The Netherlands imposes a system of PIT addition for the private use of company cars by employees (the so-called bijtelling).
If an employer makes a company car available to their employees, a corresponding addition to the employee’s income tax base is due in certain cases. In other words, the use of a company car by an employee is treated by the Dutch Tax Office as a benefit in kind.
The addition can occur in the following cases:
1) The employee drove the company car(s) more than 500 kilometres in a calendar year for private purposes;
2) The employer is unable to prove that the employee drove the company car(s) in a calendar year for at most 500 kilometres for private purposes;
3) The employer voluntarily chooses to apply the addition.
In our experience, in the event of a tax inspection, the Dutch Tax Office meticulously verifies the facts of a given case in order to determine the number of kilometres driven and the manner in which company cars are used by employees. A distinction is made between business and private use of the car. The classification of private (personal) use or business (work-related) use is vague and often leads to disputes.
Our law firm has extensive experience covering the issue of the use of company cars by employees. In this respect, we conduct an analysis of legal risks, prepare compliance strategy and can also handle communications with the Dutch Tax Office on your behalf.
If you are interested in the above matters, do not hesitate to contact us.