Taxation of travel allowance and company car

Transport and travel costs

Most employees travel for work. You can think of commuting (e.g. to the office), other business trips (e.g. to customers) or trips for training your employee for work. As an employer, you can reimburse the costs of these trips. You can also make sure in another way that your employee can make these trips for his work, for example by providing him with a car or train tickets.

This article provides you with information about reimbursements and benefits in kind for trips your employee makes for work. You will also find information about the provision of means of transport, tickets, season tickets and parking facilities.

Attention!
These reimbursements, benefits in kind and provisions are sometimes subject to specific exemptions or zero valuations. In other cases, you can opt to have the reimbursement, benefit in kind or provision designated as final tax pay. The reimbursement, benefit in kind or provision may then not deviate by more than 30% from what is customary in comparable circumstances.

The following topics will be covered:

  • travel with the employee’s own car, motorcycle, moped, bicycle, etc. (see paragraph 1.1)
  • travel by public transport (see paragraph 1.2)
  • travel with a company car (see paragraph 1.3)
  • travel with a company delivery van (see paragraph 1.4)
  • travel by another means of transport provided by the company (see paragraph 1.5)
  • travel by taxi, boat or aircraft (see paragraph 1.6)
  • bicycles (see paragraph 1.7)
  • carpooling scheme (see paragraph 1.8)
  • transport on behalf of the employer (see paragraph 1.9)
  • parking facilities (see paragraph 1.10)
  • travel expenses for periodic family visits (see paragraph 1.11)
  • temporary other transport because of road works (see paragraph 1.12)

1.1  Travel with the employee’s own car, motorcycle, moped, bicycle, etc.

This paragraph is about reimbursing your employee for journeys made for work by his or her own means of transport. For example, with his own car, motorbike or bicycle, but also on foot. You will find information on the following topics:

  • tax-free allowance of up to € 0.19 per kilometre (see paragraph 1.1.1)
  • fixed allowance (see paragraph 1.1.2)
  • reimbursement of total car expenses (see paragraph 1.1.3)
  • reimbursement higher than € 0.19 per kilometre and other reimbursements (see paragraph 1.1.4)
  • administering and retaining reimbursements (see paragraph 1.1.5)
  • allowance for charging station and electricity for electric cars (see paragraph 1.1.6)

For more information about reimbursing or providing a bicycle, see paragraph 1.7.

1.1.1  Tax-free allowance of up to € 0.19 per kilometre

Your employee uses his or her own means of transport to travel for work. You may pay your employee a tax-free allowance for these trips of up to € 0.19 per kilometre. This is a targeted exemption. If you meet the conditions, the tax authorities assume that you have designated the allowance as final tax pay up to and including the maximum of € 0.19 per kilometre. It makes no difference whether your employee uses the means of transport for commuting between home and work or for other business trips.

And it does not matter which private means of transport your employee travels with. For example, if your employee lives 8 kilometres from his work and travels to work every day, you may reimburse a maximum of € 3.04 (€ 0.19 x 16) per day tax-free. Kilometres for commuting are business kilometres. Work traffic also includes the kilometres your employee travels between the place of work and his home during the course of a working day, for example the kilometres for lunch at home.

The tax-free allowance of € 0.19 per kilometre does not apply to:

  • kilometres driven for private reasons (e.g. to take a child to the nursery)
  • an allowance for (parts of) journeys for which you provide transport (see paragraph 1.9)

Example 1
Your employee travels for his work from Monday to Wednesday with your staff bus from the pick-up point to a fixed place. He travels with his own car from his home to the embarkation point (distance 9 km). On Thursdays and Fridays, he travels with his own car from his home to this fixed place (distance 42 kilometres), because the staff van is not available on those days. On Fridays he has to make a 10 kilometer detour to take his child to the nursery.

You may then pay your employee the following untaxed travel allowance:
– Monday to Wednesday: 3 days x 18 kilometres x € 0.19 = € 10.26
– Thursday and Friday: 2 days x 84 kilometres x € 0.19 = € 31.92

Because the detour kilometres are private on Fridays, a compensation for this is your employee’s salary. You can also indicate this wage as final tax pay.

Example 2
You have made a company car available to your employee for the whole of 2021. He also has his own car. He will be driving his own car for 400 business kilometres in 2021. If your employee uses his own car, you may still pay him a tax-free allowance of up to € 0.19 per business kilometre. You must then make it plausible that your employee did not use the company car you have provided for these business kilometres.

1.1.2  Fixed allowance

You may give your employee a fixed tax-free allowance (targeted exemption) if he travels to a fixed place for his work. However, you must meet the conditions (LINK).

Attention!
For many employees, the measures around the corona crisis lead to a change in their travel pattern. That change may mean that an employer has to include all or part of the fixed travel allowance in their taxable salary. For certain fixed travel allowances, an approval applies until July 1 2021.

You can base the amount of the fixed allowance on the number of times in a year that your employee is likely to make business trips and the length of those trips. You will need to adjust the allowance if circumstances change, e.g. if your employee moves house or works fewer days.

You may also determine the amount of the fixed tax-free allowance using a practical method. You can then choose between 2 methods.

Method 1

An employee presumably travels to a fixed work location on 5 days per week, during at least 36 weeks (70% of 52 weeks). If the employment begins or ends during the calendar year, 70% of the number of expected full weeks in that year may be used as a basis. For the calculation of the fixed tax-free allowance we can assume 214 working days in a year. Account has already been taken of short-term absence due to holidays, illness and leave. If you can demonstrate that the number of days is at least 25% higher than 214 days (i.e. at least 268 travel days to a fixed location), you may assume the higher number of days.

You multiply the number of working days by the total number of kilometres per day. You multiply the total number of kilometres for a year by the tax-free allowance of maximum € 0.19. For the fixed allowance per month or per week, you divide the result by 12 or 52.

You may also apply this method for employees who travel to a fixed location less than 5 days a week, for example if they work part-time. In that case, you make the calculation on a proportional basis. For example, if an employee probably travels to a fixed place for 3 days a week, you multiply the result of the calculation by 3/5.

You may continue to pay the fixed travel allowance for a maximum of 6 consecutive weeks during which your employee is absent. If you expect your employee to be absent for a prolonged period of time, you may still pay the fixed tax-free travel allowance during the current and the next calendar month. After that, you may only pay the travel allowance again as from the month following the month in which the employee returns to work.

Example
An employee has the flu and he calls in sick on March 20th. He has just returned to work for one week, when he falls down the stairs on April 5 and breaks his leg. As a result, the employee will probably not be able to do his job for more than 3 months. On 5 August, the employee recovered and resumed work.

On 20 March there will be a short absence; you may continue to pay the fixed travel allowance tax-free. On 5 April, long-term absence is foreseeable. You may then pay the fixed travel allowance for April and May yet to be paid tax-free. Thereafter, until August, the month in which the employee returns to work, the fixed travel allowance is taxed as the employee’s salary. You may also designate this wage as final tax pay. Only from 1 September the employee can again receive a tax-free fixed travel allowance.

Attention!
For many employees, the measures around the corona crisis lead to a change in their travel pattern. That change may mean that an employer has to include all or part of the fixed travel allowance in their taxable salary. For certain fixed travel allowances, an approval applies until July 1 2021.

Post-calculation

In the case of a one-way trip of more than 75 kilometres from home or place of residence to a fixed place for work, post-calculation is obligatory. In doing so, you must determine whether the fixed travel allowance corresponds to the actual number of commuting kilometres in the calendar year multiplied by the kilometre allowance you paid (but no more than € 0.19 per kilometre). Variable mileage allowances may include netting (see paragraph 1.1.4). An excessive part of the allowance must be included in the salary or must be refunded to you by your employee. You can also designate this wage as final tax pay.

The post-calculation is done at the end of the calendar year, or in the pay period after the month in which the employment ends, if this occurs during the calendar year. A fixed travel allowance with post-calculation is also allowed for regular trips to places other than the fixed place where the employee works.

Method 2

If your employee does not always travel to a fixed place for work, you may also determine the fixed travel allowance by another method. The following starting points apply to method 2:

  • You pay a tax-free travel allowance of up to € 0.19 per business kilometre.
  • You base the allowance on 214 working days per calendar year. This number includes incidental working from home, illness, holidays, sabbatical leave and care leave.
  • Your employee travels to the fixed location on at least 128 days per calendar year. This allows an employee who works 5 days or more per week to work from home for up to 2 days per week while retaining the fixed tax-free travel allowance.

In the following situations, you must apply the number of working days (214) and travel days (128) pro rata:

  • Your employee works less than 5 days a week.
  • The employment begins or ends in the course of the calendar year.
  • The travel distance for your employee changes due to a transfer or relocation, for example.
  • You stop giving a fixed tax-free travel allowance.

Example 1
Your employee works 2 days a week. The one-way distance from his home to the fixed place for his work is 25 kilometres. The fixed tax-free travel allowance for the entire calendar year is then a maximum of 85 days (2/5 x 214) x 50 kilometres x € 0.19 = € 813.20. You can pay your employee a fixed tax-free allowance of € 67.77 per month for these trips, if he travels to the fixed location on at least 51 days (2/5 x 128) in the calendar year.

Example 2
Your employee works 5 days a week. The one-way distance from his home to the fixed place for his work is 25 kilometres. The fixed tax-free travel allowance for the entire calendar year is then a maximum of 214 days x 50 kilometres x € 0.19 = € 2,033. This is € 169.42 per month.

Your employee becomes ill for a longer period of time on 15 July. As of 1 September, you stop the fixed travel allowance. On 1 December, your employee goes back to work and from 1 December, you pay the allowance again. According to this scheme, your employee must travel to the fixed location on at least 85 days (8/12 x 128 days) in the period January to August inclusive and in December on at least 10 days (1/12 x 128 days) to qualify for the fixed tax-free allowance of € 169.42 per month. If your employee does not meet this requirement, you may reimburse a maximum of € 0.19 per kilometre actually travelled between home and work, tax-free. For any fixed tax-free allowances that have been given in excess, you must file corrections on your payroll tax returns. You may also designate this wage as final tax pay.

1.1.3  Reimbursement of total car costs

If you have agreed to reimburse the total costs (including depreciation) of your employee’s own car, the same rules apply as to a car you have provided to your employee. The same applies also to a car that your employee has leased and of which you will reimburse the costs. It makes no difference whether or not your employee pays you compensation for the private use of the car (see paragraph 1.3 and 1.4).

1.1.4  Allowance higher than € 0.19 per kilometre and other reimbursements

If you reimburse your employee more than € 0.19 per kilometre for travelling by his or her own means of transport, the excess will be taxed as the employee’s salary. However, you can also designate this wage as final tax pay.

Variable kilometre allowances

In the case of variable kilometre allowances, you may take the average of the kilometre allowances paid per employee to determine whether the allowance on average exceeds € 0.19 per kilometre. This is only allowed if you have laid down in writing that higher kilometre allowances are also intended for travel costs for which you have given a lower kilometre allowance than € 0.19. You can, for example, lay down the scheme in a supplement to the (collective) labour agreement or your reimbursement scheme.

You calculate the average of the higher and lower kilometre allowances before the last declaration date of the calendar year. Because if there are wages, you must declare those wages in that declaration. However, you may also designate this wage as final tax pay.

If the employment ends in the course of the calendar year, calculate the average for the period in which the employment ends before the deadline of the declaration. If there is wages, you must declare those wages in that declaration. However, you may also declare this wage as final tax pay.

Example
In 2021, you will pay your employee the following kilometre allowances for travel for work:
– 3,000 km at € 0.30 per km = € 900
– 1,000 km at € 0.10 per km = € 100
– kilometre allowance: € 900 + € 100 = € 1,000

Calculation of the salary in December 2021:

– reimbursed in 2021: € 1,000
– to be reimbursed tax-free in 2021: 4,000 km at € 0.19 per km = € 760
– salary: € 1.000 – € 760 = € 240

Other reimbursements

Reimbursements for travel expenses that you pay in addition to the € 0.19 per kilometre are salary. These are, for example, allowances for parking and toll charges, for (extra) depreciation and wear and tear of the car, for extra fuel consumption by a trailer or for damage to the car.

