At Court of Appeal of Den Bosch Earlier this year, an attempt to avoid the additional tax liability for the private use of a delivery van came to nothing. The ruling, published last week, shows that once the tax authorities have proven that a (delivery) van has been made available, in most cases only a comprehensive mileage log offers a way out.
Make available
The burden of proof rests entirely with the Tax and Customs Administration in the first instance. It must prove that the (delivery) vehicle was made available to one (or more) employee(s) for private use as well.
In the case heard by the Court, the Tax and Customs Administration has met that burden of proof by producing a statement from the (former) manager of the company. He states that he was in charge of the car keys, but that the cars were not available to staff outside working hours. If the cars were not in the company car park outside working hours, there was always a reason for this, for example because the member of staff who had taken the car home had to deliver an order first thing the following morning.
The Court concludes that the van was made available to the employees, as only the manager was in charge of the keys. There was no written provision stipulating that the employees were not permitted to use the van for private purposes. Nor did the employer monitor any private use. In this regard, the Court also refers to a ruling of the Supreme Court of 29 May 2015, in which it was ruled that there is no provision of a vehicle where the employee(s) merely drive the car in order to carry out specific instructions from the employer to transport persons or goods in the employer’s interest.
Counter evidence
Now that it has been established that the (delivery) van was made available to employees (in part) for private use, the ball is in the employer’s court. The employer may provide evidence to the contrary, demonstrating that no more than 500 kilometres were driven for private purposes with the (delivery) van in a calendar year. The employer has made an attempt to do so. However, the Court considers the mileage account, which is based on estimates, to be wholly insufficient. Nor does the Court accept that the estimate made for 2012 could be extrapolated to the years 2013 and 2014.
Additional tax assessment
The Tax and Customs Administration does not need to prove which specific employee drove the (delivery) van for private purposes. It is sufficient that it is established that the (delivery) van could also be used for private purposes by one (or more) employee(s).
The additional tax assessment is then imposed on the employer. After all, the payroll tax legislation stipulates that if it subsequently transpires that too little tax has been paid, this tax is recovered in the form of a final levy. Payroll tax in the form of a final levy is payable by the employer, unless the employer actually recovers the tax from the employee(s).
In the case before the Court of Appeal in Den Bosch, the list price of the delivery van is €36,133. The additional tax liability for 2014 is therefore 25% * €36,133 = €9,033. The Tax and Customs Administration calculated the payroll tax on the basis of the grossed-up final levy rate of 72.4%, so that the tax for that year amounts to: €6,539 (additional tax was also levied for the years 2011 to 2013 inclusive).
The tax due is increased by interest. It is not clear why no penalties were imposed in this case. The grossed-up final levy rate applied will have been determined on the basis of the employees’ annual salaries. After all, the highest gross final levy rate in 2014 was 108.3%.