Company use of a private car

Do you have a private car or company car?

It is important to know whether you have a private car or a company car. This is because different rules apply to your income tax and VAT.

For income tax, you check whether your car is part of your private assets or not. You do the same for VAT. These answers may be different.

A private car and income tax

Do you want to know whether your car is a private car or a company car for income tax purposes? Before that, look at how much you drive privately and how much for business. It is up to you how you calculate these business and private kilometres.

Do you drive your car privately more than 90% of the time? Then for income tax purposes, your car is included in your private assets.

Do you drive your car for business use more than 90% of the time? Then you have a company car.

You also have a company car if:

• you drive more business kilometres than private kilometres, and
• you do not drive more than 500 kilometres per year for private use

In other cases, you decide if your car is a private asset or a business asset for income tax purposes.

Allowance for business kilometres

Do you choose to keep your car as a private asset for income tax purposes (in Dutch)? Then you do not deduct any car expenses from your profit. However, you can deduct the company use of the car at €0.23 per kilometre (2024). Commuting is regarded as business travel for income tax purposes.

A private car and VAT

You choose whether your car belongs to your private assets for VAT or not. Is the car not part of the business assets? Then the car is private in any case.

VAT on car use and maintenance deductible

You may deduct VAT on the maintenance and use of the car for your business kilometres. However, it must be turnover that has been taxed with VAT.

You cannot deduct VAT on:

• business kilometres for VAT-exempted turnover
• private use (including commuting)

Also, keep in mind that you will still have to pay VAT at the end of the year for the private use of your car. For VAT purposes, commuting is considered private. Therefore, keep records of your kilometres travelled.

Keep track of your kilometres

You can calculate your business use for VAT in 3 ways:

1. Track your trips in a complete trip registration. For example, RitRegistratieSystemen (in Dutch). That way you will know exactly what the difference is between business and private use.
2. Do you not keep a complete trip registration? You can also show the business and private kilometres using other data from your records. Such as what business purposes the car is used for. And the function of the person using the car.
3. Do you keep no records of business use? Then you may deduct all VAT on maintenance and use. And once a year, adjust the deducted VAT for your private use. You do this in the final VAT return of the year. You use a fixed percentage: 1.5% of the car’s catalogue value, including VAT, and bpm (private motor vehicle and motorcycle tax). Enter this in section 1d Privégebruik ('Private use'), in the right column. Enter '0' in the left column.