Transport by ferry
You can reimburse the actual costs of transport by ferry if this transport is public transport (see paragraph 1.2). In that case, you will not pay a reimbursement of € 0.19 per kilometre for the distance by ferry. If the transport by ferry is not public transport, the reimbursement you pay in addition to the € 0.19 per kilometre will be taxed as salary.

Parking at the employee’s home or workplace

In which cases the parking allowance is salary, you can read in paragraph 1.10.

Attention!
Does the reimbursement or provision of navigation equipment meet the necessity criterion? If so, it is specifically exempt.

1.1.5  Administering and retaining reimbursements

You must keep the details of the reimbursement of expenses for travel by your employee to a fixed place of work by his or her own means of transport with the payroll administration. You must also keep details of the reimbursement of expenses for occasional travel by the employee with his own means of transport. For each employee, you keep a record of the number of kilometres for which you have granted an allowance per payment period. In order to make the tax-free reimbursement of a maximum of € 0.19 per kilometre plausible, it is wise to note the route taken and the address visited per journey.

1.1.6  Allowance for charging station and electricity for electric cars

You can have a charging station installed at your employee’s home or you can reimburse the costs of installing a charging station. This is allowed, as long as it fits within the tax-free reimbursement of a maximum of € 0.19 per kilometre that you pay the employee. Reimbursements you pay in addition to the € 0.19 per kilometre are salary. This also applies to the electricity for the car and any necessary adjustments, such as an extra group in the meter cupboard and a meter to measure consumption.

1.2  Travel by public transport

By public transport we mean passenger transport according to a timetable that is available to everyone. This could be transport by car, bus, ferry, train, tram or metro. Transportation by taxi, boat or plane is not public transport. A separate regulation applies for this (see paragraph 1.6).

In this paragraph we will discuss the following topics:

  • reimbursement of costs (see paragraph 1.2.1)
  • issuing of tickets (see paragraph 1.2.2)
  • making tickets available (see paragraph 1.2.3)
  • transport to and from a station or stop (see paragraph 1.2.4)
  • travel deduction for income tax (see paragraph 1.2.5)
  • public transport flow chart (see paragraph 1.2.6)

1.2.1  Reimbursement of costs

You can reimburse your employee’s public transport costs tax-free (targeted exemption). If you meet the conditions, the tax authorities assume that you have designated this reimbursement as final tax pay up to and including the maximum amount of the targeted exemption. You have the following options:

  • If your employee travels by public transport at his own expense, you may reimburse a maximum of € 0.19 per kilometre tax-free. You can also choose to reimburse the actual travel costs. This is also allowed tax-free. You do not have to take into account any delay compensation that the carrier may give to your employee.
  • If your employee travels partly by his or her own transport and partly by public transport, you may give a tax-free allowance for the entire distance travelled of up to € 0.19 per kilometre. You may also reimburse the actual public transport costs tax-free and, in addition, reimburse a maximum of € 0.19 per kilometre for travel by private transport tax-free.
  • You may give your employee a fixed, tax-free reimbursement for travel if you opt for reimbursement of a maximum of € 0.19 per kilometre (see paragraph 1.1.2).

If you wish to reimburse the actual public transport costs tax-free, you must demonstrate that your employee has incurred expenses for travelling by public transport. For example, you keep (copies of) transport tickets or overviews of journeys and costs incurred with the ov-chip card in your records.

Attention!
For many employees, the measures around the corona crisis lead to a change in their travel pattern. That change may mean that an employer has to include all or part of the fixed travel allowance in their taxable salary. For certain fixed travel allowances, an approval applies until July 1 2021.

Reimbursement of an ov-chip card

Do you reimburse your employee for the purchase costs of an ov-chip card? If so, you must add the compensation to your employee’s salary. You may also designate this wage as final tax pay.

Reimbursement of a public transport subscription

Do you reimburse your employee for a public transport subscription, for example an annual route ticket or an annual public transport pass? Whether this compensation is tax-free depends on the costs of the business trips the employee makes with the subscription. You can determine these costs in 2 ways:

  • You make an arrangement with your employee about post-calculation.
  • You make the costs plausible.

You make an arrangement with your employee about post-calculation
Within 1 month after the end of the validity of the public transport subscription, you and your employee determine the business use of the subscription with post-calculation. The business use of the season ticket can be determined by adding up all costs that the business trips would have cost without the season ticket. If the costs of business use are less than the reimbursement you paid the employee, the employee must reimburse the difference to you. You can also agree with your employee that any remaining amount is salary for the employee. You can also designate this wage as final tax pay.

Example 1
You reimburse an annual public transport card of € 6,000. The price of the business trips for which the employee uses the card is € 8,000. In that case, the reimbursement of the public transport pass is completely tax-free.

Example 2
You reimburse an annual public transport card of € 6,000. The price of the business trips for which the employee uses the card is € 4,000. In that case, € 4,000 is tax-free and € 2,000 is taxed salary of the employee. But you can also designate this wage as final tax pay.

You make the cost of business use plausible
The fee is only tax-free if you can demonstrate that the cost of business travel is at least as high as the cost of the public transport card. You may use the following methods to make these costs plausible:

  • You calculate the cost of the business trips in 1 month. In that case, these costs must be at least as high as 1/12 of the cost of the season ticket.
  • You calculate the cost of business travel over a period of 6 months or more. In that case, these costs must be at least half of the cost of the season ticket in the 1st 6 months.

Reimbursement of a discount subscription
Do you give your employee a discount subscription? Whether this compensation is tax-free depends on the amount of the costs of the business trips the employee makes with the discount subscription:

  • Is the price of the discount subscription lower than the discount on business trips? Then the reimbursement of the discount subscription is tax-free.
  • Is the price of the discount subscription higher than the discount on business trips? In that case, the difference between the price of the discount subscription and the discount is the employee’s taxed salary. But you can also indicate this wage as final tax pay.

1.2.2  Provision of tickets

Your employee can travel for business purposes and for commuting by public transport with tickets that you issue to him. You can issue separate tickets or public transport tickets. In that case, this is transport provided by the employer (see paragraph 1.9).

You may provide the tickets to your employee tax-free (targeted exemption) if you designate the tickets as final tax pay, for example by including them in your administration as final tax pay. Your employee has no travel expenses, so you are not allowed to pay him a tax-free travel allowance. However, you can give a tax-free reimbursement of a maximum of € 0.19 per kilometre for journeys not covered by the tickets, for example journeys to and from the station or bus or tram stop (see paragraph 1.2.4).

Providing a discount subscription

Do you give your employee a discount subscription? Whether this provision is tax-free depends on the amount of the costs of the business trips the employee makes with the discount subscription:

  • Is the price of the discount subscription lower than the discount on business trips? Then the provision of the discount subscription is tax-free.
  • Is the price of the discount subscription higher than the discount on business trips? In that case, the difference between the price of the discount subscription and the discount is the employee’s taxed salary. But you can also designate this wage as final tax pay.

Providing a public transport subscription

Do you provide your employee with a public transport subscription, e.g. an annual route card or a public transport annual card? Whether this provision is tax-free depends on the cost of the business trips the employee makes with the subscription. You can determine these costs in 2 ways:

  • You make an arrangement with your employee about post-calculation.
  • You make the costs plausible.

You make an arrangement with your employee about post-calculation
Within 1 month after the end of the validity of the public transport subscription, you and your employee determine the business use of the subscription with post-calculation. If the cost of the business use is less than the cost of the subscription, the employee must reimburse the difference to you. You can also agree with your employee that any remaining amount is salary for the employee. You can also designate this wage as final tax pay.

Example 1
You provide a public transport card of € 6,000. The price of the business trips for which the employee uses the card is € 8,000. In that case, the provision of the public transport pass is completely tax-free.

Example 2
You provide a public transport card of € 6,000. The price of the business trips for which the employee uses the card is € 4,000. In that case, € 4,000 is tax-free and € 2,000 is taxed salary of the employee. However, you can also designate this wage as final tax pay.

You make the cost of business use plausible

The provision is only tax-free if you can demonstrate that the value of the business travel is at least as high as the cost of the public transport card. You may use the following methods to demonstrate this value:

  • You calculate the value of the business trips in 1 month. In that case, the value must be at least as high as 1/12 of the cost of the season ticket.
  • You calculate the value of the business trips over a period of 6 months or more. In this case, the value in the 1st 6 months must be at least half of the cost of the season ticket.

1.2.3  Make tickets available

Your employee can travel for business purposes and for commuting by public transport with tickets that you make available to him.

You can make the following tickets available to your employee tax-free:

  • public transport subscriptions (nil valuation)
  • discount subscriptions that entitle you to a discount of up to 50% on standard fares (nil valuation).
  • single tickets for business travel (targeted exemption)

Commuting trips are also business trips.

Make a public transport subscription available

Do you make a public transport subscription available to your employee? Then you need to assess whether you need to add something to the salary. You do not need to add anything to the salary if your employee uses the public transport pass (also) for travelling for work.

If your employee does not use the public transport pass for business travel, the invoice value is taxed as the employee’s salary. You can also designate this wage as final tax pay.

A public transport subscription that you make available may be in the name of your employee.

Make a discount subscription available

Do you make a discounted subscription available to your employee that entitles him/her to a discount of up to 50% on the standard rates? Then you do not need to add anything to the salary if your employee uses this card (also) for travel for work. In addition, you may only reimburse the discounted price of business train trips tax-free.

Change of circumstances: provision no longer tax-free

The public transport season ticket that you make available tax-free can change to taxed salary if the travel conditions of the employee change drastically and you choose to continue the season ticket. For example:

  • Your employee receives a company car and uses it for business travel.
  • You or your employee moves house, as a result of which your employee no longer uses the season ticket or card for business travel.
  • The employment relationship with your employee ends.

If your employee is allowed to continue to use your public transport subscription, the invoice value of the subscription that has not yet started is taxed as your employee’s salary. However, you may also designate the salary as final tax pay. For a public transport subscription that has already started, the economic value is taxed as the employee’s salary. But you may also designate the salary as final tax pay.

Make individual tickets for business travel available

Your employee can travel for business trips and for commuting by public transport with separate tickets that you make available to him. In that case, this is transport on behalf of the employer (see paragraph 1.9). You may make the tickets available to your employee tax-free (targeted exemption). If you meet the conditions, the tax authorities assume that you have designated the provision as final tax pay. Your employee has no travel expenses, so you are not allowed to pay him a tax-free travel allowance. However, you can give a tax-free reimbursement of a maximum of € 0.19 per kilometre for trips not covered by the tickets, for example trips to and from the station or bus or tram stop (see paragraph 1.2.4).

1.2.4  Transportation to and from a station or stop

For travel by your employee’s own means of transport from his home or a fixed place for work to, for example, a station or bus or tram stop, you may reimburse a maximum of € 0.19 per kilometre tax-free (see paragraph 1.1.1). If you use a taxi, you may reimburse the actual taxi costs tax-free (see paragraph 1.6).

1.2.5  Travel deduction for income tax

If your employee travels by public transport for his work, he may be entitled to the travel deduction for income tax purposes. This is possible under the following conditions:

  • You do not provide your employee with tickets.
  • Your employee travels to work at least once a week or 40 times a calendar year by public transport.

Your employee reduces the amount of the travel deduction by the travel allowance you pay. Furthermore, your employee must be able to provide the tax authorities with a statement for the travel deduction. In most cases, this is a public transport statement that the public transport company has issued to your employee.

If your employee does not travel with season tickets, for example because he works part-time, he may still be eligible for the travel deduction. To do so, he must be able to submit a travel statement from you and prove that he has made the trips. He can do this by submitting the overviews of the trips with the ov-chip card and the costs of those trips. If your employee does not use an ov-chip card, he can submit the separate tickets.

The travel declaration signed by you must contain at least the following:

  • your name and address
  • the name and address of your employee
  • the number of days per week on which your employee usually travels to work by public transport

1.2.6  Public transport flow chart

Use this flow chart if your employee travels by public transport to determine whether the reimbursements, benefits in kind or provisions are taxed or tax-free.

1.3  Travelling with a company car

You can provide your employee with a company car. If you do so, this is transport on behalf of the employer (see paragraph 1.9). In that case, you may not pay your employee a tax-free kilometre allowance. Any allowance you pay is then taxed as the employee’s salary. You can also designate this salary as final tax pay.

You can provide your employee with a car that belongs to you. But you can also provide a car that does not belong to you. That is the case in these situations:

  • You rent or lease a car for your employee.
  • You agree to reimburse the total costs (including depreciation) of your employee’s own car. If your employee drives his own car and you only reimburse € 0.19 per kilometre for business trips, there is no car provided by you.
  • You reimburse all costs of a car that your employee hires or leases himself.

If your employee reimburses you an amount for private use of the car, then in all cases the car is still a company car which is provided to the employee.

If your employee is allowed or able to use the passenger car you make available to him, also for private purposes, a special arrangement applies for private use: the additional taxable benefit. You make a car available for private purposes if your employee is allowed or able to determine himself for which trips he uses the car. It is also possible that a car is made available for private purposes if, for example, you apply a kilometre limit or if you prohibit travelling abroad by car.

The private use scheme generally also applies to the provision of a delivery van, but there are also specific rules for these vehicles. These rules can be found in paragraph 1.4.

This paragraph covers the following topics:

  • regulation for private use of a car (additional taxable benefit) (see paragraph 1.3.1)
  • basis for the addition of private use car (see paragraph 1.3.2)
  • addition of private car use: percentages and starting points (see paragraph 1.3.3)
  • cars without CO2 emissions (see paragraph 1.3.4)
  • addition for cars with CO2 emissions of more than 0, but not more than 50 grams per kilometre (see paragraph 1.3.5)
  • addition for cars with CO2 emissions of more than 50 grams per kilometre (see paragraph 1.3.6)
  • addition of private use of car and employee’s personal contribution (see paragraph 1.3.7)
  • private use of cars and little or no pay in cash (see paragraph 1.3.8)
  • reimbursements for charging station and electricity for electric cars (see paragraph 1.3.9)
  • provide a car for part of the calendar year (see paragraph 1.3.10)
  • provide a car in the course of the calendar year (see paragraph 1.3.11)
  • provide more than one car at a time (see paragraph 1.3.12)
  • cars that are equipped and externally recognisable for certain services (see paragraph 1.3.13)
  • (collective) agreement on no private use of car with the tax authorities (see paragraph 1.3.14)
  • no addition for a maximum of 500 kilometres of private use (see paragraph 1.3.15)
  • ‘Declaration of no private use of car’ (see paragraph 1.3.16)
  • change or withdraw ‘Declaration of no private use of car’ (see paragraph 1.3.17)
  • trip registration (see paragraph 1.3.18)
  • other evidence (see paragraph 1.3.19)
  • cars older than 15 years (see paragraph 1.3.20)
  • addition of private use car for the car industry (see paragraph 1.3.21)
  • consequences of the addition for wage-related schemes (see paragraph 1.3.22)
  • processing private use of cars in the payroll tax return (see paragraph 1.3.23)
  • flow chart of the provided passenger car (see paragraph 1.3.24)

1.3.1  Regulation for private use of a car (additional taxable benefit)

If you provide your employee with a company car that he is also allowed to use privately, you must add an amount to the salary. This is the addition for private use of a car. The addition is wages in in kind. You must withhold wage tax/national insurance contributions and employee insurance contributions, and pay the Zvw employers’ levy or withhold the Zvw contribution.

It may happen that your employee does not use the car provided for a period of time because he is temporarily unfit for work or interrupts his career. In that case, too, the additional taxable benefit for private use of the car will continue to apply.

Attention!
The addition is always taxed as the employee’s salary. Therefore, you cannot designate this wage as final tax pay. There is one exception: the part of the addition for extraordinary security measures (see paragraph 1.3.2) can be designated as final tax pay.

Business and private kilometres

Business kilometres are kilometres your employee drives for his work. Also kilometres for commuting are business kilometers. Commuting also includes the kilometres your employee travels during the course of a working day between the place of work and his home, for example kilometres for lunch at home. Kilometres your employee travels to or from work for private reasons, e.g. to the nursery, are private kilometres.

Standby arrangement
If you can demonstrate that you have provided your employee with a car for standby duty (a rotation system in which your employee must be on call for a certain period of time), you may treat all kilometres during this standby duty as business travel. The following conditions apply:

  • Your employee has no influence on the choice of car.
  • Your employee has his own car that is as well suited for private use as, or better suited than, the company car.
  • Your employee must remain within a reasonable distance of his place of residence during standby duty.
  • You or your employee keeps a record of how many kilometres he drives during standby duty and the place(s) for which he is called.

Maximum 500 kilometres of private use: no additional charge

If your employee does not drive more than 500 kilometres privately with the company car on a calendar year basis, under certain conditions you do not have to add private use to his salary (see paragraph 1.3.15).

1.3.2  Basis for the addition for private use car

You calculate the addition (the value of the private use) over the basis for the addition of private use car. The basis also includes the costs for extraordinary security measures, e.g. bulletproof glass, drive-through tyres and door or floor armouring.

The basis is determined when the registration number has been allocated.

The registration number was allocated in the Netherlands before 1 July 2006.

The basis for the addition for private use of cars is the catalogue value including VAT and the tax on passenger cars and motorcycles (hereinafter: bpm). The basis is inclusive of accessories that were fitted ‘ex works’ or by the dealer or importer before the date on which the registration number was granted, regardless of whether you have already made the car available to your employee or not.

The basis for the addition for private use car is calculated as follows:

 Net catalog price calculated by the manufacturer or importer
+accessories fitted by the dealer (before date of registration)
+VAT
+bpm amount indicated on the license plate
=Basis for the additional taxable benefit for private use of a car

Attention!
Accessories that were exempted for the bpm also count towards the basis for the addition for private use car. For cars whose registration number was allocated before 1 January 2003, accessories fitted on the day of allocation of the registration number also count.

The registration number was issued in the Netherlands on or after 1 July 2006.

The basis for the addition for private use car is the catalogue value including VAT and bpm. Accessories fitted by or on behalf of the manufacturer or the importer before the date on which the registration number was allocated also count towards the basis for the additional taxable benefit for private use of the car. Other accessories do not count, even if fitted before the date of issue of the registration number.

The basis for the addition for private use car is calculated as follows:

 Net catalogue price calculated by the manufacturer or importer (including accessories)
+VAT
+bpm amount indicated on the license plate
=Basis for the additional taxable benefit for private use of a car

Catalogue prices cars in online database RDW

You can find the list prices of cars in an online database of the Road Traffic Service (RDW). In this database, the RDW records the list prices of cars registered for the first time as from 1 January 2005. You can find the database on rdw.nl.

For cars that are older, but less than 15 years old, you can use the historical price lists of the official importers.

Cars older than 15

From the moment that the car which is provided is more than 15 years old, the economic value of the car forms the basis for the calculation of the addition for private use car (see paragraph 1.3.20).

Imported used cars and date of 1st admission

For an imported used car, the Dutch list price applies on the date on which the car was first allowed on the road (abroad). This date is listed in the RDW’s vehicle registration register. This means that the list price of an imported car is the same as the list price of a car that was first used as a new car in the Netherlands.

1.3.3  Addition private car use: percentages and starting points

Which addition percentage you have to use depends on the CO2 emission of the car and on the date of 1st admission or 1st registration of the car. We explain these terms below.

The general addition percentages for the private use of the car are:

  • 22% for cars with a date of 1st admission on or after 1 January 2017
  • 25% for cars with a date of 1st admission before 1 January 2017
  • 35% for cars older than 15 years

If a discount applies, one of the following reduced percentages applies: 0%, 4%, 7%, 8%, 11%, 12%, 14%, 15%, 20% or 21%. For 2021, the reduced rates of 4%, 7% and 8% for electric cars no longer apply for the full base. This concerns electric cars with a date of first admission:

  • in 2014 or earlier
  • in 2015, once the 60-month period has elapsed
  • on or after 1 January 2019

See paragraph 1.3.4.

You apply the applicable percentage to the basis for the addition for private use car (see paragraph 1.3.2). For each pay period, you then add a time-proportional part of the addition for private car use to your employee’s salary. If you can’t use the discountpercentage anymore in the course of the calendar year, then you apply the discount percentage until that moment and then the general percentage. So you make 2 calculations to determine what you need to add to each pay period (see example 1 below).

Date of 1st admission

The date of 1st admission is the date on which the vehicle (anywhere in the world) was first admitted on the road. As of January 1st 2017, the date of 1st admission, in addition to the CO2 emissions, determines the addition percentage you have to use. You will find the date of 1st admission on the registration certificate and on rdw.nl when you enter the car’s registration number.

Date of 1st registration

In addition to the CO2 emissions, the date 1st name determines the addition percentage to be used for cars with a date 1st approval before January 1st 2017. The date of first registration is the date on which the car’s registration number is registered for the first time in the Dutch vehicle registration register.

You will find the date of first registration on the registration certificate (‘date of first registration in the Netherlands’) and on rdw.nl if you enter the car’s registration number (‘date of first issue in the Netherlands’).

On the registration certificate and on rdw.nl you will also find the date on which the car was last registered (‘date of registration’). This date is not important for the addition.

CO2 emission limits

You will find the CO2 emissions of a car, which determines the height of the addition:

  • in the vehicle registration register of the Road Traffic Department (RDW)
  • on the so-called certificate of conformity (you can request this certificate from the manufacturer or importer)
  • on the environmental label of the car
  • in the fuel consumption booklet that the RDW publishes every year (you can find this booklet on rdw.nl).

Example 1
The basis for the addition for a car with a CO2 emission of more than 60 grams per kilometre and a date of 1 February 2016 is € 30,000. The addition percentage is 14% up to and including February 2021 and 25% from 1 March 2021 (see paragraph 1.3.6).

For a pay period of one month, the addition for the first two months is € 1,050 (€ 30,000 x 21% x 2/12), i.e. € 525 per month. Over the remaining months, the addition is € 6,250 (€ 30,000 x 25% x 10/12), i.e. € 625 per month.

Excessive private use

If the actual value of the private use is clearly more than the addition based on the general addition percentage, there is excessive private use of the car. You must then take the higher value of the private use. If a discount applies to the general additional taxable benefit percentage, you apply that discount to the basis and deduct the result from the value of the private use.

Example 2
The basis for the addition for a car without CO2 emissions and with a date of first admission of 30 January 2017 is € 40,000. The actual value of the private use is € 13,000. This is more than the addition based on the general addition rate (22% x € 40,000 = € 8,800). The reduced addition percentage is 4% (see paragraph 1.3.4). So the discount on the general addition percentage is 18%. The addition is then € 13,000 – € 7,200 (18% of € 40,000) = € 5,800. For a pay period of one month, the addition per pay period is 483.33 (€ 5,800 : 12).

Example 3
The basis for the addition for a car without CO2 emissions and with a date of first registration of 1st May 2017 is € 40,000. The actual value of the private use is € 13,000. This is more than the addition based on the general addition rate (25% x € 40,000 = € 10,000). The reduced addition percentage is 4% (see paragraph 1.3.4). So the discount on the general addition percentage is 21%. The addition is then € 13,000 – € 8,400 (21% of € 40,000) = € 4,600. For a pay period of 4 weeks, the addition per pay period is € 353.85 (€ 4,600 : 13).

Attention!
It is increasingly common for employers to provide an employee not only with a car, but also, for example, with a mobility card. The employee can then choose which means of transport he takes for his trip. If the employee uses public transport for business trips, this does not affect the amount of the addition for private car use.

1.3.4  Additional taxable benefit for cars without CO2 emissions

For cars with no CO2 emissions with an engine that can be powered by hydrogen and for fully battery-powered electric cars, a discount on the additional tax liability applies. For electric cars a distinction is made between electric cars without and electric cars with integrated solar panels (solar cell cars). Solar cell cars have integrated solar panels, in which the energy required for propulsion is stored in a battery pack which does not contain lead and the panels have a capacity of at least 1 kilowatt peak. For cars without CO2 emissions, the the addition percentage depends on the date of 1st admission:

Date of 1st admissionAddition rate in 2021
2021electric cars:
– 12% to the extent that the basis for the addition is € 40,000 or less
– 22% for the part of the base above € 40,000
hydrogen cars and solar cell cars:
– 12% for the whole basis of the addition
2020electric cars:
– 8% to the extent that the basis for the addition is € 45,000 or less
– 22% for the part of the base above € 45,000
hydrogen cars:
– 8% for the whole basis of the addition
2019electric cars:
– 4% to the extent that the basis for the addition is € 50,000 or less
– 22% for the part of the base above € 50,000
hydrogen cars:
– 4% for the whole basis of addition
2018 or 20174% for 60 months
The period of 60 months starts on the 1st day of the month following the month in which the 1st admission falls.
Before 1 January 2017The addition percentage depends on the date of 1st registration. Look for the percentages in the table below.

