If a car is made available to a business owner or employee (in part) for private use, an additional tax liability must be added to their profit or salary. The mere possibility of private use is sufficient for this purpose.
Addition
In 2017, this additional tax liability amounts to: 22% of the car’s catalogue value (for a fully electric car: 4% (up to a catalogue value of €50,000). For cars first registered before 2017, different additional tax rates apply under a transitional arrangement (see below for a link to our article on this transitional arrangement).
The employee’s personal contribution for the private use of the car may be deducted from the additional tax liability.
The additional tax liability does not apply if fewer than 501 kilometres have been driven for private purposes in a calendar year using company cars. This must be demonstrated by means of a comprehensive mileage log.
More flexible arrangements
The additional tax liability for the private use of a van is the same as that for a passenger car. However, a number of more flexible rules apply to vans. For example, the following are not subject to the additional tax liability:
- for the delivery van which, by its nature or configuration (almost) exclusively suitable for transport of goods;
- at used alternately on an ongoing basis delivery vans (subject to a flat-rate tax of €300 per year);
- if the employer is a ban on private use imposes (with monitoring and enforcement by the employer);
- when a statement for business purposes only a claim for the use of a delivery van is submitted (only if there are 0 private kilometres and this is supported by evidence in the employer’s records).
A simplified journey log may be used if:
- personal use is not permitted during working hours and lunch breaks, and;
- the information regarding business trips is available in the employer’s records.
Delivery van
So what is a delivery van? A vehicle that is not designed for carrying passengers and which has a load floor. The vehicle must, of course, be eligible to be driven with a Category B driving licence. If that is not the case, then we are, after all, dealing with a lorry.
(Virtually) exclusively suitable for the transport of goods
The Ministry of Finance has recently published its internal guidelines on this matter. The following types delivery vans (excluding double-cab models) are deemed to be (virtually) exclusively suitable for the carriage of goods:
- the front passenger seat has been removed and the mounting points have been ground away or welded shut;
- the floor area of the load compartment is 90% or more of the total floor area;
- The van is so large that it does not fit in a multi-storey car park; it is fitted with shelving, and the passenger seat is designed to facilitate loading and unloading the van.
In addition, there is the category of delivery vans that are so dirty and dusty that, despite the presence of a passenger seat, private use is not a obvious option. In such cases, too, the additional tax liability may be waived. According to the Tax and Customs Administration, this must involve severe soiling or a foul odour that cannot be easily removed by washing and vacuuming. In cases of doubt, the use of the front passenger seat must be assessed.