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BPM new rules import tax on cars

In the Netherlands a substantial tax is levied when a vehicle is imported from abroad (BPM). We, Dutch tax residents think maybe too much, but Scandinavian country have even higher tax rates applied to import of cars. Driving a foreign license plated car as a Dutch tax resident is forbidden. There are some deductions applicable to the high tax rate, but from January 1 2015 those will disappear. How does it work?

The value of the imported car needs to be determined. This is done based on guidelines set by the Customs, which department, within the tax organization, impose import tax on cars. The most common practice is to purchase a wreck abroad of an expensive car. A valuator will make a report that the current value of the car is substantially lower than the price listed based on the age of the car. This lower value will be the value for which the car is imported. The car immediately travels to an Easter European country where it will be transformed into a beautiful saloon with all options desirable and sold for top price in the Netherlands. The yield on this vehicle is possible due to the low import value.

BPM new rules

To prevent this practice the rules for the valuation of import cars will change as per January 1, 2015 as follows. The value of the car is set by the pricelist based on make, details and year of build. So you can show a wreck with a current value of EUR 5000, but if that is in fact a German desired car build in 2013 with an official current value of EUR 100.000, then the tax will be due over EUR 100.000 even if it is a wreck. This gives the system more logic, as no wreck will be imported anymore, hence no wrecks can be sold as if new anymore.

On the other hand, if you would like to benefit from the possibility to have a valuator assess the car for less value than the pricelist, this is still possible, even without a wreck. You can also import an over the top car. Big engine, fully filled with options, expensive color etc. This is regarded highly unlikely to be sellable in the Netherlands, hence less valuable, so you can save a substantial part of the import tax due. This is still possible till the end of this year.

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