Addition percentages on date of 1st admission before 1 January 2017

Date 1st registrationAddition rate in 2021
20164% for 60 months
The 60-month period shall begin on the first day of the month following the month in which the first registration falls. After expiration of the 60 month period during the rest of the year, 12% if the basis for the addition is € 40,000 or lower and 22% on the part of the basis above € 40,000.

If you provide the car to another employee or if the car changes owner, the addition rate does not change.

Example 1
You provide your employee with an electric lease car (not a solar cell car). The date of 1st admission is 1 February 2021. The basis for the addition is € 85,000. The employee’s pay period is one month. He pays you a personal contribution of € 200 each month.

The addition per month is then:
(€ 40,000 x 12%) + ((€ 85,000 – € 40,000) x 22%)) : 12) – € 1,225, minus € 200 = € 1,025

Example 2
You provide your employee with an electric lease car (not a solar cell car). The date of 1st admission is 1 February 2016. The date of 1st registration is 16 May 2016. The basis for the addition is € 60,000. The employee’s pay period is one month. He pays you a personal contribution of € 50 each month.

The addition per month for January to May 2020 will then be:
((€ 60,000 x 4%) : 12) – € 50 = € 150

The addition per month for June to December 2020 inclusive is:
((€ 40,000 x 12%) : 12) + ((20,000 x 22%) : 12) – € 50 = € 767

Example 3
You provide your employee with an electric car with integrated solar panels (solar cell car). The 1st admission date is February 1, 2021. The basis for the addition is € 85,000. The pay period of the employee is one month. He pays you a monthly contribution of € 200.

The addition per month is then:
((€ 85,000 x 12%) : 12) – € 200 = € 650

1.3.5  Addition for cars with CO2 emissions of more than 0, but not more than 50 grams per kilometre

For cars with CO2 emissions of more than 0, but not more than 50 grams per kilometre, the addition percentage depends on the date of 1st admission:

Date of 1st admissionAddition rate in 2021
2021, 2020, 2019, 2018 or 201722%
Before 1 January 2017The addition percentage depends on the date of 1st registration. Look for the percentages in the table below.

Addition percentages on date of 1st admission before 1 January 2017

Date 1st registrationAddition rate in 2021
201615% for 60 months
The 60-month period shall begin on the first day of the month following the month in which the first registration falls.
2017, 2018, 2019, 2020 or 202125%

If you provide the car to another employee or if the car changes owner, the addition rate does not change.

1.3.6  Addition for cars with CO2 emissions of more than 50 grams per kilometre

For cars with CO2 emissions of more than 50 grams per kilometre, the addition percentage depends on the date of 1st admission:

Date of 1st admissionAddition rate in 2020
2021, 2020, 2019, 2018 or 201722%
Before 1 January 2017The addition rate depends on the date of 1st registration and on the CO2- emissions. Look for the percentages in the table below.

Addition percentages on date of 1st admission before 1 January 2017

Date 1st registrationFuelCO2 emissions in grams per kilometreAddition rate in 2021
2016NA>50- ≤10621% for 60 months
The 60-month period shall begin on the first day of the month following the month in which the first registration falls.
>10625%
2017, 2018, 2019, 2020 or 2021NANA25%

1.3.7  Addition of private use of car and employee’s own contribution

Any personal contribution from the employee for private use that you deduct from his net salary will be deducted from the addition. Conditions are that the contribution is intended for private use and you have agreed this with your employee beforehand.

Examples of arrangements you can make with your employee for personal contributions are: parking costs incurred by the employee, costs for accessories that are not or will not become the property of the employee, a fixed amount per private kilometre driven and a personal contribution in the event of damage. This is subject to the condition that the damage may not be the result of unlawful or negligent actions by your employee.

Attention!
Your employee may not deduct a personal contribution for the private use of the car in his income tax return.

In case of a higher lease amount for a car from a more expensive class, only the amount that the employee pays to you for the private use will be deducted from the private use car addition. If you have agreed with your employee that his higher personal contribution (top-up contribution) is entirely intended as a contribution for private use, you may deduct the entire contribution. However, if you and your employee have not agreed on anything or or agreed on something else, this is not allowed. For example, if the employee also has to pay a contribution when he does not have a car for private use.

Furthermore, you must make a distinction between payments to you and payments to third parties. If your employee pays an amount to third parties, e.g. for washing the car in the car wash, this does not reduce the addition for private use of the car. The additional taxable benefit will only be lower if you have agreed with your employee that he will make the payment to third parties for you or on your behalf and you set off that payment as a contribution for private use. In that case, you may not reimburse the payment.

Attention!
A fine that your employee pays you because he has used the car privately against your ban is not a personal contribution for private use.

The balance of the addition for private use car and the personal contribution for private use of your employee may not be negative on a calendar year basis. You must deduct from the balance wage tax/national insurance contributions, pay employee insurance contributions and employer’s levy Zvw or deduct Zvw contribution. In the wage tax return you state the value of your employee’s private use and personal contribution (see paragraph 1.3.23).

Example
You provide your employee with a car for which the basis for the addition of private use car is € 24,000. The pay period is 1 month and the additional taxable benefit percentage is 22%. Your employee pays a personal contribution for private use of € 100 per month. You then add for each pay period to his salary 1/12 x 22% x € 24,000 – € 100 (personal contribution) = € 340.

It may happen that the personal contribution in a pay period is more than the addition for private use of a car. In that case, the balance in that pay period may be negative, if the total balance on a calendar year basis is not negative. If, at the end of the calendar year, it appears that too much personal contribution has been deducted, you may have to make one or more corrections to the previous wage tax returns.

Example
You provide a car to your employee. The pay period is 1 month. The addition for private use of the car is € 500 per month. Your employee pays you a personal contribution for private car use of € 560 per month. In the wage tax returns for January up to and including November, you have taken into account € 500 private use of a car and € 560 personal contribution of your employee. In the tax return for December you will find that at the end of November there is a negative addition of 11 x € 500 – 11 x € 560 = € 660.

On a calendar year basis, the total addition for private car use may not be negative. You must rectify this as follows:
– You do not take the personal contribution into account in the December tax return.
– You file a correction for November. You correct the own contribution of € 560 to € 400.

Schematic overview of the monthly processing

Wage periodAdditionOwn contribution of the employeeSend correctionAddition (after correction)Employee’s own contribution (after correction)
January€ 500€ 560no€ 500€ 560
February€ 500€ 560no€ 500€ 560
March€ 500€ 560no€ 500€ 560
April€ 500€ 560no€ 500€ 560
May€ 500€ 560no€ 500€ 560
June€ 500€ 560no€ 500€ 560
July€ 500€ 560no€ 500€ 560
August€ 500€ 560no€ 500€ 560
September€ 500€ 560no€ 500€ 560
October€ 500€ 560no€ 500€ 560
November€ 500€ 560yes€ 500€ 400
December€ 500€ 0no€ 500€ 0
total€ 6,000€ 6,160 € 6,000€ 6,000

1.3.8  Private use of a car and little or no pay in cash

If your employee receives little or no pay in cash (e.g. due to unpaid leave), you will also have to pay all wage taxes on the private use car addition. You may recover the wage tax/national insurance contributions and the healthcare insurance contributions, if you withhold them, from your employee (but not the employee insurance contributions and employers’ levy (Zvw). You can do this via a settlement in the next pay period. If you do not do this, 2 situations may occur:

  • You will only recoup this amount in a later pay period. You then give your employee a loan for this amount until you recover the amounts. The interest benefit on this loan is salary for your employee. You can also designate this wage as final tax pay.
  • You will no longer recover this amount from your employee. The amount is taxed as your employee’s net salary. You must convert this benefit into gross pay. You can also designate this net salary as final tax pay.

Employees with holiday vouchers

There are special tables for employees with holiday vouchers, because these employees do not receive pay during the holiday period. If you must add the addition for the private use of the car to the wages for these employees, you also have to do it during their holidays. Because of this, the amount of wage tax/national insurance contributions, employee insurance contributions and employer’s levy Zvw or Zvw contribution which you calculate on an annual basis is too low. In order to avoid this, you may calculate the addition over the pay period preceding or following the holiday period. You may also divide the addition over these 2 pay periods.

1.3.9  Reimbursements for charging station and electricity for electric car

You can have a charging station installed at your employee’s home or you can reimburse the costs of installing a charging station. These benefits for your employee are already included in the addition for private use and are not wages. This also applies to the electricity for the car and any necessary adjustments, such as an extra group in the meter cupboard and a meter to measure the consumption.

1.3.10  Providing a car for part of the calendar year

Are you providing your employee with a car for part of the calendar year? For example, because he does not work for you for the entire calendar year? In that case, you have to make the calculation for private use of the car time-dependent. To determine whether your employee drives more than 500 private kilometres on a calendar year basis (see paragraph 1.3.15), you must convert the private kilometres driven into the number of private kilometres your employee would drive in a whole calendar year.

Example 1
From 1 January to 31 March, you provide a car with a basis for the addition of private use of a car of € 24,000. This car is subject to an additional tax rate of 22%. During that period, your employee will drive 100 kilometres privately. Converted to a whole year, your employee would drive 12/3 x 100 = 400 private kilometres. You do not need to add anything to the salary, because your employee does not drive more than 500 kilometres privately on a calendar year basis.

Example 2
In the same period, your employee will not drive 100, but 200 kilometres privately. Converted to a whole year, your employee would drive 12/3 x 200 = 800 kilometres privately. That is more than 500 kilometres. On a calendar year basis, the addition is 22% of € 24,000 = € 5,280. Over the period 1 January to 31 March inclusive, the additional taxable benefit for private use is 3/12 x € 5,280 = € 1,320. For a pay period of 1 month the additional taxable benefit is € 440 per month.

If you make the car available in the course of a calendar month, the addition in that month is based on the number of calendar days on which the car was made available.

Example 3
You provide a car to your employee from 15 April. You have a pay period of one month and the car is subject to an additional tax rate of 22%. The basis for the addition is € 20,000.

The addition for April is € 195.56 (22% x € 20,000 = € 4,400; € 4,400 x 1/12 = € 366.67 : 30 days = € 12.22; € 12.22 x 16 = €195.56).

1.3.11  Provide another car in the course of the calendar year

If you provide another car to your employee in the course of the calendar year, you must calculate the addition if your employee drives a total of more than 500 kilometres privately in that year (see paragraph 1.3.15). You must calculate the addition for each car on a time-dependent basis.

Example 1
You provide a car from 1 January to 31 March. During this period, your employee will drive 50 kilometres privately with this car. From 1 April to 31 December, you provide another car. With this car your employee drives 300 kilometers privately. You do not need to add anything to the salary, because your employee drives a total of 350 kilometres privately on a calendar year basis.

Example 2
From 1 January to 31 October inclusive, you provide a car with a basis for the addition of private use car of € 24,000. From 1 November to 31 December, your employee will receive a car with a basis for the additional taxable benefit for private use car of € 30,000. Both cars are subject to an additional taxable benefit of 22%. During the period 1 January to 31 October, your employee drives 450 kilometres privately. In the period 1 November to 31 December he drives 100 kilometres privately. In total, he will drive 550 private kilometres in that calendar year.

On a calendar year basis, the addition for private use of a car for the first car is 22% of € 24,000 = € 5,280. Over the period 1 January to 31 October inclusive, the addition is 10/12 x € 5,280 = € 4,400. On a calendar year basis the addition for private use of a car for the 2nd car is 22% of € 30,000 = € 6,600. For the period 1 November to 31 December inclusive, the addition is 2/12 x € 6,600 = € 1.100. The total addition is € 4,400 + € 1,100 = € 5,500.

