Tax Update Automotive Sector (Budget Day 2023)

In 2023, the maximum tax-free travel allowance is € 21 cents per kilometer. The Tax Plan 2024 proposes to increase this travel allowance to € 23 cents per kilometer as per 2024. As such, this proposed change is higher than previously adopted with the Tax Plan 2023 (the Tax Plan 2023 included an increase to € 22 cents per kilometer).

If a company car is elected to be used privately as well, an addition (in Dutch: bijtelling) to the salary for wage tax purposes applies. Zero-emission cars enjoy a reduced wage tax addition. It has been previously announced that the reduction for BEVs is phased out, so that the addition rate will be the same for all cars from 2026 onwards. In 2023, the wage tax addition rate for BEVs will be 16% on the list price up to the threshold amount of €30,000. Above the threshold amount, the default rate of 22% will apply. For 2025, the addition rate for electric cars will be increased to 17% up to the threshold amount, after which in 2026 the default addition rate will apply to all cars. Interestingly, on FCEV (hydrogen) and solar cell cars, the reduced wage tax addition rate can be applied to the entire list price, i.e., without the threshold.

The Private Motor Vehicle and Motorcycle Tax, or BPM, is a purchase and import tax upon registration of a vehicle in the Netherlands. The amount of the BPM (levied for passenger cars) consists of two components: (i) the so-called "fixed base"; and (ii) a variable part based on the vehicle’s CO2 emissions. To promote the purchase of (second-hand) BEVs, the Tax Plan 2024 proposes to increase the fixed base of the BPM to € 600 as per 2025 (currently: € 400).

The registration of delivery vans, regardless of emissions or fuel, is exempt from BPM if the taxpayer qualifies as an entrepreneur for VAT purposes. With the Tax Plan 2023, it was adopted that this BPM exemption will be abolished as per the beginning of 2025. Also, from this date, the BPM for the delivery vans will no longer be calculated on the list price, but on its CO2 emissions as has been the case for passenger cars. As a result, emission-free delivery vans will effectively continue to be tax-free. The Tax Plan 2024 does not contain any amendments in respect of this already adopted legislation.  

Motor vehicles and motorcycle with a Dutch registration number are automatically subject to the Motor Vehicle Tax (MRB) after their registration in the Netherlands. For vehicles with foreign registration plates, owners have to register for the collection of MRB on own behalf. To combat fraud, the additional tax assessment period for foreign-registered vehicles was previously extended to five years. Investigation has shown that this extension not only affects obvious cases of fraud but also non-fraud cases. Therefore, it is proposed to set the additional tax assessment period to a maximum of 12 months.

The 2024 Tax Plan contains amendments to specific benefits and exemptions currently applicable for the MRB. In particular, the amendments aim to encourage owners of vehicles, currently qualify for an exemption or benefit, to choose more environmental-friendly alternatives in future. This goal fits within the government's broader climate and environmental objectives.

The Tax Plan 2024 proposes to:

• Abolish the MRB exemption for buses used for public transport and powered by gas (petroleum gas or natural gas). 1 January 2030 is proposed as effective date for abolishing this exemption.
• Abolish the lower fuel surcharge for private passenger cars and delivery vans with specific autogas systems (CNG, LNG or LPG). Passenger cars and delivery vans with specific autogas installations are subject to a fuel surcharge (being a surcharge on the regular MRB due). It has been proposed to increase this fuel surcharge from 2026. This amendment will effectively increase the MRB for passenger cars and delivery vans with autogas installations.
• Increase the lower MRB-rate for campers (passenger cars with accommodation facilities). Currently, only a quarter of the regular MRB-rate is due for private campers. Half of the regular MRB-rate is due for campers rented out on a commercial basis. The Tax Plan 2024 proposes to increase the effective MRB-rate applicable for private campers to a half of the regular MRB-rate and to treat campers rented out commercially on the same basis as private campers. This increase of the effective MRB-rate applicable for private campers is envisaged to take effect as per 2026.
• Amend the favourable regulation for oldtimers. The MRB currently includes an exemption for vehicles older than 40 years (oldtimers). A transitional scheme allows motor vehicles built before 1988 (i.e. not yet being oldtimers) to also benefit from this regulation. The regulation for oldtimers will not be abolished, however, as per 2028 its application will only be possible for oldtimers. Hence, a transitional scheme will no longer apply.

In view of the increased use of diesel substitutive fuel oil (subject a lower excise duty rate than diesel applies) as motor fuel, the government proposes to align the excise duty due on heavy fuel oil with the excise duty due on diesel. This amendment is proposed to enter into force as from 2024.