The company car and tax, the automobile is the most advised aspect since the vehicle. No matter what you do, a car costs money. What can you do?
The company car and tax – minivan
The company car is a car to be used in the company. Obvious is the transporter type of vehicles you see plenty of on the road. The Plumber, carpenter, painter use the car. It is full of equipment and often not suitable to make private use of these cars.
Regardless, the minivan not being suitable for private use needs to be made clear for the Dutch tax office, otherwise the regular percentage of private use is added to the income of the person driving the minivan. The company can:
- Demand a KM administration showing that less than 500KM is driven privately per year
- Agree on an instruction that no private use can be made of the vehicle
- The minivan is parked behind a closed gate at the end of the work day
- The vehicle is used by multiple persons
- The vehicle is not suitable for private use (one seat, extremely dirty)
The company car and tax – electric Porsche
Among our clients there are many enthusiasts about the electric Porsche. Driving an awesome Porsche without complaining neighbors of the sound, only about them not being able to afford one as well.
The rules are identical to the minivan, except of course the one seat and dirtiness. The 500km administration never works. We have seen too many court cases where the administration was not done correctly and the driver retro actively was charged with 5 years of private use for the company car.
A full electric car from 2020 – 8% added to your income
Some of our colleagues drive a full electric car and only 8% of the new catalogue value. That is suddenly fun. But this arrangement is only for a 5 year period, hence soon over. And in 2021 the percentage increased to 12% plus the catalogue value for which this is available has been reduced. And so on every year.
The moment such arrangements are introduced from a green environmental point of view, so it is said, and these arrangement become a success, it is instantly changed to less or no fun. Being green may not be a joy, I think is the adagium with the tax office. Why not? I am sure many more electric Porsches would have been on the road if we had 8% added to the income with no limit.
15 year old car
If the current rules are no fun, maybe old rules can still be fun. The rule of the 15 year old car where the percentage added to the income amounts to 35% over the day value of the car.
15 years ago the build quality of a car was already good. If you can find for instance a nice BMW for about EUR 10.000 that has an awesome six cylinder turbo engine that does 14 KM to a liter petrol, it is not bad. EUR 292 is added to the income. The only terrifying aspect of a 15 year old car is the maintenance.
Some think to out clever this rule by having fully rebuild the Jaguar or Landrover. The day value is then also up to date, where suddenly 35% over EUR 150.000 is a lot.
If you are a petrol head, you know a bit about cars and you do not mind some maintenance while driving the car you could not afford 15 years ago, this is an alternative.
Tax is Exciting
We think tax is exciting. I think cars are exciting too. In a perfect world our Government would have had balls. With those balls any full electric car with no limits would have had 8% added to the income. Then a much more quick change in green cars would show.
Unfortunately our Government is also an accountant hence the moment a rule becomes fun, it is abandoned. Not the 15 year old 35% company car model. Maybe check that out.