Company car and private use: how does it work?
You use a company car for work, but often outside working hours too. Think of shopping, visiting family or going on holiday. This can have tax consequences, especially if you drive more than 500 kilometres privately per year. Commuting, mileage records and taxable benefit also play a role. In this article, we explain how private use of a company car works in the Netherlands and what employees, employers and business owners need to consider.
Can you use a company car for private driving?
Yes, a company car can also be used privately, as long as the agreements with your employer or within your business allow it. For tax purposes, it becomes particularly relevant when you use the car for more than 500 private kilometres per calendar year. In that case, the Dutch Tax Administration generally treats the private use as a taxable benefit, known in Dutch as bijtelling.
Whether private use is actually permitted also depends on the agreements made about the car. An employer may, for example, place restrictions on who is allowed to drive the car or what it may be used for.
In short: private use of a company car is possible, but once you drive more than 500 private kilometres per calendar year, taxable benefit generally applies.
What counts as private mileage?
Not every journey outside working hours automatically counts as private. For taxable benefit purposes, the Dutch Tax Administration looks at the purpose of the journey.
Examples of private mileage include:
- Shopping: a trip to the supermarket is private.
- Visiting family or friends: these kilometres count as private use.
- Holidays: kilometres driven during a private holiday count as private mileage.
- Days out: recreational journeys also count as private use.
- Other personal journeys: trips that are not made for work are private.
A journey to a business appointment, client or project location is considered business travel.
Does commuting count as private use?
This is a common source of confusion. For taxable benefit and income tax purposes, commuting is treated as business travel. The kilometres between your home and regular workplace therefore do not count towards the 500-kilometre private-use limit.
Different rules apply for VAT. For VAT purposes, commuting is treated as private use. This distinction is particularly relevant for business owners and employers dealing with a VAT adjustment for private use. The same commute can therefore be considered business travel for one tax and private use for another.
When does taxable benefit apply?
Are you an employee with a company car that you also use privately? If you drive more than 500 private kilometres per calendar year, your employer generally has to add an amount to your taxable salary. In the Netherlands, this is known as bijtelling, or taxable benefit for private use of a company car. You do not pay this entire amount directly to your employer. Instead, it is added to your taxable income, which means you pay tax on it.
The amount of taxable benefit depends on factors including the car’s catalogue value, CO₂ emissions and the date on which the car was first registered.
What are the taxable benefit rates in 2026?
For cars first registered in 2026, two general taxable benefit rates apply: 18% and 22%. For a car with CO₂ emissions above 0 grams per kilometre, the 2026 rate is 22% of the catalogue value.
For a fully electric car first registered in 2026, the rate is 18% on the part of the catalogue value up to and including €30,000. The amount above €30,000 is subject to a 22% rate. Different rules apply to certain hydrogen and solar-powered cars.
| Car first registered in 2026 | Taxable benefit rate |
|---|---|
| Car with CO₂ emissions | 22% |
| Fully electric | 18% up to €30,000, 22% above that |
| Certain hydrogen and solar-powered cars | 18% over the full taxable value |
Please note: different rules may apply to a car that was first registered in an earlier year. Always check the rules that apply to the specific vehicle.
A simple taxable benefit example
Suppose you drive a company car with a catalogue value of €40,000. A taxable benefit rate of 22% applies to this car. The annual taxable benefit is:
22% of €40,000 = €8,800
This €8,800 is not the amount you actually pay each year. It is added to the income on which your tax is calculated. The actual net cost therefore depends on your personal tax situation. This distinction is important: a taxable benefit of €8,800 does not mean €8,800 leaves your bank account.
What if you drive no more than 500 kilometres privately?
If you drive no more than 500 private kilometres per calendar year and can prove this, taxable benefit does not have to apply. Employees can apply to the Dutch Tax Administration for a Statement of No Private Use of a Company Car (Verklaring geen privégebruik auto). You must then be able to demonstrate that you stayed within the permitted private mileage, for example with a complete mileage record. The 500-kilometre limit is therefore not simply an estimate.
Please note: 500 private kilometres is less than it may sound. Averaged over a full calendar year, it is less than 10 kilometres per week.
What if you only have the car for part of the year?
This is particularly important with temporary mobility. The 500-kilometre limit applies on a calendar-year basis. If you only have the car for part of the year, this does not automatically mean you can drive 500 private kilometres during those months.
The Dutch Tax Administration converts the private use to a full calendar year. For example, if you only have a company car in January, February and March, 3/12 of 500 kilometres is 125 private kilometres for that period to remain within the annual limit when converted to a full year. This is particularly relevant when using a temporary lease or shortlease car.
