VAT correction or VAT fixed amount for the private use of your business car (or your ‘fiscal old-timer’)

If you drive your business car for private purposes in the Netherlands, you may only deduct the VAT on the business kilometers driven. The commute from home to the office is counted as business kilometers. This item is often forgotten by entrepreneurs, but it can still be a significant cost item.

However, if you mainly drive your car for business, it is cheaper to settle the VAT on the basis of the kilometers actually driven. You are then obliged to keep a kilometer registration in order to be able to show how much business kilometers have been driven. The VAT adjustment for private use is made in the last quarter of the VAT return of that year.

Do you drive a relatively large number of private kilometers and/or do you not feel like keeping track of your kilometer registration (!) and do you still want to deduct all VAT from the car costs? Then there is no other option than to pay the VAT fixed amount. In that case, the Tax and Customs Administration calculates a fixed percentage on the catalogue/new value of the car:

– 1.5% for a margin car (second hand without VAT) and

– 2.7% for a car purchased with VAT

You have been informed!

Hein Dudink/RDW-Lawyer