If your car belongs to the assets of your company, you have the choice between whether or not to use the car privately. The tax liability that you have if you use the company car privately is a hefty one, but can sometimes be cheaper than using two cars or a private car for your company and declaring the miles to your company. In principle, the maxim applies that:
- you can better buy a new car for your company and take the addition for granted
- buy a used car cheaper privately and declare the mileage
- Less than 500 kilometers private
If you do not drive more than 500 kilometers privately in your company car, the tax authorities will see your car as a business asset and you will not have any addition. You do need to keep an extensive kilometer registration for this. As of 1 January 2012, owners of a delivery van can declare that they will only drive the business car. Because of this statement , you no longer need to keep track of a trip registration.
Requirements for kilometer registration
Without correct kilometer registration, there may be an addition. The Tax Authorities want a comprehensive kilometer registration in an overview. In it is the brand, type, license plate, period use with indicated per ride:
- start and end odometer
- departure and arrival address (both back and forth)
- private or business trip
- at a mixed ride both private and business part
- You can track these kilometers manually or have this automatically done with
- a GPS kilometer registration system .
Addition for private use of cars
If you use your company car privately, you have a private advantage. Therefore, you will have to add an addition of the value of the car to your tax return and pay tax on it. The amount of the add-on may never exceed the total car costs per year.
There are 2 percentages for the private car
surcharge per 2018 (2017) Addition dependent on CO2 emissions (in gr / km)
Cars older than 15 years
A different scheme applies to cars that are older than 15 years: the actual value that applies in economic transactions (daily value) is the starting point for the additional tax instead of the new value. For the calculation, the percentage is 35% of the daily value.
VAT remittance on private use company car
In addition to the addition for the income, VAT must also be charged for the private use of the car. You pay VAT on the actual private use. To determine this private use, you must keep a correct mileage administration. Using this mileage administration you can then calculate the ratio between business use and private use. The VAT that you deduct for the costs of the car must be separated in a section for private kilometers driven and indicated on the VAT return in the last quarter of that year.
From 1 July 2011, the VAT calculation also includes the kilometers for commuting as private kilometers.
Fixed percentage possible
As above is a difficult calculation and a lot of administration, there is also the possibility to opt for a fixed percentage of 2.7% on the catalog value including BPM and VAT. You must indicate this in your VAT declaration for the last quarter of the year. This 2.7% is a VAT correction. This allows you to increase these costs and thus deduct them from the operating result. If you have bought a car via the “margin” scheme (you could not set off VAT on purchase) you must pay 1.5% of the catalog value of the car as a VAT correction.