Taking an alternative position with the VAT adjustment

Company car

In 2017, the Dutch Supreme Court gave room to prove the extent of private use in other ways than by means of a comprehensive kilometre administration. The Supreme Court has ruled that if a taxpayer's records do not contain information from which it can be deduced to what extent the car has been used for private purposes (in short: a kilometre record) and application of the flat-rate would result in too much VAT being levied, the extent of private use must be reasonably determined, taking into account all the circumstances of the case. 

According to the Supreme Court, when you, as a taxable person, do not have a comprehensive or too limited mileage records of your employee, you can make the extent of the actual private use plausible on the basis of, amongst other things:

• the nature of the business; 

• the business purposes for which the provided car is used within that company; 

• the position and the activities within the company of the user of the car; 

• the manner in which the car may be or has been used for private purposes (such as commuting); 

• statistical data: If these are invoked, it must be made plausible that these data can be used in the case in question

What can you do?

For periods that are already irrevocably fixed (e.g. because the statutory period within which an objection can be filed against the relevant VAT return has expired), you have no formal options. It is not possible to lodge an appeal (with the tax court) against a negative decision by the tax authorities on a refund application submitted outside the statutory period. 

For still open periods and future periods, you could: 

• calculate your VAT position in that return on the basis of the positions described above immediately on submission of the return (but please note that as soon as the entrepreneur discovers that too little VAT has been paid, the tax authorities should be contacted (as soon as possible));

• make the adjustments described above, after which you must lodge an objection (in good time) to this VAT return

What can PwC do for you?

If, based on a different point of view, you arrive at a lower amount of VAT due than would be the case under a more standard application of the rules, we advise you to discuss with your PwC VAT adviser whether there is a possibility to recover the - in your view - overpaid VAT.

Your PwC VAT adviser will also be happy to assist you if you wish to work out or discuss an alternative calculation of your VAT adjustment for 2022 and previous years.