Additional tax in 2024: what are the changes?

The first month of 2024 is already over, which also means that the first pay slips of the year have already arrived. In most cases, a number of things will have changed on your pay slip, including, for example, the addition. If you drive a company car, in many cases you also pay additional tax on the car. This means that the additional tax is an important topic for everyone who drives a company car, both private and business. The rules for additions can change every year and it is important to stay informed of the rules to avoid surprises about your salary. In this blog we discuss the addition, the rules in 2024 and what has changed compared to previous years. 

What is addition?

Before we delve deeper into the rules that will apply in 2024, we will first briefly discuss the basics, namely what additional tax actually is. The additional tax is in fact a contribution that you pay for the private use of a company car. The idea behind this is that the employee benefits from the benefit of private use of the car, so that it is also a form of payment in kind. Additional tax is actually the tax you pay on the benefit you get because you can also use the car privately. 

It is important to note that the Tax Authorities automatically assume that a business car is also used privately, unless the employee has signed a 'declaration of no private use'. In that case, the car may be used privately for a maximum of 500 kilometers and it is important to have your mileage registration in order to avoid problems with the tax authorities.

The amount of the additional tax is determined by various factors:

• The catalog value of the car (new price including VAT, BPM and factory options)
• The CO2 emissions of the car
• The year of manufacture of the car
• The applicable addition percentage

This addition percentage can change annually and depends on the tax legislation that applies at that time. 

Validity of addition percentages

What was briefly mentioned above is that the addition percentages can change annually to reflect the goals of the government, for example with regard to the environment or the economy. The addition percentage is fixed for a period of 60 months on the date of the first registration. This means that in 2024 the additional tax rate from 2022 will still apply to a car that was registered for the first time in 2022. After 60 months, the additional tax percentage depends on the rules applicable at that time. 

Additional tax rules in 2024

Here is an overview of the rules that apply in 2024: 

1. The standard additional percentage applies to all cars with a CO2 emission of 1 gram and more and is set at 22%.
2. For electric vehicles, an additional tax rate of 16% applies in 2024 for the first €30,000 of the list value. The remaining amount above applies at the standard rate of 22%.
3. In 2024, an additional tax rate of 12% applies to the entire catalog value for hydrogen-powered cars. 
4. For cars with a first admission date from 2017 and later, a standard additional tax rate of 22% applies. For cars before 2017, but not older than 15 years, a standard rate of 25% applies. For cars older than 15 years, a standard rate of 35% is charged.  
5. For cars older than 15 years, the current market value is used to calculate the additional tax. This is also the amount you would get for the car if you wanted to sell it at this time. 

Calculation

Example 1.

An employee has been provided with a petrol car registered for the first time in 2022 by his/her employer, with which he/she will also drive more than 500 km privately. The catalog value of the petrol car is €60,000. You can calculate the gross addition in this case as follows:

€60.000 * 0,22 = €13.200

€13,200 / 12 = €1,100 per month

Example 2.

An employee has been provided with an electric car registered for the first time in 2024 by his/her employer, with which he/she will also drive more than 500 km privately. The list value of the electric car is €60,000. You can calculate the gross addition in this case as follows: 

€30.000 * 0,16 = €4.800

€30.000 * 0,22 = €6.600 

(€4,800 + €6,600)/12 = €950 per month

Conclusion

In this blog we have briefly explained the basics of addition, explained the rules in 2024 and provided some example calculations to explain how the addition is calculated. The additional tax is in fact a contribution that you pay for the private use of a company car. It depends on the catalog value of the vehicle, the CO2 emissions, the additional tax rate and the year of manufacture of the car. Due to the changing rules, it is wise to re-examine this every year so that you are not faced with any surprises. 

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