• Taxable Benefit for Company Car per Calendar Year (II)
  • May 5, 2011 | Author: Eugene Weultjes
  • Law Firm: Greenberg Traurig, LLP - Amsterdam Office
  • In the November 2010 issue, we reported on a case that was brought before the Court in Leeuwarden regarding the application of the 500 kilometer test. The case involved an employee that had disposal, consecutively, to more than one company car. The judge ruled in this case that the 500 private kilometers must be counted per calendar year and not for the duration a car has been at the employee’s disposal.

    In a more recent case, the Court of Appeal in Den Bosch ruled that per calendar year the number of private kilometers should be counted in order to determine whether the 500 kilometer limit has been surpassed. In the case before the Court of Appeal in Den Bosch, an employee had, during one calendar year, the consecutive disposal of two company cars. The first car was not used by the employee for private purposes, and for that he had received a ‘statement of no private use of company car’ from the tax authorities. This statement was later cancelled by the tax authorities when it became clear that the second was or would be used for more than 500 private kilometers. As the second car was to be used for more than 500 private kilometers, the employer took the taxable inclusion into account as of the date the car was put at the employee’s disposal. Since the 500 kilometer limit must be calculated on a calendar basis, the tax inspector imposed an additional tax assessment over the period the employee had the first car at his disposal. Regrettably, none of the employee’s arguments were accepted and, in this case, the tax inspector was the successful party.

    Therefore, if in one year an employer puts a car or cars, consecutively, at an employee’s disposal and the car(s) may also be used for private purposes, then a taxable inclusion should be taken into account if the car or cars are being used, in total, for more that 500 private kilometers per calendar year.