The Tax Office It has been announced that the rule for employees with more than one company car will not be amended until 1 January 2022. This means that the “trick” will still work this year.
More than one car
This tactic makes use of the rules that apply when an employee is provided with more than one company car. This often applies to the director and majority shareholder (DGA).
As the employee can only drive one car, the additional tax liability does not need to be included in their salary for both cars (please note: this is required if the employee’s household includes more than two people with a driving licence).
In the Payroll Tax Handbook, the Tax and Customs Administration confirms that the additional tax liability will then apply to the car with the highest list price. With effect from 1 January 2022, this will be the car with the highest additional tax liability.
The trick
The trick makes use of the rule that the additional tax liability for a ‘youngtimer’ is not calculated on the basis of the car’s list price, but on the basis of its market value. A ‘youngtimer’ is a car that is more than 15 years old.
If an employee is provided with a ‘youngtimer’ whose list price is higher than that of the new car also provided, the additional tax liability must be calculated on the basis of the ‘youngtimer’ (and not the new car). However, this additional tax liability is not calculated on the basis of the list price, but on the much lower market value.
The additional tax liability of 35% based on the economic value of the youngtimer is considerably lower than the 22% based on the new car’s list price.