It is possible that you provide another car in a calendar year and that your employee only drives one of those cars privately. If that is more than 500 kilometres on a calendar year basis, you will still have to calculate and add private use for the car with which your employee did not drive privately.

Example 3
From 1 January up to and including 31 July, you provide a car with a basis for the addition of € 24,000. Your employee does not drive this car privately. Therefore, you do not add anything to your employee’s salary for the salary periods from January to July inclusive. From 1 August up to and including 31 December, you provide a car with a basis for the addition of the private use of € 30.000. With this car, your employee drives 1,000 kilometres privately from August to December. For the 1st car an additional tax rate of 22% applies, for the 2nd car (a car without CO2 emissions) an additional tax rate of 4%.

Because your employee drives more than 500 kilometres privately on a calendar year basis, you must include the addition for private use of the car to the salary for the entire calendar year. For the period January to July inclusive, you must therefore still add 7/12 x 22% of € 24,000 = € 3,080 to the salary. For a pay period of 1 month, the addition is € 440 per month. For the declaration periods that have passed, you must submit a correction. From 1 August, you must add 1/12 x 4% of € 30,000 = € 100 per month to your salary.

If you provide another car during the course of a calendar month, the addition of both cars is based on the number of calendar days on which they were available to the employee.

Example 4
From 17 April you provide another car to your employee. You have a pay period of one month and both cars are subject to an additional tax rate of 22%. The basis for the addition of car 1 (provided up to and including 16 April) is € 20,000, that of car 2 (provided from 17 April) € 25,000.

The addition for April for car 1 is € 195.56 (22% x € 20,000 = € 4,400; € 4,400 x 1/12 = € 366,67; € 366,67 : 30 days = € 12,22; € 12,22 x 16 = € 195,56).

For car 2 the additional charge is € 213.89 (22% x € 25,000 = € 5,500; € 5,500 x 1/12 = € 458.33; € 458.33 : 30 days = € 15.28; € 15,28 x 14 = € 213,89).

1.3.12  You provide more than 1 car at a time

Do you provide 2 or more cars to an employee at the same time? Then you must assess the private use per car. You apply the addition for private use of the car for each car with which the employee drives more than 500 private kilometres on a calendar year basis. If your employee does not drive more than 500 private kilometres with any car on a calendar year basis, you do not have to add anything (see paragraph 1.3.15).

Example
You provide an employee with 2 cars at the same time. The employee drives more than 500 private kilometres with car 1 on an annual basis. The employee can prove that he does not use car 2 privately. In that case, you only need to add car 1.

Reasonable application of these rules means that the addition for private use may be limited to 1 car if the employee is single or if only 1 person in his family has a driving licence. You only take into account the addition of the car with the highest catalogue value. If in the employee’s family 2 persons have a driver’s license, calculate the addition for 2 cars. You only take into account the addition of the 2 cars with the highest catalogue value.

If the tax authorities believe that you have the calculate the addition for more than 1 or more than 2 cars, the tax authorities have to prove why. In determining this, the tax authorities take into account the employee’s own cars that are just as suitable for private use as 1 of the cars provided.

1.3.13  Cars that are equipped and externally recognisable for certain services

For cars that are equipped for certain services and externally recognisable as such, the following applies for private use: for these cars, the tax authorities assume that your employees, on a calendar year, use the car for a maximum of 500 kilometres privately, unless it appears otherwise. These are cars that are used:

  • by the police
  • by the fire brigade
  • for the transport of sick and injured persons
  • for the transport of mortal remains
  • for the transportation of prisoners
  • for the transport of sick or injured animals
  • for cash transport

1.3.14 (Collective) agreement on no private use of car with the tax authorities

You can make an agreement with the tax authorities (Belastingdienst/team Auto/PGA, P.O. Box 4660, 8000 KA Zwolle) for (a group of) your employees that the private use of a car is not permitted. And that, for example, you supervise this. You lay down the agreement in writing. Your employee can use this agreement as evidence to prevent a taxable addition for private use of the car to his salary. He does not have to keep a trip registration.

1.3.15  No additional charge for up to 500 kilometres of private use

You may omit the addition for private use of a car if your employee drives a maximum of 500 kilometres privately on a calendar year basis. You may assume this in the following 3 cases:

  • Your employee has a conclusive trip registration showing that he does not drive more than 500 private kilometres (see paragraph 1.3.18).
  • You can use another type of evidence according to the so-called free evidence theory to prove that the employee does not drive more than 500 private kilometres (see paragraph 1.3.19).
  • You have a copy of your employee’s ‘Declaration of no private use of car’ (see paragraph 1.3.16).

1.3.16  Declaration of no private use of a car

If your employee drives a car on a calendar year basis for a maximum of 500 kilometres privately, he can apply for a ‘Declaration of no private use of a car’. Your employee can use an online form. For this he needs a DigiD.

Attention!
Your employee cannot request a declaration if he drives a car for which you have made a (collective) arrangement with the tax authorities for private use (see paragraph 1.3.14)

In some situations, your employee may not apply for a declaration for a delivery van (see paragraph 1.4.6).

At a request of the tax authorities, your employee must be able to convincingly prove during or after the end of a calendar year that he drives or has driven a maximum of 500 kilometres per calendar year privately, with a trip registration (see paragraph 1.3.18) or with other evidence (see paragraph 1.3.19). See paragraph 1.3.21 for information about the addition for private use of a car for the car industry.

You keep a copy of the ‘Declaration of no private use of a car’ with your administration. With the declaration you omit the addition from the next pay period on which you have to calculate the wages. You may not correct the addition to the taxable benefit for private use of a car for pay periods for which your employee has already been paid.

Example
You provided your employee with a car. On 23 May, you paid him the salary for May. In the payroll calculation you have taken into account the addition private use of a car. On 25 May, your employee will give you a copy of his ‘Declaration of no private use of a car’. Because of this declaration, you must omit the addition for private use car from June onwards. You may not correct the payroll calculation for January up to and including May.

You may not take a declaration into account if you know that your employee drives more than 500 kilometres privately on a calendar year basis with a car you provided.

Example
From January to May your employee has a car with a basis for the addition of private use car of € 24,000. Your employee drives the car during this period 1,000 kilometers private. The addition on a calendar year basis is 22% of € 24,000 = € 5,280. For a pay period of 1 month, you add € 440 per month to the salary.

On 1 June, your employee will receive another car with a basis for the addition of private use car of € 30,000. For this car, your employee will give you a ‘Declaration of no private use of a car’. Because you know that he has already driven 1,000 kilometres privately from January to May inclusive, you may not take the declaration into account (see paragraph 1.3.11). From 1 June onwards, you must therefore add 1/12 x 22% of € 30,000 = € 550 per month to your salary.

Because of the ‘Declaration of no private use of a car’, you will not receive an additional tax assessment if it turns out afterwards that your employee has applied for the declaration incorrectly, for example because he is going to drive more than 500 kilometres privately after all. In such a case, your employee will receive an additional tax assessment for the wage tax/ national insurance contributions, the employee insurance contributions and the Zvw contribution for the wage periods that have already passed. In that case, you will not have to pay any employer’s levy and employee insurance contributions yourself. The tax authorities can increase the additional assessment with interest or tax interest and a fine. An additional tax assessment is possible up to and including 5 years after the end of a calendar year.

Attention!
If you know that your employee has received the ‘Declaration of no private use of a car’ incorrectly, you must ignore the declaration and include the addition for private use in the salary.

Example
Your employee drives a car that he does not use privately with a basis for the addition private use car of € 24,000. You have received a ‘Declaration of no private use of a car’ from him. At the end of September, he will ask for the declaration to be withdrawn because he is going to drive more than 500 kilometres on a calendar year basis. The pay period is 1 month.

On the basis of this information, your employee will receive an additional tax assessment for wage tax / national insurance contributions, employee insurance contributions and the Zvw contribution on the addition for the private use of the car for the period January to September. The additional taxable benefit for private use of the car is 9/12 x 22% of € 24,000 = € 3,960. The tax authorities can increase the addition with a fine. In addition, the tax authorities calculate tax interest if they impose the assessment in a subsequent calendar year.

From 1 October, you must add 1/12 x 22% of € 24,000 = € 440 per month to his salary. Over the addition of private use of a car, you have to withhold wage tax/ national insurance contributions and employee insurance contributions, and pay employer’s levy Zvw or withhold the Zvw contribution.

1.3.17  Change or withdraw the Declaration of no private use of a car

The ‘Declaration of no private use of a car’ is valid for an indefinite period of time. Your employee must inform the tax authories of any changes. This concerns a (new) vehicle registration number or changes that lead to the revocation of the declaration.

Provide (New) license plate number

Your employee provides a (new) license plate with the form ‘Declaration no private use of a car: provide (new) license plate’. He can fill in and send this form online. For this he needs a DigiD. Your employee will receive a reply from the tax authorities within 2 weeks after they received the form.

Withdraw the ‘Declaration of no private use of a car’

Changes that lead to the withdrawal of the ‘Declaration of no private use of a car’, your employee must inform the tax authorities as soon as possible. If he does not do this or does not do so on time, your employee may be fined a maximum of € 5,514.

Your employee withdraws the declaration with the form ‘Declaration of no private use of a car: withdraw’. He can fill in and send this form online. For this he needs a DigiD. Your employee will receive a reply from the tax authorities within 2 weeks after they received the form about the withdrawal of the declaration.

If the declaration is withdrawn, your employee must inform you as soon as possible. If your employee tells the tax authorities that he will be driving more than 500 kilometres privately in the calendar year, you will receive a letter from the tax authorities about the withdrawal with information that is important to you as an employer.

The following changes will lead to the withdrawal of the declaration:

  • Your employee will drive more than 500 kilometres privately in the calendar year.
  • Your employee no longer has a car at his disposal.
  • Your employee is going to drive a delivery van that he cannot use outside working hours.
  • Your employee is going to drive a delivery van which is subject to a written ban on private use.
  • Your employee will be driving a delivery van that is (almost) exclusively suitable for transporting goods.
  • Your employee will drive a delivery van that is subject to final levy (see paragraph 1.4.5).
  • Your employee is going to drive a (van) car for which you have made a (collective) appointment with the tax authorities for private use.

Attention!
If you submit a ‘Declaration of exclusive business use of a delivery van’ on behalf of your employee, your employee must withdraw the ‘Declaration of no private use of a van’ himself (see paragraph 1.4.7).

The following changes do not lead to withdrawal of the declaration:

  • Your employee reports a change of license plate number.
  • Your employee reports the registration number that was not yet known when he applied for the declaration.

1.3.18  Trip registration

By means of a fully comprehensive trip registration, your employee can prove that he has driven a maximum of 500 kilometres privately in the calendar year. A trip is the one-way distance between 2 addresses. A trip with a mixed character is a ride if your employee drives both business and private kilometers during the trip.

Data for fully comprehensive trip registration

The trip registration is fully comprehensive if your employee registers the following data:

Car data

  • brand
  • type
  • license plate
  • period during which the car is at the employee’s disposal

Your employee must fill in the start date and, if you already know it, the end date.

Trip data

  • date
  • trip number (your employee must number the rides per day)
  • start position of the odometer
  • end position of the odometer
  • starting address
  • different route (your employee only has to fill in this route if it deviates from the usual route)
  • visiting address (our employee must fill in the visiting address if it concerns a business trip or if it concerns a business and private trip. In both cases, the visiting address is the business address your employee is visiting.
  • private trip? (your employee has to fill in if the trip was private. Only the purpose of a trip determines whether it was business or private. For example, if your employee visits the doctor during his work and uses the car to save time, this is considered a private trip)

If there are more users per car, the trip registration must show which user has made a trip. This can be done, for example, by means of an extra column in the registration.

The reports and accompanying documents form the verifiable trip registration that serves as proof that your employee drives a maximum of 500 kilometres privately. You can check the correctness of a trip registration with, for example, office diaries, order forms, garage notes and digital route planners. You must also keep these details with your payroll administration so that you can show them during an investigation by the tax authorities.

