According to a press release on the Ministry of Finance’s website, there is substantial fraud surrounding the declaration of the private use of company cars. The Dutch Revenue will audit this more closely.
Employees who drive more than 500 kilometers annually for private purposes are faced with an addition to the taxable income for the private use of the company car, referred to as the car cost fixed amount. The commuting kilometers will be considered as business-related kilometers for these purposes. The addition to the taxable income is at least 14%, 20%, or 25% of the car’s listed value, depending on the car’s CO2 emission. In order to avoid the addition to the taxable income for the private use of a company car, an employee must be able to demonstrate that he or she drives no more than 500 kilometers annually for private purposes. Employees can also request a “No private use of the company car declaration” from the Dutch Revenue. The employer will then discount the addition to the taxable income for the private use of the company car for payroll tax and social security contribution purposes.
Fraud
According to the Ministry of Finance there is, however, substantial fraud surrounding the declaration of the private use of company cars. According to a press release on the Ministry’s website, the Dutch Revenue has established, by using random checks and audits, that at least 40,000 car drivers have wrongfully stated that they do not make private use of their company cars. A total of 250,000 of the 2 million people with a company car have submitted such a declaration to the Dutch Revenue.
Tighter checks
In order to inform drivers of lease cars that they can amend their declarations themselves and submit them to the Dutch Revenue, all 250,000 declaration holders will receive a letter to their home address shortly. They can declare that they do indeed make no private use of the company car, or indicate that the circumstances have changed. The Dutch Revenue will be auditing more thoroughly. The consequences of exceeding the 500 kilometers could involve substantial additional assessments and possibly penalties.