Sander.Michael@borgentax.nl

What does the final levy for fossil company cars entail?

The new employers’ final levy will amount to 12% of the value of the fossil company cars per year where:

• The employer provides employees with a fossil fuel company car and employees are entitled to use the company car for private purposes.
• The 12% rate is applicable on the list price (cataloguswaarde) for cars that are up to and including 25 years old
• The 12% rate is applicable on the market value for cars that are older than 25 years
• Different to the taxable benefit for the private use of the company car by employee, commuting (woon-werk verkeer) is also considered as private use for the employers’ fossil final levy.
• Fully electric cars with zero emissions;
• Fossil fuel cars that are exclusively made available for business purposes

Exemptions to the fossil final levy

• Fully electric cars with zero emissions;
• Fossil fuel cars that are exclusively made available for business purposes

When should employers submit and pay the final levy?

The employers final levy should be reported and paid, similar to the Work Related Cost scheme final levy, in the second wage tax period of the following calendar year. The 2027 final levy should be included in the second period of 2028. Please note that the final levy cannot be recovered from the employee that drives the fossil fuel company car.

Is there transitional law that can be applied?

Yes, the final levy is not applicable if an employer provided the fossil company car to its employees before 1 January 2027. For these company cars, the final levy applies as of 17 September 2030.

Take away

The new final levy legislation will result in additional taxation costs for employers when providing fossil company cars to employees in 2027. Therefore, we recommend employers assessing the company cars that are provided to employees and the implications of the new legislation and possibly anticipate on it.

Should you require further advice or assistance regarding the new legislation or the adjustments of your company car policy, please let us know and we are happy to assist.