From 1 January 2027, as an employer, you will have to deal with the pseudo-final levy. An additional tax, in other words.
It’s understandable that you have questions about this.
Below you will find the 10 most frequently asked questions, with clear answers.
1. What is the pseudo-final levy?
The pseudo-final levy is an additional tax for employers. You pay this if, from 1 January 2027, you provide a fossil lease car to an employee. This concerns petrol, diesel, and hybrid cars that are also used privately.
The levy is 12 percent of the catalogue value per year. This amount includes VAT and BPM (vehicle tax).
Good to know:
The pseudo-final levy is separate from the employee’s additional taxable income (bijtelling).
You are not allowed to pass these costs on to the employee.
2. Who pays the pseudo-final levy?
The levy applies to:
- Employers who provide a fossil lease car for private use, including commuting.
- Directors-major shareholders (DGA’s) who drive a lease car via their private limited company (BV).
The levy does not apply to: - Self-employed persons (ZZP’ers) and sole proprietorships, as they do not pay wage tax.
3. What does the Tax Authority consider private use?
The Tax Authority takes a broad view here. Private use includes:
- Private trips alongside business kilometres.
- Commuting, even if you remain under 500 private kilometres per year.
- Do you only use the car for business and do not drive private or commuting kilometres? Then the levy does not apply.
4. For which vehicles does the levy apply?
The pseudo-final levy applies only to:
Passenger cars that are not fully emission-free, such as petrol, diesel, and hybrid.
The levy does not apply to:
- Fully electric or hydrogen cars.
- Cars used solely for business purposes.
- Vans, trucks, and similar vehicles.
5. Is there a transitional arrangement?
Yes.
Lease cars assigned to an employee before 1 January 2027 are exempt until 1 January 2031.
Note:
- After that date, the levy will still apply, except for fully electric cars.
- If the car changes employer during this period, the transitional arrangement lapses and the levy may apply immediately.
6. How is the levy calculated and when do you declare it?
The levy is:
- 12 percent per year, or 1 percent per month of the catalogue value.
- You calculate the levy per month.
- One day of private use in a month is enough to charge the levy for the entire month.
- You usually declare the pseudo-final levy in the second tax return period of the following year.
7. Are you allowed to pass the levy on to the employee?
No. The pseudo-final levy is entirely for the employer. You are not allowed to:
- Charge it to the employee.
- Include it in a higher employee contribution.
8. What if a lease car is only available for a short time?
If you temporarily provide a non-electric car, there is an exemption for a maximum of 7 consecutive days per calendar year.
9. How can you limit the pseudo-final levy?
You can reduce the impact by:
- Switching to fully electric lease cars.
- Making use of the transitional arrangement for contracts from before 2027.
- Adjusting your mobility policy, such as:
- Working with mobility budgets.
- Electric shared cars for business trips without private use.
Note: if you effectively use a mobility budget for a company car, this may still be considered a lease car. In that case, the levy may still apply. This point is still being discussed with the Tax Authority.
10. Why does the pseudo-final levy exist?
The government wants to encourage employers to choose emission-free mobility. Fossil lease cars become more expensive, while electric cars become more attractive. This is intended to reduce CO₂ emissions.