Share with your friends

Netherlands: Private use of company cars, clarified VAT treatment

Netherlands: Private use of company cars, clarified VAT

In the final Dutch value added tax (VAT) return of 2019, a VAT correction may be required concerning the VAT deduction exclusion decree and the private use of company cars.


Related content

The decree precludes the recovery of VAT (also referred to as input VAT) on promotional gifts and staff benefits if provided free of charge or below cost by the business. It is irrelevant whether the business had a commercial reason for providing the gifts and staff benefits (for example, if provided for client management, staff commitment, etc.).

The rationale for not allowing input VAT to be recovered is based on the fact that these costs, while business-related, are consumption-oriented, and VAT is a tax specifically designed to tax consumption.

A threshold of €227 per recipient applies. It is not necessary to make an adjustment if the total purchase and development costs (the cost price) of the benefits are less than €227 (excluding VAT) per annum per recipient. This is a final threshold; if the threshold is exceeded, the input VAT on provisions within the threshold amount are non-recoverable.

Read a January 2020 report prepared by the KPMG member firm in the Netherlands

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal