Who pays the payroll tax when it is not clear which employees have driven the company cars? The answer to this question is simple: the employer.
Final tax
In this case, the employer did not take into account the additional tax liability for the private use of the company car when deducting income tax from the employees’ wages. The Tax and Customs Administration subsequently recovers this tax from the employer. In doing so, the final levy system is applied. This means that the employer is liable for the income tax still due. Income tax is calculated on the basis of the grossed-up rate, which for 2019 amounts to a maximum of 107.2%.
Proof
The burden of proof regarding company cars rests initially with the Tax and Customs Administration. It must demonstrate that cars are made available to employees partly for private use. If the Tax and Customs Administration has succeeded in meeting this burden of proof, the employer may prove that the cars were used for fewer than 500 kilometres of private travel in a calendar year.
Take the car home
A case was heard at The Hague District Court case of a construction firm that allows its employees to take the company’s delivery vans home with them after work. According to the court, the employee then exercises control over the vehicle for a shorter or longer period. The Tax and Customs Administration has thus sufficiently demonstrated that the vehicles were made available to the employees.
After all, the employees in question are able to use the vehicles before and after working hours. Naturally, there is no comprehensive mileage record showing that fewer than 500 kilometres were driven for private purposes using the vans.
There is no evidence that the employer imposed a ban on the private use of the vehicles. Nor is there any evidence that any checks or supervision were carried out regarding the (private) use of the vehicles. The contractor attempted to demonstrate, by means of photographs, that the vans were suitable solely for the transport of goods (as they were being used to handle contaminated soil). However, the Court did not consider this to have been sufficiently proven.
Since the information provided by the contractor does not allow for identification, at an individual level, of which car was made available to which employee, the additional payroll tax is rightly levied on the contractor. In the same proceedings, it was concluded that the additional VAT assessments relating to the VAT adjustment for the private use of the cars were also correctly imposed.