Amsterdam Court of Appeal has confirmed that, when determining whether a car has been used to travel more than 500 kilometres for private purposes, the decisive factor is the total number of kilometres travelled for private purposes by all these cars in a calendar year.
500 kilometres for private use in the calendar year
The facts of this case are fairly straightforward. In 2013, an employee had two cars at his disposal:
- from 1 January to 5 November inclusive, a car (diesel) with a list price of €33,885, for which an additional tax liability of 25% applies;
- from 5 November to 31 December inclusive, an electric car with a list price of €51,865, to which 0% must be added.
The driver kept a log of journeys for both cars. The first car was driven 376 kilometres for private purposes and the second 242. The total number of private kilometres travelled in 2013 is therefore 618. This exceeds 500, which is grounds for the Tax and Customs Administration to issue a supplementary assessment for payroll tax. The Tax and Customs Administration calculates the additional tax liability as follows: 308/365 * 25% * €33,885 = €7,148. The payroll tax due amounts to: 52% * €7,148 = € 3.717. The Tax and Customs Administration did not add a penalty to the tax bill.
The Amsterdam Court of Appeal has confirmed that, in the case of cars made available in succession, the decisive factor is the total number of kilometres driven by all the cars during the calendar year. The Court could hardly have ruled otherwise, given that the Supreme Court had already decided this back in 1997.
Private mileage calculated on a pro rata basis
The Court does not consider it relevant that the private use of the first car amounts to less than 500 kilometres on a pro rata basis. 376 kilometres of private use over 308 days, extrapolated to a full calendar year, results in just: (365/308) * 376 = 445 kilometres for private use.
This pro rata allocation of kilometres does work when a car is only available for part of the year. But even then, it can work either way. If, in the case described above, the employee had only had the electric car at their disposal, the number of private kilometres used to determine the additional tax liability would have been calculated as follows: (365/57) * 242 = 1,027. That is well over 500, so an additional amount would have had to be added. However, given the 0% additional tax liability rate associated with the electric car, this is of course irrelevant.