What is additional tax?

Compensation 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 leased 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.

Compensation rates in the Netherlands

The addition rates in the Netherlands are divided into several categories, depending on the CO2 emissions of the car. 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 2023, this rate is 16%.

●      Other cars: Cars that are not fully electric are subject to a higher additional tax rate. In 2023, this rate will be 22%.

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