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What are the rules for tax addition when I have a company car?

If you drive a company car privately as well, your employer must add an amount to your wage. This is because you benefit from the private use. The amount is the so-called addition. The height of the addition depends on the catalogue price and the CO2 emissions of the car you drive. Your employer calculates wage tax/national insurance contributions on this addition. This means your net wage is reduced, unless you can demonstrate that you have not driven more than 500 kilometres privately per year.


Calculating addition

The benefit of private use is a percentage of the catalogue price of the car. In 2015, that benefit is:

Addition in 2015

CO2 emissions in grams per kilometre Addition percentage
0 4%
1 to 50 7%
51 to 82 14%
83 to 110 20%
111 and more 25%

If you drive a fuel-efficient car, the lower percentages apply, depending on the CO2 emissions of the car. The applicable addition percentage also depends on the moment when the car was first registered. The Tax Authority annually provides the addition percentages for environmentally friendly cars. The rates and associated CO2 limits for 2015 are found in the Wijzigingen in de belastingheffing per 1 januari 2015 overview.


Addition in 2016

The government tightens up the addition for private use of company cars as of 2016.

Addition percentages per 1-1-2016 for new cars

CO2 emissions in grams per kilometre Addition percentage
0 4%
1 to 50 15%
51 to 106 21%
107 and more 25%

The addition percentages only apply to cars that were first registered in 2016. The addition for existing lease contracts remains unchanged for a maximum of 60 months from 1 January 2015.


Addition in 2017 & 2018

From 2017, there are 2 addition rates: 4% and 22%.
The addition depends on the CO2 emissions of the car. The emission limits are re-determined every year. From 2017, only cars without any CO2 emissions fall under the 4% rate.

The below table applies to cars with a first registration date of 2017 or later.

CO2 emissions in grams per kilometre Addition percentage
0 4%
more than 0 22%

In 2017, the normal percentage has been dropped from 25 to 22.
Was your car first registered before 2017, and did the 25% addition rate apply to that car? Then the 25% addition rate will continue to apply. Did the car fall under a low addition percentage in the past? And does the high addition apply as of 2017 due to the expiry of the 60-month period?
Then, too, the percentage will be 25 rather than 22.


Addition in 2019

In 2019, the percentages are the same as in 2017 and 2018 with the difference that a tax cap is set. This means that the low addition percentage applies up to the list price of € 50,000. If the list price is higher than € 50,000, 22% applies to the amount above that.

CO2 emissions in grams per kilometre Addition percentage
0 (full electric) 4% (basis up to € 50,000
0 (full electric) 22% (for part of basis above € 50,000
more than 0 22%

Addition from 2020

From 2020, the addition percentages for fully electric cars will increase every year until by 2026 all cars have the same percentage. In 2020 it is 8%, 2021 12%, 2022 to 2024 16% and 2025 17%. In addition, these cars have a full exemption in the roadtax and bpm. The addition cap will goes down to € 45,000 in 2020 and from 2021 to 2026 it will be € 40,000.


Car from your employer

Personal contribution for private use
Did you and your employer agree to a personal contribution for the private use? Then this contribution is deducted from the addition. You then only pay tax based on this reduced addition.

No addition with little private use
Do you drive less than 500 kilometres privately per calendar year? And can you demonstrate this? Then your employer does not need to add anything to your wage. You can request a form for this from the Tax Authority, by downloading it via the Belastingdienst website or calling the Belastingtelefoon.

No addition for delivery van for business use
Do you have a delivery van from your employer? And do you only use it for work and not privately? Then you can submit a statement for this. Your employer then does not have to add addition to your wage. You can also request the form via the Belastingtelefoon.

Passing on changes to the Tax Authority
Is your situation going to change? Communicate this to the Tax Authority as soon as possible. For instance: you have a 'statement of no private use of company car'. But now you are going to drive your company car privately for more than 500 kilometres per year. You then indicate this to the Tax Authority as well as your employer.

Note!
All kilometres you do not drive for work are private kilometres. All commuting kilometres are business kilometres.