Rental car tax addition

In practice, we sometimes see people looking for tricks to avoid a tax addition. This is not wise, as court rulings on this can be strict. Moreover, if you do follow the current rules, this can be quite beneficial to you as a business rental customer.

Whether there is an additional charge when renting a vehicle and what that amount is depends on several factors. In principle, the same rules are applied as in leasing. The type of vehicle, age, consumption and what condition it is in are assessed. The rental period and the manner in which the vehicle is used will help determine whether such an addition will be made.

Because the government encourages sustainable behavior, a model's CO2 emissions determine the tax addition rate. The following percentages apply:

• 16% applies if your vehicle emits 0 grams, i.e. no CO2. If you and your vehicle fall into the 16% category, a determination will be made every five years as to whether this is still the case and an adjustment may follow based on the latest regulations or value.
• All vehicles that do emit CO2 - with some exceptions - are subject to the normal rate of 22%. Note that in 2017, this rate was reduced from 25 to 22. So was your car registered before 2017? Then the 25% still applies.

Those who want to be subject to a low addition rate will undoubtedly find a nice model in our fleet. The proportion of electric vehicles within Avis' fleet has increased dramatically in recent years. We offer our customers a choice of models. Such as an Opel Corsa E, Kia Niro EV and the KIA EV6. We will continue to expand the electric segment in the coming years.

A tax addition is calculated based on the list value, also known as the value for tax purposes. This is the value of the vehicle when it was first delivered, the new price. This can almost always be found in the lease agreement. For example, if the value is €30,000, at a 22% tax addition rate that comes to €6,600 per year. The tax authorities designate this as additional gross income. The list value is adjusted to the current value by most rental companies. Whether a tax addition is actually applied and how high it will be depends on a number of factors.

The main factor that determines whether there will be additional charges is the number of kilometers driven. If you drive more than 500 kilometers privately on an annual basis with a business rental car, you must pay a tax addition. Private kilometers driven are those that are for trips that are not commuting or work-related. This obviously includes the drive from home to work, but also, for example, customer visits, deliveries and on-call shifts.

If you do not hit the 500 kilometer mark, you must be able to prove it to the tax authorities with a 'statement of no private car use' and a trip log. You must always log your kilometers driven, unless you buy out the distance registration. In that case, you pay a fixed amount. The latter usually happens in cases in which several employees use the same rental car.

At Avis, we help you keep track of your trips. On your Avis Business account you can easily find the information about: the number of rental days, kilometers driven, the tax value of the cars used and the CO2 emissions. Upon request, we can also provide the total overview of all reservations made and the license plates of cars currently rented out and deployed.

Despite the similarity in the rules, there is a significant difference between renting and leasing. Leasing is often over a longer period of time and vehicles are therefore more often used for private trips. Therefore, the likelihood of a tax addition when leasing is very high. That chance is much smaller when renting, at least if you make the right choices. Especially when renting vehicles for short periods, we see at Avis that renters often stay below the 500 kilometers of private trips. The fact that there is always one of our branches nearby and our pick-up and drop-off service make unnecessary kilometers unnecessary.

If you do rent for a longer period of time and hit the 500 kilometer mark in private trips, you can reduce the tax addition by choosing a sustainable vehicle. Finally, remember that in many cases, a tax addition is a pittance compared to all the costs involved in owning your own car.