Additional tax liability when leasing a car

Addition tax is a term you often come across when thinking about leasing a car, especially if it is used for both business and private use. It has to do with the tax you have to pay on the private use of a business car. It is an important aspect to take into account when choosing a lease car, as the addition rates can vary from year to year.

When does addition tax apply?

Addition tax applies if you want to lease a car through your employer or your own company and you also use it privately. This is seen as a form of wage in kind, as it gives you a private benefit. The amount you have to pay is calculated as a percentage of the catalogue value of the car, including accessories and VAT.

Car addition rates in the Netherlands

The addition tax rates in the Netherlands are divided into several categories, depending on the car's CO2 emissions. In recent years, these rates have changed significantly to encourage environmentally friendly driving. Here are the main additional taxable benefit rates:

●       Electric cars: Electric cars often have the lowest additional tax rate. In 2024, this rate is 16%.

●       Other cars: Cars that are not fully electric are subject to a higher additional tax rate. In 2024, this rate will be 22%.

Please note that these rates may change annually, so it is essential to always consult the current addition rules when choosing a lease car.

How long does the addition rate apply?

The addition rate is usually set for a period of 60 months (5 years) after registration of the vehicle. After this period, the percentage is recalculated based on the addition tax rules which are relevant at that time.

What happens to the addition tax rate after 5 years?

After a period of 5 years, the addition tax rate is recalculated based on the addition tax rate rules relevant at that time. This means that the percentage of the addition tax rate may change, depending on legislation and rates at that time.

It is important to note that the addition tax rate is often determined at the time of first registration of the vehicle. For the first 60 months after registration, the originally determined rate applies. After those 60 months, the percentage is reviewed and may change based on new rules and rates.

This is why it could be wise to take possible changes into account in the addition tax rate when choosing a lease car, especially if you plan to use the car for more than five years. It is also advisable to regularly check the current addition tax rules to stay well informed on the costs of your leased car.

Addition and leased cars

If you are considering a leased car, it is important to consider the addition tax rate. The rate can affect the total cost of your lease car, especially if you also use it privately. It is advisable to consult an advisor at Lease.car to discuss which car best suits your needs and budget.

At Lease.car, we understand the importance of addition tax rates when leasing a car. Our expert advisers can help you choose a lease car that suits your needs and tax situation. Feel free to contact us for personal advice and more information on our leasing options. Continue reading on our website for more information on car leasing and the latest addition tax rules for lease cars. We are here to help you make the right choice when leasing your next car.