Guide to Added Amounts for Private Use of a Company Car in the Automobile Sector' describes how employers in the automobile sector can determine the added amounts for private use of a company car.

Further information

For further information, please contact the Tax Information Line for Cars (Belastingtelefoon Auto): +31 (0)800 0749. This service is available from Monday to Friday from 8 a.m. to 5 p.m.

Please submit any questions about private use of a company car in writing to the National Coordination Point for Cars:

Landelijk Coördinatiepunt Auto
Postbus 843
7600 AV Almelo