Ongoing rotating use of company delivery van for private purposes

The addition in the payroll tax sphere for the private use of an employer-provided motor vehicle applies to delivery vans as well as to passenger vehicles, the underlying premise as per the Netherlands Wages and Salaries Tax Act being that any employee whose employer has provided him or her with a car is authorised to use said car for business and private purposes alike. It is the employee who is charged for the payroll tax on the addition unless the employee’s private use of the car for the year as a whole turns out at less than 500 kilometres as evidenced by a properly reconciled mileage log, in which case the addition is waived.

A special regime applies to delivery vans which involves a final levy, to the tune of 300 euros annually per delivery van, being imposed on the employer in connection with the ongoing private use of the vehicle, on a rotating basis, by multiple members of its workforce (which scenario would otherwise involve having to keep a detailed record of which of the authorised users had the private use of the van and when). Eligibility for the special regime is conditional upon the ongoing private use of the vehicle on a rotation basis by two or more members of the workforce being linked to the nature of the work.

The Hague Court of Appeal found itself adjudicating a case which revolved around whether a contracting firm had justifiably applied the final levy in connection with the ongoing private use of its delivery vans, on a rotating basis, by various members of its workforce and, more in particular, around whether the use in question had been subject to such recurrent change as to make it unfeasible to keep track of which of the employees a particular van had been made available to and when. It was left to the employees between them to decide – usually in favour of the colleague who happened to live the furthest away from the place of assignment – which of them would be allowed to take a particular delivery van home with him at the end of the work day. Depending on the scope of the work to be performed, the private use of a particular delivery van could thus continue to rest with the same person for one or two weeks at a time or rotate between employees from one day to the next.

The Inspector of Taxes had taken the view that the final levy regime should not have been resorted to as there had been a question of consecutive private use throughout a particular period of time by a variety of employees for the logging of which the employer had been responsible. The Court of Appeal in its ruling stated that it had not been possible to designate a single employee as the person to whom the private use of the vehicle had been granted on the basis of whose mileage log the employer would have been in a position to prove that the annual quota of 500 private kilometres had not been exceeded. As it had not been possible to establish with whom a particular van had been in use including privately during which portion of a particular tax assessment period, it followed that the payroll tax for the private use of the van in question could not have been charged on to the employees, never mind that the “regular” drivers of the firm’s vans were not the only members of the workforce by whom use was made of the contractor’s fleet of vans.

When the Inspector in support of the alleged inapplicability of the final levy regime went on to contend that the private use of the vans might exceed the annual 500 kilometre quota as no mileage logs were being kept of said private use by the various employees of the contractor’s delivery vans, the Court set him straight by pointing out that the legislator had not identified this as a prerequisite for the application of the final levy regime.

Dutch version: Doorlopend afwisselend privégebruik bestelauto