A lease agreement between an employer and employee for the use of a company car during holidays does not prevent the addition on your salary for this car. This is what a Dutch court recently ruled.

Lease agreement holiday
In this case, it concerned a worker who had been given a company car to use during his holidays. The tax administration had provided him with a “Declaration of non-private kilometres”. The employee then went on holiday in 2011, 2012 and 2013 with that same car. Before that he had signed a lease agreement with his employer. This agreement stated that the employee rented the company car for a fee from the employer during the holiday season. The tax authorities checked the logbook and claimed additional income. They believed that the 500 private kilometre limit was exceeded by the kilometres driven on holiday. But they did settle the lease payments with the additional income.

Holiday kilometres are private kilometres

The employee did not agree with this assessment and went to court. The judge stated that an addition for the company car can only be omitted if an employee uses a car for less than 500 kilometres for private purposes. The kilometres driven by an employee on holiday, according to the court, are to be regarded as private. The fact that the employer and employee had signed a lease agreement made no difference, according to the court judgement. So the tax authorities had rightly imposed the additional income, taking into account the personal contribution.