In the event an employer provides the employee with a company car, this is regarded a remuneration in kind. Hence wage tax is due over the remuneration. The tax base can be 7%, 14%, 25% over the catalogue value or 35% over the current day value if the vehicle exceeds the age of 15 years old.
The alternative is to proof that you have not used the car for private use, hence it cannot be regarded a remuneration, so no wage tax should be withheld. If the company car is used for less than 500 km per year, you as employee can make a statement to the tax office that no wage tax should be withheld.
Company car and KM administration
A result of this statement is that the tax office would like to check that you actually have driven less than 500 km per year for private use. In the old days you could make such a KM administration easily. Then you had to match your speeding tickets with the administration. This was followed by camera’s the tax office places at the border, IKEA, amusement parks etc to match license plate number with the company cars stating not to have driven for private use.
The latest step is the parking behavior. Parking is done based on the license plate number and you have easy apps like parkmobile, SMS parking etc so you can activate and deactivate the parking . How easy is it for the tax office to use this data as well to challenge your KM administration. The companies providing the parking app facilities appealed in court against providing this data to the tax office and this was lost.
The appeal was based on privacy rules, not so much to prevent paying wage tax over the use of the company car, but for matters such as visiting persons the car user do not want other institutes to learn about. The outcome was that you then either need to use the bike, or park in a parking garage.
Should you have the opinion that you drive less than 500 km per year for private use, then do apply for the exemption of wage tax, but at the same time, use a professional device installed in the car, which can be read into a computer, to administrate the KM. This in order to prevent the tax office successfully challenging your KM administration. If you cannot meet this standard, the employer is to withheld the wage tax.
