Q&A Pseudo final levy on company cars

The pseudo final levy applies to all cars made available to an employee after 1 January 2027. The relevant moment is the moment the car is made available. The transitional regime applies until 31 December 2030. It is important to note that the transitional regime only applies as long as the car remains in use with the same employer. If an employee changes employer and the car is transferred to another employer, the transitional regime ceases to apply. This may also be relevant within group or corporate structures.

The levy amounts to 12% of the list price (for cars older than 25 years: 12% of the fair market value). For example, a fossil fuel car with a list price of €50,000 results in an annual pseudo final levy of €6,000 (€500 per month). This levy is reported by the employer in the wage tax return as a final levy (i.e. not attributable to the employee). The employer may choose to include the levy on a monthly basis in the wage tax return. The levy for a calendar year must be paid no later than within two filing periods after the end of the calendar year. Therefore, it is not mandatory to pay the levy monthly; annual settlement is also permitted.

No, the pseudo final levy is entirely payable by the employer. It is legally prohibited to pass on this levy, either directly or indirectly, to the employee. This means that company cars that are (partly) powered by fossil fuels will become significantly more expensive for employers from 2027 onwards (unless the transitional regime applies).

As of 1 January 2027, the levy applies to passenger cars made available by the employer that are (partly) powered by fossil fuels. Fully electric vehicles and hydrogen-powered vehicles fall outside the scope of this measure. A transitional regime applies to cars already made available before 1 January 2027, provided that certain conditions are met.

No, the pseudo final levy does not apply if the fossil fuel car is made available exclusively for business use, meaning only business travel and no private use or commuting. This must be supported by a complete mileage administration and a strictly enforced ban on private use by the employer. Cars with a “no private use declaration” that are still used for commuting or for which less than 500 kilometres of private travel is recorded are therefore still subject to the pseudo final levy.

No, the pseudo final levy applies exclusively to passenger cars. Other types of vehicles, such as vans or trucks, fall outside the scope of this measure.

No, an exception applies to driving schools. Passenger cars used as driving school vehicles and powered by fossil fuels are excluded from the scope of the pseudo final levy.

No, the pseudo final levy does not apply to entrepreneurs subject to personal income tax, such as self-employed individuals. The measure only applies to employers required to withhold wage tax.

Yes, no exemptions have been made for these categories. The pseudo final levy applies to any employer required to pay wage tax, regardless of size or place of establishment.

Yes, the employee’s residency status is irrelevant. Next to that, it doesn’t matter whether the car is registered in the Netherlands or abroad. The pseudo final levy applies as soon as a passenger car that is (partly) powered by fossil fuels is made available by an employer required to withhold Dutch wage tax.

The pseudo final levy is not calculated on a pro-rata daily basis, but per month. Any month in which a (partly) fossil fuel car is made available for private use is considered a full levy month. This means that the number of days within a month is irrelevant. Even if the car is available for only a short period during the month, the full monthly levy applies.

If one car is made available to multiple employees within a single month, the pseudo final levy is nevertheless calculated only once per car per month. The number of employees using the car is not relevant. A change of employee within a month does not affect the calculation, provided that it concerns the same car made available by the same employer.

In principle, the pseudo final levy does not apply to temporary replacement vehicles. Where an employee is provided with a temporary replacement vehicle instead of their regular company car due to damage, repair, maintenance or tire replacement, the replacement vehicle is excluded from the pseudo final levy. This exception applies for a maximum period of 14 continuous calendar days. This prevents the employer from becoming liable for the pseudo final levy where the replacement vehicle is powered by fossil fuels.

No, if an employee works partly abroad while having a Dutch employer, the pseudo final levy remains due on the car made available. The levy is expected to be allocated on a pro-rata basis to Dutch working days.

The provision of a car is assessed per employer. For wage tax purposes, a group cannot be treated as a single employer. Employees are employed by one legal entity within the group. If an employee moves to another group entity, this results in a new making-available of the car.

Employers should be aware that when such a transfer occurs during a month, it may result in the pseudo final levy being applied twice for the same car, as there are formally two employers in that month.

In case of a transfer of a business, there may be a change of employer. In principle, a change of employer results in a new making-available of the car. However, mergers and acquisitions do not necessarily lead to a new making-available if the new employer effectively takes over the position of the former employer and the existing situation is continued.

It is therefore advisable to be aware of this. It must be assessed on a case-by-case basis whether there is indeed a new making-available or a continuation of the existing situation. If such a transfer occurs during a month, it may lead to the pseudo final levy being applied twice for the same car, as there are formally two employers involved in that month.

Yes, a transitional regime applies. For cars made available before 1 January 2027, no pseudo final levy is due until 31 December 2030.

Please note: if the car or employer changes during the transitional regime, this is considered a new making-available, and the transitional regime no longer applies.

Yes, until 31 December 2030, the employer may, once per calendar year, make a fossil fuel passenger car available for a maximum period of seven continuous days without triggering the pseudo final levy. This exemption applies to care that are made available after 1 January 2027 and therefore do not fall within the standard transitional regime.

The exemption will expire on 1 January 2031, in line with the end of the transitional period.

The relevant moment is when the car is actually delivered to the employee. If the car is delivered after 1 January 2027, the pseudo final levy will apply.

If one car is made available to multiple employees within the same employer during the transitional period, the transitional regime will generally continue to apply. The regime only ends once the car is no longer used by any employee of that employer.

Within a group or corporate structure, it may be unclear whether the same employer is involved or whether a formal change of employer has taken place. In principle, a change of employer may result in the transitional regime no longer applying. However, this will not necessarily be the case if the new employer effectively takes over the position of the former employer and the existing situation continues.

It is therefore important to assess on a case-by-case basis whether there is a genuine change of employer or a continuation of the existing situation following a merger or acquisition.