Trip registration system

You can also have the trip registration done automatically with a so-called trip registration system. This allows the driver to accurately record the number of kilometres driven by the car. The system automatically records a number of data per trip from which you can receive a written report. In this way, the system contributes to reducing administrative work. The driver must be able to indicate whether it’s a business or private trip. That is why it remains necessary to keep diaries and promissory notes, for example, in the case of an automated registration.

If you use a system with a Keurmerk RitRegistratieSystemen, the tax authorities assume that your trip registration is comprehensive. The tax authorities can still check whether a ride is business or private.

If you use a trip registration system, you must meet the following conditions:

  • The trip registration system shall contain the same data as in a manual fully comprehensive trip registration.
  • If the distance covered is determined with external systems such as GPS, this distance deviates from the kilometres according to the odometer. In this case, you must enter the difference between the distance covered according to the odometer and the distance covered according to the Trip Recorder with a separate correction trip in the Trip Recorder at least every 2 months. You divide the difference proportionally between the business and private kilometres driven during that period.

Example 1
Your employee travels from his home to work on a working day. He works all day at the same place and drives home in the evening. He must register 2 journeys that day.

Example 2
Your employee travels from his home to work on a working day. From work he travels to customer A, from customer A to customer B, from customer B to customer C, from customer C back to work and home at the end of his working day. So your employee has to register 6 journeys that day.

Attention!
If your employee makes a detour during a business trip, for example to take his child to the nursery, then that trip has a mixed character. The detour kilometres are private kilometres.

Driving instructors

For practical reasons, driving instructors only need to note the start and end position of the odometer per working day.

Simplified trip registration for delivery vans

For delivery vans you may use a simplified trip registration system (see paragraph 1.4.8).

1.3.19  Other evidence

A comprehensive trip registration, possibly with a ‘Declaration of no private use of a car’, is a way to prove that your employee drives a car for a maximum of 500 kilometres per calendar year privately. But your employee is not bound to this way. Other forms of proof are also acceptable. This is called free evidence. We mention here some forms that are acceptable as evidence in practice and some forms that are not.

Acceptable evidence

There is acceptable evidence if you and your employee have agreed in writing that private use is not permitted, for example as a supplement to the employment contract. Characteristics of this are:

  • You check the car use and you administer your findings.
  • Your employee is not insured for private use.
  • Your employee has a car of his own.
  • In case of violation of the prohibition, you impose an appropriate sanction, e.g. a fine proportionate to the payroll tax on private use.

For supporting evidence, you can also (in consultation with the tax authorities) record other data, such as work schedules, holiday overviews, sickness and leave statements, garage bills, damage reports, fines and the like.

In the case of an irregular travel pattern, e.g. the travel pattern of a representative, you should pay more attention to monitoring car use than in the case of a regular travel pattern. In consultation with the tax authorites, you can do the check on a random basis. During an investigation by the tax authorities, you must be able to demonstrate that you have paid sufficient attention to checking the use of the car.

Unacceptable evidence

In any case, the following methods are not acceptable as evidence:

  • There is only a written agreement between you and your employee that private use is prohibited. Maybe it includes a sanction, but nothing about control of the agreement. Nor has it been shown that there is actually control.
  • There is only a specified estimate of the business use of the car and commuting.

1.3.20  Cars older than 15 years

From the moment a car is older than 15 years, the economic value of the car forms the basis for the addition of private use of the car. The addition rate for all cars older than 15 years is 35% instead of 22%. For example, if the car is 15 years and 1 day old on 1 May, you take the total list value including VAT, the bpm and the accessories as the basis for the first 4 months (see paragraph 1.3.2). After that, you take the market value as the basis.

For the determination of this value, auction prices may give an indication. You can also look at the appraisal value of the car for the insurance or the current kilometre and lease prices. The economic value can be higher than the original new price of the car.

1.3.21  Addition private use of a car for the automotive industry

If you are an employer in the automotive industry, your employees may use cars differently. This can make it difficult to determine the basis for the additional taxable benefit for private use of the cars. That is why you can determine the basis in a practical way with the ‘Handreiking particuliere gebruik auto’ (Guide for private car use). You can download this guide from belastingdienst.nl.

Supervision

Do you add on the basis of the ‘Handreiking private use car’? If so, you must ensure that your records show for each employee on which car the basis for the addition of private use car per day is based. And why you based the addition on that car. That is why you must regularly check the correctness and completeness of the registration, so that you can correctly process the additional taxable benefit in your payroll tax return. You will find guidelines for this in the handbook. The handbook also contains guidelines for the supervision that you must carry out if you do not add tax.

Car rental industry: prove number of private kilometers

Are you an employer in the car rental industry? Then you probably have employees who have several cars from the rental fleet at their disposal for exclusively the following activities:

  • pick up and drop off
  • go through the car wash
  • refuel
  • transport and collection for maintenance and repair

For you and these employees (hikers), keeping a trip registration is often a big burden. For practical reasons, you are therefore allowed to provide proof of the number of private kilometres driven with a ban on private use and use for commuting of your company cars. The following conditions apply:

  • You lay down the ban in a written agreement.
  • You supervise compliance with the ban.
  • In case of violation of the ban, you will impose a sanction.
  • Your employee does not apply for a ‘Declaration of no private use of a car’.

You can download a Sample agreement banning the private use of a car from belastingdienst.nl.

1.3.22  Consequences of the addition for wage-related schemes

The additional taxable benefit for private car use also affects wage-related schemes such as the normal wage scheme and the 30% ruling. The additional taxable benefit for private use of a car also has consequences for, for example, the healthcare and rent allowance.

No pension may be built up on the addition to the private use of a car.

1.3.23  Processing the private use of a car in the wage tax return

For each pay period, you add to your employee’s salary a time-proportional part of the addition for private car use. You enter this amount in column 4 of the pay sheet. You also enter the personal contribution for private use of your employee’s car as a negative amount in column 4 of the pay sheet.

In the employee details in the wage tax return, you state the wage on which you have calculated the wage taxes. In addition, you state the following data:

  • the value of the private use of the car before deduction of his or her personal contribution for private use of the car
  • your employee’s personal contribution for the private use of the car

The addition to the salary due to the private use of one or more cars by an employee, is the difference between the value of the private use of the car and the employee’s personal contribution.

The employee contribution may only be entered if it concerns a contribution for the period in which a car is provided as a ‘taxed’ car. A ‘taxed’ car in this context is a car for which there is a value of private use of the car. This is expressed in the wage tax return by a – as of January 1 of the year in question – cumulative value in this section of more than € 0.

You may not fill in a personal contribution for a ‘non-taxed’ car in this section. Not even if there is also a ‘taxed’ car. In this context, an “untaxed” car is a car for which – as of January 1 of the year in question – cumulatively no amount or € 0 is included in the section ‘Value private use of cars’.

The addition to the salary in connection with this taxed car(s) may not be negative per calendar year. You must therefore consider both items (the value of the private use of the car and the employee’s personal contribution) cumulatively per year. As a result, the employee’s contribution may be higher than the value of the private use of the car in a wage tax period (month, 4 weeks or half a year), but may not be higher than the value of the private use of the car per calendar year. In other words, in an individual return, the balance may be negative, but not cumulatively per year.

It is possible that you have provided a car to your employee, but do not include the private use of the car in his/her salary. In this case, you must state 1 of the following codes in the wage tax return:

  • Code 1 (Arrangement via employer with the tax authorities) if you have made a collective agreement with the tax authorities (see paragraph 1.3.14). You must also use this code if you have banned the private use of a delivery van.
  • Code 2 (Employee has a ‘Declaration of no private use of a car’ from the tax authorities) if your employee has submitted a copy of the ‘Declaration of no private use of a car’ to you (see paragraph 1.3.16)
  • Code 3 (Other proof of private use of a car and delivery van) if you have not made a collective agreement with the tax authorities, or if your employee has not submitted a ‘Declaration of no private use of a car’ to you. You also use this code for a delivery van that is only suitable for transporting goods (see paragraph 1.4.3), or which your employee cannot use outside working hours (see paragraph 1.4.2).
  • Code 5 (Continuous alternating use of a delivery van) if you apply final levy for the employee, because he and other employees continuously use the delivery van in alternating situations (see paragraph 1.4.5)
  • Code 7 (‘Declarationof exclusive business use of a van’) if you have submitted this statement to the tax authorities on behalf of your employee (see paragraph 1.4.7)

1.3.24  Flowchart company car

Use the flow chart below if you make a company car available to your employee.

Attention!
The addition percentages in the flowchart only apply to passenger cars with a date of 1st admission in 2021. For the addition percentages of other cars see paragraph 1.3.4, 1.3.5 and 1.3.6.

1.4  Travelling with a company delivery van

You can provide your employee with a company delivery van. By the term ‘delivery van’ we mean a car with a loading space that is not equipped for the transport of persons and that has a loading floor. The car must meet the design requirements for the loading space of a delivery van and must be permitted to be driven with a B driving licence. On belastingdienst.nl at ‘Requirements for conversion and interior design‘ you can find out whether your delivery van meets the interior design requirements.

If your employee is also allowed to use the delivery van you provide for private purposes, there is a special rule for private use: the additional taxable benefit. The same applies here as for the provision of a passenger car (see paragraph 1.3), but there are additional rules for delivery vans. These rules can be found in this paragraph. The following subjects are discussed:

  • ban on the private use of a delivery van (see paragraph 1.4.1)
  • use of a delivery van outside working hours is not possible (see paragraph 1.4.2).
  • delivery van (almost) exclusively suitable for the transport of goods (see paragraph 1.4.3)
  • calculation of the addition (see paragraph 1.4.4)
  • continuous alternating use of delivery vans (see paragraph 1.4.5)
  • ‘declaration of no private use of car’ (see paragraph 1.4.6)
  • declaration of exclusive business use of delivery van’ (see paragraph 1.4.7)
  • simplified trip registration (see paragraph 1.4.8)
  • flow chart of provided delivery vans (see paragraph 1.4.9)

As an employer in the car sector you can also apply the ‘Handreiking particuliere gebruik auto’ (Guide for private car use) for delivery vans (see paragraph 1.3.21).

Attention!
The advantage of the private use of the company car is always designated as employee’s salary. Therefore, you cannot designate this wage as final tax pay. There is one exception: the addition for extraordinary security measures (see paragraph 1.3.2) can be designated as final tax pay.

1.4.1  Ban on the private use of a delivery van

If you provide a delivery van for which you forbid private use, the regulations for private car use do not apply. Therefore, you do not have to add anything to the salary for the private use of the car. However, you must meet the following conditions:

  • You record the ban in a written agreement and keep it with your payroll administration.
  • You enforce your ban. If you are inspected by the tax authorities, you must be able to demonstrate your supervision. That is why you must record your observations and keep them in your payroll administration. You can make agreements with the tax authorities (Belastingdienst/team Auto/PGA, P.O. Box 4660, 8000 KA Zwolle) about the degree of supervision and the storage period(s) of your observations. You can supervise compliance with the ban by, for example:
    • compare the odometer readings with the reports of the number of kilometres driven that you have agreed with the leasing company(s)
    • compare the odometer readings with the amount of fuel used
    • check data on traffic fines, damage reports or filling up outside working hours
  • In case of violation of the ban, you impose a sanction, for example:
    • a fine commensurate with the payroll tax on private use
    • resignation

The tax authorities have made an example agreement with which you can record your ban on private use in writing. You can download the example agreement from belastingdienst.nl.

If you do not use the sample agreement or if you change it, the written record of your ban may not (or no longer) suffice. To prevent this, you can submit your appointment for approval to the tax authorities (Belastingdienst/team Auto/PGA, P.O. Box 4660, 8000 KA Zwolle).

A ban on the private use of a delivery van is indicated in the payroll tax return with code 1 (Agreement via employer with the tax autorithies).

1.4.2  It is not possible to use a delivery van outside working hours

If your employee is unable to use a delivery van outside working hours, the rule for private use of a car does not apply. Therefore, you do not have to add anything to the salary for private use. This is the case, for example, with a delivery van that your employee puts on your company premises outside working hours, where it is verifiable that private use is not possible.