How do you prove that you drive no more than 500 private kilometres?
If you want to avoid taxable benefit because the car is used for no more than 500 private kilometres, you need to be able to prove this. A complete mileage record is a common way to do so. It records your journeys and kilometres driven, making it clear which journeys were for business and which were private.
Simply stating that you hardly use the car privately is not enough. The burden of proof lies with the person using the arrangement. If you ultimately drive more private kilometres than permitted, you must withdraw your Statement of No Private Use as an employee. An additional tax assessment may then follow for the period in which taxable benefit was incorrectly excluded.
Can you take a company car on holiday?
For tax purposes, you can, provided private use is permitted under the agreements that apply to the car. Kilometres driven during a private holiday do count as private mileage. If taxable benefit already applies to you, a longer holiday journey does not in itself change the taxable benefit rate.
If you are relying on the rule that allows no more than 500 private kilometres per calendar year, a holiday can quickly push you over the limit. A return journey from the Netherlands to the south of France, for example, is already more than enough. If you take a company car abroad, also check the applicable arrangements for insurance, use abroad and any documents you need to carry.
What about business owners?
The tax treatment is different for business owners than for employees, but the 500-kilometre limit is important here too. If the car is a business asset and you also use it privately, an amount generally has to be added to the business profit for that private use. If you can prove that you drive no more than 500 private kilometres per year, this addition does not apply.
VAT is a separate consideration for business owners. If you also use a business car privately, a VAT adjustment for private use may be required. As mentioned earlier, commuting counts as private use for VAT purposes. It is therefore important not to confuse the income tax and VAT rules.
Does taxable benefit also apply to a shortlease car?
Yes. The fact that a car is provided through shortlease does not in itself change the tax rules for private use. If your employer provides you with a shortlease car and you use it for more than 500 private kilometres on a calendar-year basis, taxable benefit can apply in the same way.
Shortlease is therefore primarily a choice about the car and the flexibility of the contract, not a way to avoid the tax rules for private use of a company car.
For employers, shortlease for businesses can be useful when an employee temporarily needs a car and the longer-term mobility requirement is not yet clear.
Allowing private use: make clear agreements in advance
Employers should look beyond the tax rules and clearly set out what employees can and cannot do with a company car. This may include agreements about private use, driving abroad, other drivers, damage and the use of a fuel or charging card.
The same applies to employees: check the agreements before using the car privately. This helps prevent disputes later about costs or use that falls outside the agreed conditions.
Company car and private use at a glance
| Situation | What does it mean? |
|---|---|
| Business journey | Does not count as private mileage |
| Commuting | Business travel for taxable benefit and income tax purposes |
| Shopping or visiting family | Private mileage |
| Private holiday | Private mileage |
| Maximum 500 km private use per calendar year | No taxable benefit if you can prove this |
| More than 500 km private use per calendar year | Taxable benefit generally applies |
| Car available for only part of the year | Private mileage is converted to a full calendar year |
| Commuting for VAT purposes | Counts as private use |
The key question is therefore not simply whether you can use a company car privately. You also need to know which agreements apply and what the tax consequences of that private use are.
Need a temporary business lease car?
Not every employee needs the same car for several years. Perhaps someone has just joined the company, a temporary project is underway or it is not yet clear how many kilometres an employee will ultimately drive. With Enterprise Shortlease, you can provide a business car for a shorter period without immediately committing to a long-term lease. The tax rules for private use and taxable benefit continue to apply.
View the current range of shortlease cars or contact Enterprise to discuss which car fits your situation.
Frequently asked questions about private use of a company car
Yes, if private use is permitted under the agreements with your employer, you can use your company car privately. If you drive more than 500 private kilometres per calendar year, taxable benefit generally applies.
No, for taxable benefit and income tax purposes, commuting is treated as business travel. For VAT purposes, however, commuting is treated as private use. It is therefore important to distinguish between these tax rules.
You can drive no more than 500 private kilometres per calendar year without taxable benefit, provided you can prove that you do not exceed this limit. If you only have the car for part of the year, the private mileage is converted to a full calendar year.
If you want to prove that you drove no more than 500 private kilometres per calendar year, you need convincing evidence. A complete mileage record is a common way to demonstrate this.
Yes, a shortlease car can also be a company car to which the rules on private use and taxable benefit apply. The contract duration or type of lease does not remove these tax rules.
Yes, if private use and use abroad are permitted under the agreements for the car. Kilometres driven during a private holiday count as private mileage. Before travelling, also check the conditions for using the car abroad.
No, the taxable benefit is not a bill that you pay in full. The amount is added to your taxable income. The actual net effect therefore depends on your personal tax situation.