The Private Motor Vehicle and Motorcycle Tax, or BPM, is a purchase and import tax that is calculated based on the vehicle's CO2 emissions. There is currently a general exemption from BPM for delivery vans, regardless of emissions or fuel, if the taxpayer qualifies as an entrepreneur for VAT purposes. On Budget Day 2022, the Cabinet announced their intention to abolish this exemption on 1 January 2025. Also, as of this date, the BPM for the delivery vans will no longer be calculated on the list price, but on the CO2 emissions as has been the case for passenger cars. As a result, emission-free delivery vans will effectively continue to be tax-free.
If a company car is elected to be used privately as well, an addition (or 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 BEV’s 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 BEV’s 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 legislative proposal for the 2023 Tax Plan proposed an amendment to the Motor Vehicle Tax (MRB) rate for delivery vans in the years 2025 and 2026. This included a proposed 15% increase by 2025 and an additional increase of 6,96% in 2026. This increase would serve to cover the lower proceeds from abolishing the exemption in the BPM in respect of delivery vans registered in the name of VAT entrepreneurs. To ease the burden on entrepreneurs who own a delivery van, these rate increases have now been removed in an amendment to the Tax Plan. The budgetary compensation will perhaps be found in a correction on the flat rates that exist within the BPM for the import of used vehicles.
Currently, the maximum tax-free travel allowance is €19 cents per kilometer. The Tax Plan 2023 proposes to increase this travel allowance to €21 cents per kilometer. In addition, in 2024 it is proposed to increase this amount again to €22 cents per kilometer.
Proposals related to energy and environment
The government has also announced its intention to accelerate the sustainability of the company car fleet in order to achieve additional CO2 reduction in 2030. Currently being explored is the introduction of a regulation that requires all new company cars to be emission-free by 2025 or even 2024.
The Ministry has published two letters to the House of Representatives about the progress, organization and development of the hydrogen market and the developments in the transport network in the Netherlands. To bring back fossil fuel dependencies, there is more urgency in developing hydrogen policy. Partly for this reason the Cabinet announced in their Budget Memorandum on Budget Day 2022 that it would reserve € 35 billion for a Climate Fund, of which € 4 billion shall be allocated to urgent projects including hydrogen projects. The Dutch government is investing in the future of hydrogen in the Automotive sector. We refer to our updated website post of 29 September 2022 on the tax aspects of Fuel Cell Electric Vehicles in the Netherlands.
From 15 March 2021 to 31 December 2025, the Government opened the Subsidy Program for Zero Emission Commercial Vehicles (SEBA). Businesses can apply for the subsidy for the purchase or sometimes financial lease of zero-emission vehicles. To be eligible for SEBA, certain specific requirements must be met. For example, the car cannot have been delivered earlier and the weight cannot exceed 4,250 kilograms. The subsidy is maximized on € 5,000 per application. Meanwhile practically all the yearly budget of € 22 million for 2022 has been used up. In 2023 new budget will be available.
As of 1 April 2022, excise duties (accijns) on unleaded petrol, diesel and LPG were temporarily reduced until December 31, 2022. This reduction, of € 17.3 cents on petrol, € 11.1 cents on diesel and € 4.1 cents on LPG per liter, will be extended to at least until 1 July 2023.
For the period 1 July to 31 December 2023, the government proposes to continue to partially dampen the high fuel prices. In the second half of 2023, the reduction in force since 1 April 2022 will remain in place for half.
In the Netherlands and Europe, the network of hydrogen fuel stations has much room left to grow. For instance, the Netherlands currently has only 16 operational hydrogen fuel stations. New hydrogen fueling stations should be appearing in the near future. Interestingly, hydrogen as a motor fuel is not subject to excise duties at the pumps, currently. It is also not expected that this will be introduced in the short term.
We will keep you informed on further developments. Should you have any questions with respect to the Budget Day proposals, or any other tax developments in the Automotive sector, please contact your trusted adviser or a member of our Automotive Team.