1.4.3  Delivery van (almost) exclusively suitable for the transport of goods

If a provided delivery van is (almost) exclusively suitable for the transport of goods, the arrangement for private use does not apply. If the employee uses the delivery van for private purposes, the fair market value of the private kilometres driven is the employee’s salary. This is the case, for example, with a delivery van with only a driver’s seat if the attachment points of the passenger seat have been grinded away or welded shut.

The value in economic terms is the number of private kilometres multiplied by the kilometre price of the delivery van. The kilometre price consists of the cost per kilometre of the car in terms of fuel, maintenance, repair, depreciation, vehicle tax and insurance. This wage is reduced by your employee’s personal contribution for the private use of the delivery van. The outcome may not be negative.

Your employee does not need to keep a trip registration for this van.

1.4.4  Calculation of the addition

The basis for calculating the addition for a delivery van is the same as for a passenger car (see paragraph 1.3.2). Only if the registration number of the delivery van was allocated before 1 July 2005 the basis is different. In that case the basis of assessment for the addition to the taxable income for private use is used, including the VAT and without the bpm. As a rule, this basis includes accessories that were fitted ‘ex works’ or by the dealer or importer prior to the date of the registration number being granted, regardless of whether you have already made the car available to your employee or not.

Accessories that were exempted for the bpm also count towards the basis for the addition of private use of the car.

1.4.5  Continuous alternating use of delivery van

Due to the nature of the work, 2 or more employees may use a delivery van continuously in alternation. In principle, you must then also make use of the normal scheme for private car use (see paragraph 1.3.1). However, in this situation it may be difficult to apply the scheme individually. In that case you must apply the final levy for private use.

Example 1
A company has 3 delivery vans and 7 mechanics. In case of an alert they randomly use 1 of the available delivery vans. In this situation there is a continuous alternating use and you have to apply the final levy.

Example 2
2 of your employees each have a van. They decide to exchange these cars on a daily basis. There is no continuous alternating use at the moment. The final levy for these delivery vans is not possible. There is also no continuous alternating use if employee A uses a delivery van one week and employee B uses it the following week.

The final levy is a fixed amount of € 300 per delivery van on an annual basis. For a pay period of one month you then declare € 25 per van in each payroll tax return. You can indicate the application of the final levy in the payroll tax returns by means of code 5 (continuously alternating use of delivery vans). With this final levy your employee does not have to keep a trip registration.

1.4.6  Declaration of no private use of a car

Just as for a passenger car, for a delivery van the employee may apply for a ‘Declaration of no private use of a car’ (see paragraph 1.3.16). However, this is not permitted for a delivery van in the following situations:

  • Your employee drives a delivery van for which you have made a (collective) agreement with the tax authorities about private use (see paragraph 1.3.14).
  • Your employee drives a delivery van to which the private car use scheme does not apply (see paragraph 1.4.1, 1.4.2 and 1.4.3).
  • Your employee drives a delivery van for which you apply final levy, because 2 or more employees use this van continuously alternately due to the nature of the work (see paragraph 1.4.5).
  • For this delivery van your employee has a ‘Declaration of exclusive business use of delivery van’ (see paragraph 1.4.7).

See paragraph 1.3.16 for information on the ‘Declaration of no private use of a car’.

1.4.7  Declaration of exclusive business use of delivery van

Does your employee have a company van that he uses exclusively for business purposes (i.e.: 0 kilometres for private use)? If so, you can submit the ‘Declaration of exclusive business use of delivery van’ to the tax authorities on behalf of your employee.

From the effective date of the declaration:

  • you don’t have to add the private use of a car to your employee’s salary;
  • your employee doesn’t need to keep track of his trips.

Does an employee have a ‘Declaration of exclusive business use of delivery van’ for a delivery van? If so, you cannot use a ‘Declaration of no private use of a delivery van’ for that employee.

Submitting the declaration

You are submitting the ‘Declaration of exclusive business use of a delivery van’ on behalf of your employee. You do this digitally via ‘Login for entrepreneurs‘ on the website of the tax authorities. After sending, you will make a printout of the declaration. Have your employee sign it and keep it with the payroll administration. The statement is valid for an indefinite period of time. You and your employee will both receive a confirmation of receipt of the declaration from the tax authorities.

From the effective date of the declaration, your employee may not use the delivery van privately. If the tax authorites find the van during a check-up at an unusual time or at a special location, they may ask you and your employee to demonstrate the business nature of the journey. Therefore, keep supporting documents in a safe place.

What you need to know about the declaration

If your employee has a ‘Declaration of exclusive business use of a delivery van’, the following is important:

  • The ‘Declaration of exclusive business use of a delivery van’ does not apply retroactively. Does your employee already have the van at his disposal on 1 January 2021 and you only submit the declaration for him at a later date? If so, your employee must be able to prove that he has not driven more than 500 kilometres privately with the delivery van on an annual basis up to the effective date of the declaration (see paragraph 1.3.15).
  • If your employee has a ‘Declaration of no private use of a car’ for the delivery van, he must withdraw it and let you know. He must withdraw this declaration on the day on which you submit the ‘Declaration of exclusive business use of a delivery van’ for him.
  • Each combination of an employee and a delivery van requires a separate ‘Declaration of exclusive business use of a delivery van’. 2 employees who use the same delivery van exclusively for business purposes, each should have a declaration. And an employee who uses several delivery vans exclusively for business purposes must have a declaration for each van.
  • In the wage tax return you use code 7 to indicate that you have not added anything for an employee because he has a ‘Declaration of exclusive business use of a delivery van’.
  • Does anything change in the situation? For example, because your employee gets another delivery van? Or because your employee is going to use the van privately after all? In that case, both you and your employee have an obligation to report these changes to the tax authorities on time. This may mean that your employee has to ask you to withdraw the declaration.

‘Declaration of exclusive business use of a delivery van’ not possible

In a number of cases it is not possible to submit a ‘Declaration of exclusive business use of a delivery van’ for your employee:

  • Your employee has already driven more than 500 kilometres privately in the calendar year.
  • Your employee drives a delivery van for which you have made a (collective) agreement with the tax authorities about the private use of the car (see paragraph 1.3.14).
  • Your employee drives a delivery van to which the private car use scheme does not apply (see paragraph 1.4.1, 1.4.2 and 1.4.3).
  • Your employee drives a delivery van for which you apply final levy, because 2 or more employees use this van continuously alternately due to the nature of the work (see paragraph 1.4.5).

Withdraw the declaration at the request of your employee

In the following situations, your employee must ask you to withdraw the ‘Declaration of exclusive business use for a delivery van’:

  • Your employee no longer has the van.
  • Your employee will drive the van privately.
  • Your employee wrongfully asked you to submit the declaration.
  • Your employee is not allowed to use the van privately because of another arrangement.

You withdraw the declaration on behalf of your employee. You can do this digitally via ‘Login for entrepreneurs‘ on the website of the tax authorities using the form ‘Declaration of exclusive business use of a delivery van’. After sending, you will make a printout of the revocation of the declaration. Have your employee sign it and keep it with the payroll administration. Both you and your employee will then receive confirmation of receipt from the tax authorities stating that the ‘Declaration of exclusive business use of delivery a van’ has been withdrawn.

Your employee and you may be fined up to a maximum of € 5,514 for not withdrawing or not withdrawing in time the ‘Declaration of exclusive business use of a delivery van’.

If you withdraw the declaration before your employee uses the van for private purposes, the tax authorities will assume that he did not drive any private kilometres with the van during the period in which he had the declaration. In that case, the employee can apply for a ‘Declaration of no private use of the car’ if he does not drive more than 500 private kilometres on a calendar year basis and keeps a trip registration as of that date.

Withdraw declaration on own initiative

It may be the case that you know or suspect that your employee is using the van privately after all, but he does not want you to withdraw the declaration. In that case, you must report this to the tax authorities. You can then send a letter to: Belastingdienst/team Auto/PGA Response number 2555, 8000 WZ Zwolle.

In the letter you explain why you suspect or know that your employee drives privately. In addition, you mention:

  • your details
  • your wage tax number
  • the name and address of your employee
  • your employee’s citizen service number
  • the registration number of the van

Your employee can then receive an order from the tax authorities stating that they will withdraw the declaration and as of when. Your employee can object to this. In addition, your employee can receive an additional assessment for wage tax and national insurance contributions, employee insurance contributions and any Zvw contribution for the period in which he or she had the van at his or her disposal. In that case you will be notified by the tax authorities as of when you must add the addition to the employee’s wages.

If you know that your employee drives the delivery van privately, you will have to add the addition to the salary from that moment on. If you suspect private use, wait for the decision of the tax authorities after your report.

Post-tax assessment and fine

Are you or your employee not able to prove business use? Then the tax authorites assume that your employee has driven more than 500 kilometres per year privately with the van. Your employee will receive an additional assessment for wage tax/ national insurance contributions, employee insurance contributions and the Zvw contribution for the period for which you wrongly did not add anything for the private use of the van. Your employee may also be fined.

Have you not complied with your reporting obligation? Or have you given permission for the private use of the delivery van? Then you must correct your declaration for 2021. For declaration periods of 2020 and earlier, you must submit separate corrections and you will receive an additional tax assessment. You may also be fined. You can recover the wage tax/national insurance contributions and the healthcare insurance contributions from your employee. If you do not do this, you must tax this benefit as the employee’s wage. You may also be able to designate this wage as final tax pay.

Example: partial private use car
An employee starts with you on 1 March. Because the new delivery van is not yet available, he will have a passenger car at his disposal the 1st month. Your employee must submit a ‘Declaration of no private use of car’ and keep a trip registration. In March he will drive 60 kilometres privately.

The new delivery van will be at the employee’s disposal as of 1 April. He informs the tax authorities that the ‘Declaration of no private use of a car’ must be withdrawn as of 1 April. On 1 April, you must submit the ‘Declaration of exclusive business use of a delivery van’ on his behalf, with the commencement date of 5 April. Your employee keeps a trip registration for another 4 days, does not drive private kilometres with the van and then stops keeping the trip registration. He keeps his agenda with appointments. You keep all work orders, so you can always show which trips your employee has made.

As of 1 November, your employee will be assigned to a different position. The position includes a passenger car, which your employee would also like to use privately. He must ask you to revoke the ‘Declaration of exclusive business use for a delivery van’ with effect from 1 November, because he will then no longer have the van at his disposal. If your employee is going to drive for private purposes without a trip registration or other proof that he does not drive more than 500 private kilometres, you will have to add up for the passenger car as of 1 November. And your employee will receive an additional tax assessment for wage tax / national insurance contributions, employee insurance contributions and Zvw contribution for the period from March to November.

To prevent this from happening, your employee will immediately apply again for a ‘Declaration of no private use of a car’ and will keep a trip registration as of November 1st. He calculates how much private kilometres he can drive until January 1st. This year he is allowed to drive a total of 416 (10/12 of 500) kilometres privately, because he only had a car at his disposal from 1 March. In March he’s been private for 60 kilometers. In the period from 1 November to 1 January, he can therefore drive a maximum of 356 kilometres privately, without having to pay tax for the private use of the provided cars.

On 1 January of the new year, your employee will have the ‘Declaration of no private use of a car’ withdrawn by the tax authorities, because he will drive more than 500 kilometres privately with the car. You count the addition of private car use to the employee’s salary.

1.4.8  Simplified trip registration

You may omit the addition for private use of a delivery van if it appears that your employee drives a maximum of 500 kilometres privately on a calendar year basis. You may also omit the additional taxable benefit if your employee has provided you with a copy of his ‘Declaration of no private use of a car’. In both situations, the employee can provide proof with a trip registration. In this registration he has to register every business trip and every private trip.

If, due to the nature of the work, your employee (often) has a lot of rides in a day, keeping a rides registration can be a big administrative and financial burden for you and your employee, because the business rides are kept during working hours. In this case, for practical reasons, proof can be provided by means of a simplified trip registration. This is subject to the condition that you have agreed this with your employee in writing:

  • the employee has a simplified trip registration
  • private use during working hours and lunchtime is not allowed
  • you have information about business destinations in your records

The tax authorities have made an example agreement with which you can record the agreement in writing. In the explanation of the example agreement you will find how the simplified trip registration looks like. You can download this example agreement from belastingdienst.nl.

