Help my employer having me drive a non-Dutch license plated car, is that a problem?
Driving a non-Dutch license plated car
The rule in the Netherlands is that you cannot drive a non-Dutch license plated car if you are a Dutch tax resident. It is a very rigid rule in the sense that you can be stopped by the police, but often the customs, and asked to pay the tax we impose on the car instantly. And the ‘you’ is the person driving. It could be your mother in-law who borrowed your foreign license plated car. Then she is to pay the tax on your car. So whoever is caught is to cough up the tax. That is what we refer to as rigid.
Driving a non-Dutch license plated car is therefore a problem.
Why a non-Dutch license plated car?
Why would an employer do that, is the first question. The employer can be situated abroad and you work for them in the Netherlands. A foreign employer cannot lease with a Dutch lease company a car when the company is not registered in the Netherlands. A foreign company cannot loan from a Dutch bank when not registered in the Netherlands. In their home country they can, so the choice is easily made.
What if your employer decides to issue you a company car with foreign plates?
Then you need a permit from the Dutch tax office to drive this non-Dutch license plated car. There are two permits. In order to know which permit you need to apply for, we need to know more about who you are.
Who are you?
If you are an employee of the foreign company that is part of the board that determines who drives which type of plated car, then you are a special employee. An employee that has influence on the license plate of the company car. The tax office will issue a permit to drive the non-Dutch license plated car in the Netherlands. The condition is that you can only drive on the road that leads direct to the office of the company abroad. This car cannot be used for any other purse than this distance.
If you are a regular employee that is confronted with a foreign license plated car and you cannot plead for that or argue this fact, then you receive another permit from the Dutch tax office. This permit allows you to drive where ever you like in the Netherlands. The condition is that you and only you drive this car.
What value to add to your income for private use of the company car?
In the Netherlands we understand that the company car is also used to go to the beach, purchase grocery’s or go on holiday. Anything you get from your employer is taxed salary and this personal use of the company car is referred to as a remuneration in kind. The value of the amount processed in your salary specification depends on the new Dutch purchase price of the car including VAT.
What happens with the foreign license plated car in this respect? The same applies, a percentage of the Dutch equivalent of the new purchase price including VAT of that car is taken into account. Not the actual purchase price paid for in that other country.
We think tax-is-exciting but we also think that a Dutch car is heavily taxed. The heavy tax is part of the policy of the Dutch Government to reduce the usage of the automobile. In other EU countries the taxation can even be higher like in Scandinavia. But in other EU countries the tax can be much lower on cars or not existing like Germany and Luxemburg. To prevent shopping around, rigid rules are in place.
Sorry for the dashes in the middle of the word tax-is-exciting. Apparently Google has a dirty mind and sees only a three letter word that we refer to when we practice to reproduce ourselves. Anything related to that word is spam, hence this devout solution.