Company car arrangements under Dutch law
A company car (auto van de zaak or leaseauto) is one of the most common fringe benefits in Dutch employment. The legal framework combines employment law provisions on terms and conditions of employment with tax regulations governing the private use addition (bijtelling). The car policy is typically set out in a separate company car agreement or in the employer's car policy document (autoregeling).
When an employer provides a company car, the employee must pay income tax on the benefit of private use. The standard private use addition is 22% of the catalogue value of the car per year. For fully electric vehicles, a reduced rate applies to the first €30,000 of the catalogue value. If the employee drives fewer than 500 private kilometres per year and can demonstrate this, the addition can be set to zero - but the burden of proof lies with the employee, typically through a kilometre administration (rittenregistratie). Under Article 7:617 of the Dutch Civil Code, the use of a company car is a recognised form of remuneration in kind; however, the value attributed to it may not exceed its real value and the remuneration-in-kind rules must be respected. Payment of remuneration in a form that does not comply with Article 7:617 of the Dutch Civil Code does not discharge the employer's wage obligation, and the employee retains the right to claim the proper remuneration under Article 7:621 of the Dutch Civil Code.
Can the employer withdraw a company car under Dutch law?
A company car forms part of the employment conditions. The employer cannot simply withdraw it unilaterally. If the car is provided under a collective labour agreement or employment contract, any change requires mutual agreement or a valid ground under the unilateral change clause framework. Dutch courts have held that withdrawing a company car without adequate compensation can constitute a breach of the duty of good employer practices.
Upon termination of employment, the employee must return the company car. During the notice period, the employee generally retains the right to use the car. Any arrangements regarding the car should be addressed explicitly in the settlement agreement.