If you do not use the example agreement or if you change it, the written record of the agreement may not (or no longer) suffice. To prevent this, you can submit your agreement for approval to the tax authorities (Belastingdienst/team Auto/PGA, P.O. Box 4660, 8000 KA Zwolle).

1.4.9  Flowchart provided delivery van

Use the flow chart below if you provide a delivery van to your employee.

Attention!
The addition percentages in the flow chart only apply to delivery vans with a date of 1st admission in 2021. For the addition percentages for other vans see paragraph 1.3.4, 1.3.5 and 1.3.6.

1.5  Travelling by another means of transport of the business

If you provide your employee with a means of transport other than a passenger car or delivery van, such as a motorbike, moped or (electric) scooter, the economic value of your employee’s private use is the employee’s wage. You may also refer to this wage as final tax levy.

The value is the number of private kilometres multiplied by the actual kilometre price and reduced by your employee’s personal contribution for private use. The kilometre price consists of the cost per kilometre of a means of transport in terms of fuel, maintenance, repair, depreciation, vehicle tax and insurance. If this results in a negative amount, you may not deduct this from the salary. When calculating the number of private kilometres, the kilometres for commuting are business kilometres.

If you make a means of transport available to your employee, this is transport on behalf of the employer. A mileage allowance is then your employee’s wage (see paragraph 1.9).

For more information about reimbursing, providing or making available a bicycle, please refer to paragraph 1.7.

1.6  Travelling by taxi, boat or plane

If your employee travels by taxi, boat or plane for work, you may reimburse the actual travel expenses without tax. The maximum untaxed reimbursement of € 0.19 per kilometre therefore does not apply to these means of transport. The untaxed reimbursement of the actual travel costs is a specific exemption. If you meet the conditions, we will assume that you have designated this reimbursement as final tax pay.

For these means of transport, you may also give a fixed, tax-free expense allowance if you meet the conditions (LINK).

If you provide boat or plane tickets to your employee for travel for work, this is tax-free (targeted exemption). If you meet the conditions, we will assume that you have designated that provision as final levy. In that case, you may not pay a tax free kilometre allowance to your employee, because this is transport on behalf of the employer (see paragraph 1.9). If you do pay an allowance, this will be your employee’s wage. You can also designate this wage as final tax pay.

1.7  Cycling

In this paragraph you can read which rules apply if you reimburse, provide or make available a bicycle to your employee. These rules also apply to an electric bicycle, such as an e-bike or speed pedelec.

This section deals with this:

  • reimbursement of a bicycle (see paragraph 1.7.1)
  • provision of a bicycle (see paragraph 1.7.2)
  • making a bicycle available (see paragraph 1.7.3)
  • bicycle related matters and bicycle insurance (see paragraph 1.7.4)
  • bicycle flow chart (see paragraph 1.7.5)

See paragraph 1.10.1 for information about reimbursing parking costs and providing a parking space.

1.7.1  Reimbursement of a bicycle

If you compensate your employee for (part of) the purchase price of a bicycle he has purchased, this compensation is the employee’s salary. But you can also designate this wage as final tax pay.

If you pay your employee a tax-free (fixed) allowance of a maximum of € 0.19 per kilometre (targeted exemption) for business trips for which he uses the bicycle, the tax authorities assume that you have designated the allowance as final tax pay (see paragraph 1.1.1 and 1.1.2).

1.7.2  Provision of a bicycle

If you have provided your employee with a bicycle, your employee will become the owner of the bicycle. The invoice value or economic value of the bicycle is your employee’s salary. However, you can also designate this salary as final tax pay.

You may pay your employee a tax-free (fixed) allowance of up to € 0.19 per kilometre (targeted exemption) for business trips for which he uses the bicycle, in which case we will assume that you have designated the allowance as final tax pay (see paragraph 1.1.1 and 1.1.2).

1.7.3  Making a bicycle available

If you make a bicycle available to your employee, the bicycle remains your property. If you make an (electric) bicycle available to your employee for commuting purposes, the bicycle is in any case also considered to have been made available for private use. You must add an annual amount to your employee’s salary for this private use. Unlike in the case of a company car, there is no possibility to provide evidence to the contrary in the case of minor private use. The value of this private use ion an annual basis is set on 7% of the value (including turnover tax) of the (electric) bicycle, insofar as this is more than a contribution from the employee for private use. The value of the bicycle is the consumer advice price publicly announced in the Netherlands by the manufacturer or importer. The RAI association has set up a database for this purpose. This database can be viewed at www.bijtellingfietsvandezaak.nl.

If the original recommended retail price cannot be determined, you can use the recommended retail price (including VAT) of the most comparable bicycle.

The addition is wages in kind. You must deduct wage tax/national insurance contributions, pay employee insurance contributions and pay the Zvw employer levy or deduct the Zvw contribution. You can also designate this wage as final tax pay and charge it to the free space. There is no entitlement to a tax-free allowance of € 0.19 per kilometre for kilometres travelled by business bicycle.

You may not pay your employee a (fixed) tax-free allowance for business trips for which he uses the bicycle, because this is transport on behalf of the employer (see paragraph 1.9).

1.7.4  Bicycle related matters and bicycle insurance

An allowance for or a provision of bicycle-related items and bicycle insurance is the employee’s wage. However, you can also designate this wage as final tax pay.

Examples of things related to the bicycle are: a rain suit, repair costs, an extra lock or a support for the bag. If you make a bicycle available, the reimbursement of the repair costs, an additional lock or aid for the bag not a salary, but compensation for intermediate costs. A rain suit that you make available to your employee is your employee’s salary. But you can also designate this wage as final tax pay.

1.7.5  Flowchart bike

Use this flow chart if your employee travels by bike.

1.8  Carpool scheme

It may be that your employee takes one or more colleagues in the car to work, so-called carpooling. We distinguish the following situations for the question of which tax-free travel allowances you can then pay:

  • your employee travels with his own car (see paragraph 1.8.1).
  • your employee travels with a company car (see paragraph 1.8.2).

1.8.1  Your employee travels with his own car

You may pay your employee the tax-free maximum allowance of € 0.19 per kilometre. This is a targeted exemption. If you meet the conditions, up to and including the maximum of € 0.19 per kilometre, we assume that you have designated this reimbursement as final tax pay (see paragraph 1.1.1 and 1.1.2).

If you organise the carpooling yourself and arrange for your employee to pick up one or more colleagues, he may have to make a detour. In that case, you may also pay your employee a tax-free allowance of up to € 0.19 per kilometre for the detour kilometres. For colleagues who make a detour, the employer will provide transport (see paragraph 1.9). You may not pay them a tax-free compensation.

If your employee decides to take one or more colleagues with him/herself, you may also pay a tax-free allowance of up to € 0.19 per kilometre to those colleagues. You may however not pay a tax-free allowance for any detour kilometres to your employee who drives, as these kilometres are of a private nature.

Attention!
You do not organise carpooling yourself if, for example, you keep a registration for your employees who are interested in carpooling. Nor if you ask your employees to tell you how they organised the carpooling.

1.8.2  Your employee travels with a company car

If your employee travels with a company car, he will be transported by the employer. In that case, you may not pay him a tax-free travel allowance (see paragraph 1.9).

If you organise your employee to take 1 or more colleagues with him/her in the company car, the employer will also provide transport for those colleagues. In that case, you may not pay them a tax-free travel allowance either.

If your employee decides to take 1 or more colleagues with him/her in the company car, you may pay the colleague(s) a tax-free travel allowance of up to € 0.19 per kilometre. This is a targeted exemption. If you meet the conditions, up to and including the maximum of € 0.19 per kilometre, the tax authorities assume that you have designated the reimbursement as final tax pay.

1.9  Transport on behalf of the employer

In the following situations there is transport on behalf of the employer:

  • You organise the transport of your employee, for example by means of a staff bus or by providing a company car or bicycle.
  • You arrange for your employee to drive in the private means of transport of a colleague who receives compensation for this.
  • Your employee travels by public transport with tickets you have purchased.

You may not pay an untaxed mileage allowance in these situations. If you pay an allowance, this will be your employee’s salary. You can also designate this wage as final tax pay.

1.10  Parking facilities

In this paragraph you can read which rules you must take into account when reimbursing, providing or making available parking facilities to your employee. It makes a difference whether or not:

  • your employee travels by his own means of transport (see paragraph 1.10.1)
  • your employee travels with a means of transport of the company (see paragraph 1.10.2)

In both situations, you must then check where the parking space is located: in or near your employee’s home or at the place of work.

With a parking space you can think of a (fixed) parking space, parking deck, garage or driveway for a car, but also a parking space for a motorbike or a bicycle. The place of work can be your employee’s permanent workplace, but also the address of a customer.

1.10.1  Your employee travels by his own means of transport

Parking at the employee’s home

Reimbursing, providing and making available parking facilities in or near your employee’s home is taxed. However, you can also designate this as final tax pay.

Parking at work: parking at or near the workplace

Do your employees use a car park or garage on your premises? Then these are part of the workplace. This parking facility is not taxed (nil valuation).

Do your employees use a parking space in the vicinity of the workplace? Then this is also part of the workplace if you are responsible for that parking space. This means that an employee can successfully hold you liable if, for example, his car is damaged as a result of your negligence. In that case, you may provide this parking space free of charge.

If the employee cannot successfully hold you liable, then the provision of the parking facility is taxed.

Parking at work: parking in other places

For other parking spaces and garages used by your employees, you have no (health and safety) responsibility. Reimbursing, providing or making available parking facilities at work, for example with a parking card for parking at a customer’s premises, is, in these cases, the employee’s wages to the extent that these wages, together with a kilometre allowance from you (or a fixed amount), exceed € 0.19 per kilometre (see paragraph 1.1.4). You value these parking facilities at market value or invoice value. However, you can also designate this as final tax pay.

1.10.2  Your employee travels with a means of transport of the company

The following applies when reimbursing, providing and making available a parking space or parking facility:

  • Does your employee have a parking permit or a parking place in his name for a parking facility at his home that can also be used for other means of transport? If so, the reimbursement of the costs of the parking permit or parking facility, or the provision or posting thereof, is your employee’s wage. You may also designate this wage as final tax pay.
  • If your employee has a parking permit with a registration number or a parking facility that is only intended for the means of transport of the business, the reimbursement, provision or posting of the permit or parking facility is not part of the wages. The costs of the parking permit or parking facility are part of the intermediate costs.
  • If the employee puts the means of transport of the business in his garage, there is sometimes a real (business) rental situation. This is the case if your employee uses the garage exclusively for the means of transport of the business. In that case, you can give the employee a tax-free compensation in the form of rent for the use of the garage. If the garage remains partly at the disposal of your employee, for example for storage, there is no real letting situation. An allowance for the use of the garage is then your employee’s salary. You can also designate the compensation as final tax pay.

1.11  Travel costs for periodical family visits

Do you reimburse travel expenses to employees who stay in the place where they work (e.g. in rooms or internally) and periodically visit their family? In that case, the same applies to this travel allowance as for other business trips. If your employee uses his own means of transport, you may therefore reimburse him a maximum of € 0.19 per kilometre tax-free. If your employee travels by taxi, boat or plane, you may reimburse the actual travel expenses tax-free (see paragraph 1.6).

Seafarers’ travel expenses

Your employees who work as captain, ship’s officer or ship’s companion on a seagoing vessel make journeys by their own means of transport between their home or place of residence on shore and the berth of the vessel. The travel allowances for these seafarers for trips between their home or place of residence ashore and the berth of the ship are tax-free up to a maximum of € 0.19 per kilometre.

If the partner or children belonging to the family of these seafarers make trips between the home or place of residence of your employee ashore and the ship, you may reimburse these travel costs to the employee up to a maximum of € 0.19 per kilometre tax-free. This is only allowed if the ship is in the port of Dunkirk or Hamburg for a very short time or in one of the ports in between.

Attention!
If you pay an allowance higher than € 0.19 per kilometre to your employee, the excess is taxed as the employee’s salary. You may also designate this excess as final tax pay.

1.12  Temporary other transport due to road works

Does your employee make use of temporary, specially organised transport due to road works? Then the compensation you pay for that special transport is taxed as the employee’s salary. But you can also designate this compensation as final tax pay.

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